Here is the challenge that anyone interested in combining market economics with fairness faces.
Consider the experiments in market economics, first done by Vernon Smith. Here is a nice example.
"The simple experimental design outlined above provides a building block for all subsequent experimental market designs. After all, a market at its core is nothing other than a place where bilateral trades are facilitated between multiple buyers and sellers. Suppose we want to construct a market with 5 sellers and 5 buyers. In this case we would hand a card to each seller indicating the cost of production. For example, one seller would be given a card indicating a cost of $10. The other four sellers would have costs of $12, $14, $16, and $18. People assigned to be buyers would receive a card indicating their resale value. Continuing the example, suppose these values were $22, $20, $18, $16, and $14. Each seller and each buyer in this design have the opportunity to make one transaction.
Given the range of values for buyers and the range of costs for sellers, what will occur when they are allowed to trade? Will sellers have the upper hand? Will the buyers? Will all trades that might benefit both buyers and sellers occur or will some beneficial trades fail to take place because of incomplete information or so-called market failure? When trades do take place will they be across a wide range of prices or a narrow band?
Economic theory in its simplest incarnation of supply and demand makes a strong set of predictions. What are the supply and demand schedules here? Consider an axis set that has price on the vertical axis and quantity on the horizontal axis. The supply schedule answers the question "How many units would voluntarily be brought to the market at different prices?" Thus supply in this experimental structure is an ascending stair-step pattern that starts at $10 and rises $2 per step for each unit in the market. Above $18 the supply curve is vertical for no other than the fifth unit can ever be purchased in this setting. Likewise, the demand schedule answers the question "How many units will be voluntarily purchased in the market at different prices?" Using the same analysis as that for the sellers, we find that the demand schedule is a descending stair-step pattern that starts at $22 and falls $2 per step for each unit demanded in the market. Below a price of $14 the demand schedule also is vertical for no more than the five units are desired in this setting. For this scenario, textbook economics predicts that equilibrium will be reached where supply equals demand. In this case that means that four units would be traded at the identical price of $16."
Smith and others showed the simple double auction, buyers yelling out their prices, and sellers yelling out theirs, would produce the equilibrium of 4 trades at $16. (It is still a mystery theoretically as to why so few traders are needed.)
A moment's reflection shows that this equilibrium with four trades produces great inequalities, or potentially great inequalities. And the cost producer with $18 is shut out.
It also doesn't take much reflection to see that each buyer/seller could be splitting $4 if an omniscient being could mediate and match the high cost producer with the high cost resellers.
But the design question is how would you rearrange the auction rules to bring about the more fair result?

Regarding Mr. Rawls' "justice as fairness" there inlies the flaw. For justice is much more than the uncertainty or grey area of fairness, rather justice is the absolute certain equality of nature's single truth.
Truth would serve the universe better than only fair, and equality would unite the differences and make us truly One.
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MJA

Regarding Mr. Rawls' "justice as fairness" there inlies the flaw. For justice is much more than the uncertainty or grey area of fairness, rather justice is the absolute certain equality of nature's single truth.
Truth would serve the universe better than only fair, and equality would unite the differences and make us truly One.
=
MJA

Hi there, not sure if you guys respond to questions but thought I'd ask here anyway. Many would argue that it's a fear of poverty that drives us to work hard and without this fear, the incentive disappears. So, what happens when an inordinately large number of people decide that the 'lowest acceptable level' (LAL) is fine for them? Where will the hard work and innovation that has made our lives in the last 200 years better/easier/etc come from then?
And beyond this, there are inherent problems in deciding what the lowest acceptable level should be. I believe it was mentioned that it should be decided upon by vote. But this then subjects the whole system to a new set of problems that can arise from the idea that majority rules. Eg., who says the majority is right, and if the majority rules, this means that there is still a (possibly large) contingent of people out there who do not believe the LAL is in its correct place. So, how is this any different than what we see now with the ongoing debate over whether the poor are either getting too much or not getting enough? There would STILL be those that are unhappy with the treatment of the poor. And likely, many.
And finally, it seems there's an assumption that Rawls' system would fix the problem of today's poor. But who's to say that the majority wouldn't decide that a lower level than what we're currently seeing isn't acceptable? Some would argue that with today's social programs, the poor have it easier than they should...
Anyway, thanks for the program guys!
Scott

I wholeheartedly disagree with several assertions made by the previous poster 'Scott'.
First, the notion that hard work and innovation has been the driving force that has made our lives better over the last 200 years is nonsense. Throughout the gilded age, workers in this country were exploited, manipulated, and murdered in the streets to increase the wealth of a tiny sliver of the population. It wasn't until social welfare programs put in place by FDR in response to a near civil war that we started to see genuine improvement in the majority of our countrie's citizens' lives.
Don't believe me? Here is one example : http://www.continuetolearn.uiowa.edu/laborctr/child_labor/about/us_histo....
Do you think that ending child labor was an example of paternalism? A libertarian in that era would have said so. In the 30's, elderly people that could no longer work were starving in the streets... is big government social security another example of paternalism? These government programs driven by the needs of the worst off improved our society as a whole. The free and unfettered market ideal worked in resistance to that end.
You also seem to miss the point about 'deciding' what the lowest acceptable level of human poverty would be. John Rawls has an answer for you, and it's called the veil of ignorance. How would you structure society if you had no idea what your place in that society would be? It's similar in principle to a rule my Dad taught me when I was dividing a piece of pie with my brother. If I am the one dividing the pieces, then I get last pick. It ensures that the decisions I make when dividing the pie are made fairly.
Rawls' theory is about just that, fairness. It's not that everyone is going to have a wonderful life whether they work hard or not... it's that everyone is entitled to the same opportunity to live a successful and happy life. In America, we believe that if you work hard you can succeed. To this end we must ensure that we do everything we can to make that principle a reality. That means setting up a safety net or societal structure that will give more help to a poor, black child whose father is in jail and whose mother is addicted to crack to ensure that no matter what your situation or background, that even he or she has the same chance to succeed that I do being born in privelege.
I think this makes intuitive sense to most Americans. I often use Rawls' theory as a conversion tool against libertarians and find it to be the most effective method to combat a libertarian's inegalitarian, simplistic framework.
By the way, anyone exposed to today's poor wouldn't say that they have it easier than they should. That's frankly an offensive position. I know that you (Scott) are not necessarily saying that... you are saying that 'others' say that... but let me tell you. I work for a State Rep and I am fairly engaged in my community. Most poor people are poor not because they are lazy, but because of some external circumstance. Some have been preyed upon by high interest pay day loan or home loan scams, many had parents that couldn't provide for them and were therefore not able to get the education they would need for a good job. Some work hard but rack up uncontrollable debt. In the South where they have no public transportation systems there is the added cost of owning a car that can drive hardowrking folks into the ground. Oligopolies in the telecommunications market keep access to information and communication a privelege despite being public goods. The quality of your education depends on where you live and who your parents are.. I could go on and on.
In the 50's you could come straight out of high school with no college degree and work in a factory, be able to afford a home and have children. Now, the only jobs available to non college grads are non-union, service industry jobs where the wages are too low to even cover rent. Real wages have consistently been DROPPING since the 70's. You think things haven't changed? Look at the cost for a college degree. I owe 20 thousand dollars in student loans, and I paid for my first YEAR without taking out any loans. I worked full time at Mcdonald's for 5 years while going to school... closing the store 5 days a week. I worked my ass off and have zero savings today and nothing but debt. That was WITH my parents help. I wouldn't be here today if I'd had a parent in jail, or if my parents had been poor. Please remember that the post world war II economy was the greatest in the history of the world. Don't expect that people who have failed to make it today just aren't working as hard as you, the situation has changed dramatically.