In Chapter 9, Varoufakis finally gets around to mentioning philosopher John Rawls. To be fair to one of my favorite targets of obloquy, Bush administration sock puppet Chairman of the Council of Economic Advisers N. Gregory Mankiw, Mankiw’s introductory economics textbook mentions Rawls and his maximin criterion “that government should aim to maximize the well-being of the worst-off person in society” (Principles of Economics 448) in his book’s Chapter 20, but quickly dismisses Rawls with the twin canards that (1) increased equality of incomes diminishes the willingness of people to work hard and (2) increasing equality of opportunity is more important than increasing equality of outcomes. I won’t go into the problems with either of those flimsy excuses for maintaining positions of privilege here, since people at other weblogs dealing with economic and social issues have done a much more intelligent, detailed, and graceful job than I could. Anyway: Varoufakis summarizes Rawls nicely, starting from the point that as a society, “we are far too caught up in our own self-interest to be truthful in our assessment of what society should be like” since “History has repeatedly shown that those who end up as rich and powerful soon afterwards manage to convince themselves that they deserved to become so and, therefore, that the society that brought them riches, power and fame must have been just and beyond criticism or reform” (256).
Rawls finds a way around this problem of blinding self-interestedness via what many are by now familiar with as the veil of ignorance.
According to Varoufakis, the veil of ignorance is “A hypothetical scenario according to which individuals select, from a menu of alternative socio-economic arrangements, the society which they want to live in without knowing which social role, preferences, income distribution, gender, race, etc. they will have in that society” (258). Mankiw describes the veil of ignorance somewhat differently, but perhaps more clearly: “Imagine that before any of us is born, we all get together for a meeting to design the rules that would govern society. At this point, we are all ignorant about the station in life each of us will end up filling. [. . .] In this original position, Rawls argues, we can choose a just set of rules for society because we must consider how those rules will effect every person” (448). One can see how such a situation — this hypothetical veil of ignorance — would point towards the maximin (i.e., “Choose the income distribution which maximises the minimum income” [Varoufakis 260]) criterion described above. And for Varoufakis, “The policy implication is clear: the State must intervene by taxing the rich, transferring income to the poor, creating a safety net with a minimum health and education provision; in short, the rational State fosters social justice” (263). I’ll point out here that I’ve also been reading Greider’s The Soul of Capitalism, and Greider offers some genuinely interesting non-governmental interventions — interventions by pension funds, individuals, and corporations — that seem to offer an alternative to the social democracy Varoufakis is after and also a more effective version of some of the interventions called for by J. K. Gibson-Graham in The End of Capitalism (As We Know It). I’ll have more to say about Greider in the coming days, and more to say about Rawls, as well.
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