Rawls and exploitation

image: Karl Marx by David Levine

It is interesting to consider whether the principles of justice that Rawls describes in A Theory of Justice would in fact permit economic exploitation in Marx’s sense of the term. Do Rawls's two principles of justice permit what Marx would call systemic exploitation of one group of individuals by another?  A very interesting post by Will Wilkinson in BigThink suggests that Rawls was a more radical critic of capitalism than we thought, and the reasoning he puts forward is very relevant to the question of justice and exploitation.

First, the basics.  Marx believed that the greatest accomplishment of his economic theory in Capital (link) was its ability to explain how exploitation could occur within a system of free and unforced exchanges among equals, including employers of labor and sellers of labor time.  The exploitation of the serf by the lord within feudalism depends on forcible extraction and coercion. But how could exploitation take place in a system of free exchange?

Marx’s concept of exploitation is formulated in the language of labor value and surplus value. The value of a commodity is equal to the quantity of socially necessary labor time involved in its production. The capitalist purchases the worker’s labor time for a wage that is the equivalent of a certain number of labor hours X. The length of the working day is greater than X. The capitalist subtracts the cost of constant capital (machinery depreciation, space, and raw materials), and is left with a positive sum of value in the form of profit. And this fund of surplus value permits accumulation into the next cycle of economic activity.  Marx describes this as extraction of surplus value and as technical exploitation by the capitalist of the worker.

The key question about whether exploitation is just by Rawls's principles, then, is whether the two principles permit private ownership of the means of production and whether they permit a generalized system of wage labor in which the labor time of the worker is purchased on the basis of a wage set by a competitive labor market. If so, then Marx would conclude that exploitation is compatible with the principles of justice; if not, then we have a basis for thinking that the two principles are powerful enough to rule out exploitation.

Rawls is explicit in holding that laissez-faire capitalism is unjust.  This is because of the difference principle.  The difference principle mandates that the condition of the worker should be better than it would be without this system of capital and labor, which may entail transfer of wealth through taxation to bring the worker’s welfare up to that standard. Laissez-faire capitalism is not just, according to the two principles because it lacks fiscal and legislative means for transferring wealth to improve the condition of the least-well-off (see the discussion of a property-owning democracy in an earlier post). But if just institutions permit ownership of capital and generalized wage labor, then Marx would still regard this as a system of exploitation and surplus extraction.

So the key question is whether the two principles of justice permit private property in the means of production and a system of wage labor.  There are two plausible approaches we can take on this question, leading to different results.

The answer, it would appear, does not depend on the second principle of justice (the difference principle) but rather the first principle of justice (the liberty principle).  This is Wilkerson's central point: does the liberty principle include protection of economic rights, including the right to own the means of production and the right to buy and sell labor power?

It is possible to read the liberty principle as representing a form of Lockean liberalism, with rights of life, liberty, and property to be protected above all else.  And in fact, Rawls explicitly includes the right to hold (personal) property as a right protected by the liberty principle.  It is only a small step to argue that ownership of property extends to all potential things.  On this interpretation, some form of capitalism follows.  If the first principle permits private ownership of property, including property in the means of production, then it is not inherently unjust to derive income from ownership of property and to hire workers to make one's property "productive". Further, if the first principle entails the right to use one's labor as one chooses, then presumably one has the right to sell one's labor time.  This is the essence of capitalism.  The second principle may moderate the effects of this system; but at best we get welfare capitalism instead of laissez-faire capitalism, and we get exploitation in the technical sense.  A surplus is transferred from the workers who create it to the owners of capital.

But perhaps the liberty principle doesn't in fact support these economic rights after all.  This is Wilkerson's argument, and it is the basis for his claim that Rawls is more radical than we thought.  And it is the view that Sam Freeman explores in greater depth in his book Rawls.  In a nutshell, Freeman gives an extensive argument for concluding that Rawls does not include these economic rights under the liberty principle (the right to own and accumulate capital and the right to buy and sell labor time).  Here is Freeman's position:

Then again, Rawls resembles Mill in holding that freedom of occupation and choice of careers are protected as a basic freedom of the person, but that neither freedom of the person nor any other basic liberty includes other economic rights prized by classical liberals, such as freedom of trade and economic contract. Rawls says that freedom of the person includes having a right to hold and enjoy personal property. He includes here control over one's living space and a right to enjoy it without interference by the State or others. The reason for this right to personal property is that, without control over personal possessions and quiet enjoyment of one's own living space, many of the basic liberties cannot be enjoyed or exercised. (Imagine the effects on your behavior of the high likelihood of unknowing but constant surveillance.) Moreover, having control over personal property is a condition for pursuing most worthwhile ways of life. But the right to personal property does not include a right to its unlimited accumulation. Similarly, Rawls says the first principle does not protect the capitalist freedom to privately own and control the means of production, or conversely the socialist freedom to equally participate in the control of the means of production (TJ, 54 rev.; PL, 338; JF, 114). (Kindle Locations 1239-1248). 

Unlike John Locke, then, John Rawls does not accept the fundamental moral rights that give rise to capitalism as basic rights of liberty. If these rights are to be created within a just society, they must be governed by the difference principle.  Or in more contemporary terms: Rawls and Nozick part ways on liberties even more fundamentally than they do on distributive justice (Anarchy, State, and Utopia).

If we accept Freeman's argument (and Wilkinson's) -- and I am inclined to -- then the answer to the question posed above is resolved. The two principles of justice are not apriori committed to the justice of the basic institutions of capitalism; and therefore Rawls's system is not forced to judge that exploitation is just.  Or more affirmatively: exploitation is unjust.

What is surprising about this conclusion is the fact that it is surprising, now forty years after the original publication of A Theory of Justice.  The first generation of readers of the theory formed a compelling impression that the book was largely centered on liberal welfare market society -- perhaps something along the lines of Nordic social democracy.  And yet the passages and ideas that Freeman calls out were there all along.  So it is surprising that the radicalism of Rawls's critique was not better recognized in the 1970s.