Rawls, Piketty and the New Inequality
47 Pages Posted: 13 Feb 2016
Date Written: January 1, 2016
The forty year period 1970-2010 saw two developments in the USA: first, at the level of theory, intense academic interest in the egalitarianism of John Rawls. Second, at the level of practice, fundamental changes in the institutions, policies and norms of US society that have led Gilens and Page  to conclude that it has become an oligarchy de facto if not de jure. A central component in that practical development is the tolerance of extensive inequality and the emergence of not merely the "1 percent", but the elevation of an "upper decile" of wealthy individuals into a position of economic and political dominance. In spite of pioneering work by Krouse, MacPherson and Arneson, little academic attention has been paid to whether a political economy with roots in Rawls's work might be the most effective response to these practical and institutional changes. That situation may be about to change given the popular, as well as academic, response to Thomas Piketty's Capital in the Twenty-First Century. In this paper I will consider whether a form of economic system described by Cambridge economist James Meade – a common source for both Rawls and Piketty – offers a feasible egalitarian ideal. It will be argued that the USA represents a "test case" for other advanced democracies faced with the challenge of a new form of patrimonial capitalism. It is further argued that only a structural change to society's fundamental wage setting institutions, along the lines recommended by Meade and Rawls and implicit in Piketty, will bring about the necessary structural change to implement a political economy for a just society.
Keywords: inequality, John Rawls, Thomas Piketty, egalitarianism
JEL Classification: E12, E66
Suggested Citation: Suggested Citation