Academic Philosophy

John Rawls: For School Choice, Against the Minimum Wage

[Editor’s Note: The following is a guest contribution by Felix Bungay, a student at the University of Cambridge  reading an MPhil in Intellectual History and Political Thought.]

When looking at contemporary liberal political thought, philosophers like Samuel Freeman and John Tomasi like to play up the difference between classical liberals, like Hayek and Friedman, and high liberals, like Rawls and Nagel.

I happen to think there’s more common ground between the two groups than is commonly perceived. Let’s say, to engage in a thought experiment, we locked Rawls, Freeman, Friedman and Hayek in a room and we asked them to come up with some public policy positions. We’ll give them food and water, but they can’t leave the room until they all unanimously agree on a position. What policies (if any) would arise – or would they all just be stuck in the room arguing for eternity?

If I said they would agree to scrap the minimum wage, have a wholly private school system funded by vouchers and scrap most welfare and replace it with a simple negative income tax, would you believe me?

When discussing fair equality of opportunity in A Theory of Justice, Rawls says that the “Government tries to insure equal chances of education and culture for persons similarly endowed and motivated either by subsidising private schools or by establishing a public school system.” Significantly, Rawls himself does not think that the government needs to provide education or necessarily establish a public school system to fulfil the requirements of equal opportunity; a fully private school system is not ruled out. As Samuel Freeman says, Rawls’s “writings imply that a publically funded and regulated but still entirely private education system (for example, a voucher system) would be compatible with FEO.” Milton Friedman would be jumping for joy.

What about the minimum wage then? Well in an interview with PBS, Samuel Freeman said Rawls was opposed to the minimum wage (meanwhile the Economist tells us that Obama’s plan to raise the minimum wage makes him a Rawlsian – that’s poor scholarship): “He [Rawls] thought we ought to get rid of a minimum wage and let the labor market just go as low as it would and let employers just pay two, three dollars an hour if they could and let the government come in and supplement that.”

And what form did Rawls believe this supplement ought to take? Well, he again drew on Milton Friedman and argued for a negative income tax. When discussing the institutions associated with the second principle (chapter 5 of ToJ), Rawls says that “the government guarantees a social minimum either by family allowances and special payments for sickness and unemployment, or more systematically by such devices as a graded income supplement (a so-called negative income tax).”

So while Rawls, Freeman, Friedman and Hayek may not be best buds, there is perhaps more ground for positions associated with the “free market right” to be found in the work of Rawls than either classical or high liberals commonly discuss. Rawls the deregulatory school choice enthusiast is quite a different tale from the one you normally hear.

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Author: Felix Bungay
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  • M Lister

    This is right and important about minimum wage, both, I think, as a reading of Rawls and also as an idea in general. The problem, of course, is that most people who present themselves as supports of the Hayek/Friedman line (not necessarily in academia, but in politics and public life more generally) are in favor of getting rid of the minimum wage without wage supplements from government or other methods that would keep the least advantaged from falling lower. That, of course, isn’t a plausible view and isn’t at all something Rawls would agree with. So, I think that most often the move to convergence here would have to come from the “classical liberal” side.

    It’s also important, I think, to see that Rawlsian opposition to minimum wage rules is essentially empirical- the idea is that having no minimum wage but having government wage subsidies of some sort would be a better way to fulfill the difference principle. But, if that were wrong, then there would be good reason to support the minimum wage. It’s not that a minimum wage is _in itself_ objectionable or unjust on Rawls’s account- if it turned out to be the best way to fulfill the difference principle, it would be required. At least in many cases I think a rather different view is held by those who claim to take inspiration from Hayek and Friedman, though they may be not following their heroes well here. (We would also see some of the differences between the classical liberal and the more traditional libertarian view in this area.)

    • Jason Bedrick

      I can’t see how you can make the case that “most people who present themselves as supports of the Hayek/Friedman line (not necessarily in academia, but in politics and public life more generally) are in favor of getting rid of the minimum wage without wage supplements from government or other methods that would keep the least advantaged from falling lower.”

      Friedman strongly advocated for a negative income tax. Hayek also supported a limited welfare system. Are there any Republicans in Congress who openly support entirely eliminating social safety net? Even the Ryan plan would merely reform it, not eliminate it. For that matter, I don’t even think Rand Paul has argued for its complete elimination. This is shadowboxing.

      • will

        Hmmm. Thats specious. Given the means Ryan et al would choose elimination.

    • FB

      So I don’t think Rawls is ‘compatible’ with the hard libertarianism often (wrongly) tied in with Friedman and Hayek, who would both be quite comfortable with some sort of welfare state featuring a negative income tax and no minimum wage (Friedman explicitly argues for this in Capitalism and Freedom.) So I think the convergence comes from both directions.

      Your right to stress its an empirical question – but most people laying claim to Rawls (in public discourse) would tend to be champions of the minimum wage, rather than arguing for a negative income tax/universal basic income wage supplement and that the minimum wage was bad. So its interesting that Rawls takes the position that the minimum wage may well be harmful, rather than contesting this claim.

      • Damien S.

        Well, lots of “Rawlsians” are friendly to basic income ideas *too*.

      • will

        Agreed. I have an MA in Philosophy and I find this interpretation of Rawls to be imprecise. This article presupposes some sort of mutually exclusivity that simply does not exist- it further makes a claim based on someone elses opinion that Rawls did not agree with Minimum Wages. Im not buying the argument.

    • Les Kyle Nearhood

      ” are in favor of getting rid of the minimum wage without wage supplements from government or other methods that would keep the least advantaged from falling lower. That, of course, isn’t a plausible view”
      Actually the two are unrelated. No minimum wage law will ever help people who are actually poor since minimum wage rates are (1) almost exclusively earned by the young and inexperienced, (2) merely contribute to inflation when they are abitrarily raised with little or no net gain for the workers, and (3) actually harm some of the poor by creating a barrier for entry.
      So it makes sense to oppose them whether there exists some other government program or not.

      • Damien S.

        “almost exclusively earned by the young and inexperienced”

        I doubt that’s true.

        And there’s empirical studies that seem to show raising the minimum wage within real-world ranges raises employment levels at the bottom too, contrary to simple microeconomics. Possibly because it’s actually a macroeconomic matter; research is ongoing.

        Costs aren’t pure labor costs, so even if wage increases lead to some inflation, workers can still benefit overall.

        • Les Kyle Nearhood

          All of that is contrary to the information I have seen. It is prescisly the incremental increases in Min wage which are passed on in the form of higher prices almost totally. Why? well because every employer is faced with exactly the same cost increase. And yes, ovewhelmingly minimum wage is earned by those who have recent entry into the job market.

          • Damien S.

            Lots of poor people earn minimum wage. And lots of other wages are linked to minimum wage, so people can see increases even if they weren’t at minimum themselves.

            If the cost of something is 50% labor and 50% other, a 100% rise in labor costs would only lead to a 50% rise in price. Dollar wage rise, 50 cents price rise. Meanwhile the worker is getting a dollar rise, and thus 50 cents rise in real income.

          • Les Kyle Nearhood

            In reality it simply does not work out that way. Minimum wage increases have never kept up with inftation. And this is from the Bureau of Labor Statistics. :
            Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly-paid workers, they made up about half of those paid the Federal minimum wage or less. Among employed teenagers paid by the hour, about 23 percent earned the minimum wage or less, compared with about 3 percent of workers age 25 and over.

          • Damien S.

            Your first point is irrelevant. Most inflation is from causes other than raising the minimum wage; we were debating, I thought, whether increasing the minimum wage itself did any good. I said yes: there may be inflation but in real ranges it doesn’t wipe out all of the gains. If the legislature doesn’t raise minimum wage to keep up with the central bank’s expansion of the money supply, that’s an entirely different issue.

            As for your second, you’re saying that half those paid the minimum wage are over the age of 25, contradicting what you originally said. As for “or less”, don’t teenagers have special exemption to be paid less?

  • Fallon

    ‘Publically funded and regulated, entirely private education system.’
    When the government funds and regulates it is not a market system to the degree that it does. Sure, the benefits will be privatized. But this Friedman voucher model is corporatist: deranging, of incentives in the public choice meaning of the phrase and, of economic calculation in the Misesian sense of the word. Of course it is easy to find overlaps with Rawls in Hayek and Friedman. These guys were not strong market advocates. And Friedman’s monetarism was very forgiving of massive state management– which describes key points of Friedman’s career too.

  • Ashmedai

    Focusing on rather secondary issues like the minimum wage and school choice detracts attention from the gap between Friedman, Hayek etc on the one side and Rawls on the other. Rawls pointed to liberal socialism as one of the two socio-economic systems that fulfill his criteria of justice in a well-ordered society (the other one being a property-owning democracy, where capital is widely distributed among individuals). I cannot imagine any kind of *socialism* being acceptable from either Hayek or Friedman.

    • Damien S.

      Are we defining market-centered social democracy as “liberal socialism” now?

      H&F may have hated “socialism” but if they support negative income tax and/or social insurance, the practical difference isn’t that huge, and there’s a big philosophical gap between them and libertarian purists/anarchists.

      • matt b

        I think the philosophical gap between H and F and Nozick and Rand’s hard libertarianism is certainly greater than the gap between their moderate views and Rawls and other left-liberals, that’s for sure. But it’s when it comes to policy preferences that you see the hard libertarians and the H and F types more in agreement. For example, if you put me and Nozick in a room we would probably agree on about 80 percent of public policy issues whereas if you put me in room with Joshua Cohen (one of Rawls big fans at Stanford) it would probably be more like 50-60. But since the policy disputes tend to resolve around differing empirical assessments, I’m fully confident H and F and BHL libertarians can persuade the Rawlsians we’re right and they’re wrong in time 🙂

        • Damien S.

          Well, there’s also that the followers of H&F are often more extreme than H&F themselves. Several commenters here in the past waved away Hayek’s support for social insurance as an inconsistent mistake. I think Rothbard’s support for land reform sometimes, somewhere (like Latin America), was also dismissed.

          (Reminding me of some quote where in Marx doubts whether he is a Marxist. And I don’t think the Jesus of the Gospels would recognize a bunch of Christians as sincerely related to his ideas.)

      • Ashmedai

        I have no dissagreement regarding the distance between, say, Hayek and “purists”. But, for Rawls, both liberal socialism and a property-owning democracy are qualitatively different from a “market-oriented social democracy” or welfare-state capitalism, as he names it, that only guarantees a social minimum for all individuals. Check your copy of “Justice and Fairness: A Restatement”; it’s all there.

        • Ashmedai

          “Justice *AS* Fairness”, obv.

        • Damien S.

          Ah, I never read that, and for that matter got bored before finishing _A Theory of Justice_[1], but I’d always thought the point of ToJ was to justify market-oriented social democracy (albeit one probably with high or revenue-maximizing top tax rates (and these days economists are talking about above 70% being the point where you actually fall down the wrong side of the Laffer curve)). Perils of partial reading, I guess.

          Oh I see, revised edition with new ideas. I note WP lacks a page for property-owning democracy. I’d also want to know how he distinguishes between welfare-state capitalism and liberal/democratic socialism.

          [1] As I noted around here a few years ago, I think modern liberals tend to be a lot less concerned with Justifying their ideas or with theoretical purity than libertarians or Marxists tend to be.

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  • ThaomasH

    The main reason liberals politicians are dubious about vouchers is that all the real voucher plans fund only a part of the costs of education, leading to the possibility of a regressive subsidy in the way that the mortgage interest deduction is. And the reason that conservative politicians resist a negative income tax instead of welfare is that it would be more costly than handing out a few food stamps and providing subsidized health insurance. The respective wonks on both sides have a lot in common. I cannot see a lot of liberal opposition if Republicans who opposed the minimum wage offered an earned income tax credit that had the effect of raising the minimum (after tax) wage.

  • JayAckroyd

    A Rawlsian approach to public education (and, IMO, a good idea) is all education is public up through high school, and students are assigned to schools by lot.

    • Fallon

      Why stop with students? That would be unfair. Let the teachers be by lot too. But what about administrators, janitors, school boards, architects, food providers, district residents? Lot them all. To be really Rawlsian in your sense– make the tax rates randomized too.
      Everything should be submitted to the great public lottery, roulette wheel of fairness. Excepting, of course, The Keepers of The Public Reason– the special ones manufacturing the odds. Somebody has got to manage the public will.

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  • will

    I think there is some poor scholarship here- your words applied to The Economist also fit this. By no means can you fully support the conclusion in your title. It is simply not that black and white and Rawls engaged in far more complex thinking.

  • Hammi

    please may you list your references

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