The centenary of the birth of philosopher John Rawls has prompted the usual claims that his best known philosophical tool, the veil of ignorance, is an argument in favour of redistributive taxation aiming at a much more equal income society.
In his thought experiment, Rawls imagined people meeting to design the society they would then live in, but without knowing anything about themselves that might help determine their position in that society (intelligence, skills, gender, age, etc.). Rawls and his disciples argue that, if we do not know where we are going to end up on the income spectrum, we will want to create a much more equal society so that our position does not matter.
My friend Hannes Gissurarson rightly points out that, if the sages made this decision, they would make themselves (and everyone else) worse off, since even poor people in free-market capitalist countries tend to have higher incomes than even rich people in socialist ones. But my objection to Rawls is more fundamental – if Rawls’ thought experiment were possible to conduct in the real world, rather than just imagined by people like himself, would it really reach the results that he claims?
What I wanted was a practical experiment to see what decisions people would make about how they would like income to be distributed in society. This would have to be real consequences (all good economists know that what matters is revealed preferences – not answers to a questionnaire but our real practical decisions when they actually affect us), and it would have to be behind a genuine veil of ignorance, so that the people making the decisions could not have any idea where they would end up on the income spectrum in the resultant society.
Sadly the ASI would not give me the budget to create such a realistic large-scale experiment, but fortunately one is already being done for us, twice a week, involving over 40 million people, and the results are not at all what Rawls would have thought. I think of it as a practical application of the Rawlsian ‘original position’ thought experiment behind the veil of ignorance, but it is more commonly referred to as the Lottery.
It meets Rawls’ tests. The decision to play is made behind a very effective veil of ignorance – the lottery is completely random, so there is no way of knowing where you will end up. It is a free decision to buy a ticket, but one that has genuine consequences (lose and you are poorer than you were before; win and you are richer). It is also a decision that is made with a reasonable understanding; 70% of adults in Britain play on a regular basis, so the experience of regular losses will soon teach them the unlikelihood of a big win.
Think about it - by buying a lottery ticket, 40 million of us are buying into a proposal for a profoundly unequal society, where 89% lose out entirely, 10% make modest gains and, if 45 million play, just one of them might become staggeringly wealthy in an evening. Over two thirds of adults in Britain play regularly, so from behind the veil of ignorance, most people are choosing not a more egalitarian society, but one far less equal than the one we have already.
We should not take this too far; although buying a lottery ticket does cause a loss, for most people it is a small one compared to their income. Although the result supports a libertarian view, it could also be consistent with a safety-net welfare state with a certain level of tax and welfare to support a sufficient minimum income before taking a gamble on the rest. But what this practical application of Rawls’ veil of ignorance does not justify is any idea of financial equality as an objective for society.