Let's consider first Hayek's claim that prices in free market capitalism do not give people what they morally deserve. Hayek's deepest economic insight was that the basic function of free market prices is informational. Free market prices send signals to producers as to where their products are most in demand (and to consumers as to the opportunity costs of their options). They reflect the sum
total of the inherently dispersed information about the supply and demand of millions of distinct individuals for each product. Free market prices give us our only access to this information, and then only in aggregate form. This is why centralized economic planning is doomed to failure: there is no way to collect individualized supply and demand information in a single mind or planning agency, to
use as a basis for setting prices. Free markets alone can effectively respond to this information.
It's a short step from this core insight about prices to their failure to track any coherent notion of moral desert. Claims of desert are essentially backward-looking. They aim to reward people for virtuous conduct that they undertook in the past. Free market prices are essentially
forward-looking. Current prices send signals to producers as to where the demand is now, not where the demand was when individual producers decided on their production plans. Capitalism is an inherently dynamic economic system. It responds rapidly to changes in tastes, to new sources of supply, to new substitutes for old products. This is one of capitalism's great virtues. But this responsiveness
leads to volatile prices. Consequently, capitalism is constantly pulling the rug out from underneath even the most thoughtful, foresightful, and prudent production plans of individual agents. However virtuous they were, by whatever standard of virtue one can name, individuals cannot count on their virtue being rewarded in the free market. For the function of the market isn't to reward people for
past good behavior. It's to direct them toward producing for current demand, regardless of what they did in the past.
This isn't to say that virtue makes no difference to what returns one may expect for one's productive contributions. The exercise of prudence and foresight in laying out one's production and investment plans, and diligence in carrying them out, generally improves one's odds. But
sheer dumb luck is also, ineradicably, a prominent factor determining free market returns. And nobody deserves what comes to them by sheer luck.
For Rawls simultaneously appeals to the natural outlook of a democratic society to found his conception of the person, and to his conception of the person to found the basic structure of a democratic society. The warrant of the doctrine of two moral powers is that it ‘suits’ a society in which justice is conceived as fairness; and the warrant of justice as fairness, with its schedule of
fundamental principles and primary goods, is that it ‘protects’ the exercise of the two moral powers. The attenuated idea of a person is the theoretical plinth of a desirable constitution, determining what count as primary goods ‘in advance’ of any further requirements of social life – yet is also no more than an ideological reflex of the culture it is supposed to generate. In a vicious
circle, public arrangements are deduced from personal capacities defined as adapted to public arrangements.
What are the fundamental motives that explain the present rivalry of armaments in Europe, notably the Anglo-German? Each nation pleads the need for defence; but this implies that someone is likely to attack, and has therefore a presumed interest in so doing. What are the motives which each State thus fears its neighbors may obey?
They are based on the universal assumption that a nation, in
order to find outlets for expanding population and increasing industry, or simply to ensure the best conditions possible for its people, is necessarily pushed to territorial expansion and the exercise of political force against others…. It is assumed that a nation's relative prosperity is broadly determined by its political power; that nations being competing units, advantage in the last resort
goes to the possessor of preponderant military force, the weaker goes to the wall, as in the other forms of the struggle for life.
The author challenges this whole doctrine. He attempts to show that it belongs to a stage of development out of which we have passed that the commerce and industry of a people no longer depend upon the expansion of its political frontiers; that a nation's political
and economic frontiers do not now necessarily coincide; that military power is socially and economically futile, and can have no relation to the prosperity of the people exercising it; that it is impossible for one nation to seize by force the wealth or trade of another — to enrich itself by subjugating, or imposing its will by force on another; that in short, war, even when victorious, can no
longer achieve those aims for which people strive….
We no longer petition legislature or Congress to give of the right to vote, but appeal to women everywhere to exercise their too long neglected "citizen's right" … We assert the province of government to be to secure the people in the enjoyment of their unalienable rights. We throw to the winds the old dogma that governments can give rights.
Driven away by barbarian thrumming the Muse has spurned the six-footed exercise ever since she beheld these patrons seven feet high.
Where we observe the predominance of one technology or one economic outcome over its competitors we should thus be cautious of any exercise that seeks the means by which the winner's innate 'superiority' came to be translated into adoption.
In view of this grave and unprecedented outrage, the House may be assured that his Majesty's Government will take without delay appropriate steps to vindicate the authority of the law and to protect officers and servants of the King and his Majesty's subjects in the exercise of their duties and in the enjoyment of their legal rights.
In the coming months the need is for the people of this country to do two things. First, to increase the national production; and, secondly, to exercise restraint in demands for increased incomes and self-control in expenditure. … I am confident that in peace just as we did in war, Britain will conquer them by determination, hard work, and by the cooperation of all.