concept of community, or to suppose that society is an organic whole
with a life of its own distinct from and superior to that of all its members
in their relations with one another. Thus the contractual conception of the
original position is worked out first. It is reasonably simple and the
problem of rational choice that it poses is relatively precise. From this
conception, however individualistic it might seem,
we must eventually
explain the value of community. Otherwise the theory of justice cannot
succeed. To accomplish this we shall need an account of the primary good
of self-respect which relates it to the parts of the theory already devel-
oped. But for the time being, I shall leave these problems aside and
proceed to consider some further implications of the two principles of
justice for the economic aspects of the basic structure.
42. SOME REMARKS ABOUT ECONOMIC SYSTEMS
42. Economic Systems
It is essential to keep in mind that our topic is the theory of justice and not
economics, however elementary. We are only concerned with some moral
problems of political economy. For example, I shall ask: what is the
proper
rate of saving over time, how should the background institutions
of taxation and property be arranged, or at what level is the social mini-
mum to be set? In asking these questions my intention is not to explain,
much less to add anything to, what economic theory says about the
working of these institutions. Attempting to do this here would obviously
be out of place. Certain elementary parts of economic theory are brought
in solely to illustrate the content of the principles of justice.
If economic
theory is used incorrectly or if the received doctrine is itself mistaken, I
hope that for the purposes of the theory of justice no harm is done. But as
we have seen, ethical principles depend upon general facts and therefore
a theory of justice for the basic structure presupposes an account of these
arrangements. It is necessary to make some assumptions and to spell out
their consequences if we are to test moral conceptions. These assump-
tions are bound to be inaccurate and oversimplified, but this may not
matter too much if they enable us to uncover the
content of the principles
of justice and we are satisfied that under a wide range of circumstances
the difference principle will lead to acceptable conclusions. In short,
questions of political economy are discussed simply to find out the practi-
cable bearing of justice as fairness. I discuss these matters from the point
of view of the citizen who is trying to organize his judgments concerning
the justice of economic institutions.
234
Distributive Shares
In order to avoid misunderstandings and to indicate some of the main
problems, I shall begin with a few remarks about economic systems.
Political economy is importantly concerned with the public sector and the
proper form of the background institutions that regulate economic activ-
ity, with taxation
and the rights of property, the structure of markets, and
so on. An economic system regulates what things are produced and by
what means, who receives them and in return for which contributions,
and how large a fraction of social resources is devoted to saving and to
the provision of public goods. Ideally all of these matters should be
arranged in ways that satisfy the two principles of justice. But we have to
ask whether this is possible and what in particular these principles re-
quire.
To begin with, it is helpful to distinguish between two aspects of the
public sector; otherwise the difference between a private-property econ-
omy and socialism is left unclear. The first
aspect has to do with the
ownership of the means of production. The classical distinction is that the
size of the public sector under socialism (as measured by the fraction of
total output produced by state-owned firms and managed either by state
officials or by workers’ councils) is much larger. In a private-property
economy the number of publicly owned firms is presumably small and in
any event limited to special cases such as public utilities and transporta-
tion.
A second quite different feature of the public sector is the proportion
of total social resources devoted to public goods. The distinction between
public and private goods raises a number of intricate points,
but the main
idea is that a public good has two characteristic features, indivisibility
and publicness.
4
That is, there are many individuals, a public so to speak,
who want more or less of this good, but if they are to enjoy it at all must
each enjoy the same amount. The quantity produced cannot be divided up
as private goods can and purchased by individuals according to their
preferences for more and less. There are various kinds of public goods
depending upon their degree of indivisibility
and the size of the relevant
public. The polar case of a public good is full indivisibility over the whole
society. A standard example is the defense of the nation against (un-
justified) foreign attack. All citizens must be provided with this good in
the same amount; they cannot be given varying protection depending on
their wishes. The consequence of indivisibility and publicness in these
4. For a discussion of public goods, see J. M. Buchanan,
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