Abstract
In this paper, we present a socioeconomic model illustrating the difference principle first proposed by John Rawls (1971). We demonstrate that this principle can be fulfilled by incorporating reciprocity into the basic structure of society. We show its appropriate embodiment in external increasing returns in line with traditional neoclassical economic theory, which is the exact mechanism described by Rawls (1971, 2001). Our model yields an intuition and interpretation of the principle by showing its implementation in the market equilibrium. Moreover, the model will show that the utilitarian principle, i.e., the maximization of the total (average) utility leads to advantaged people monopolizing all wealth as a just state of society. We also discuss the sociopolitical conditions necessary for the difference principle model to be stable and sustained.
Highlights
John Rawls [1] proposed and established the difference principle as an alternative to the utilitarian principle in social justice
We present a socioeconomic model illustrating the difference principle first proposed by John Rawls (1971)
Following Rawls, we conclude that under those conditions, the difference principle will be effective as a principle of justice for regulating the economic differences in a society characterized by property-owing democracy or liberal socialism
Summary
John Rawls [1] proposed and established the difference principle as an alternative to the utilitarian principle in social justice. Rawls eliminated the first three regimes (a) to (c) because he felt that they violated the principles of justice from the outset and concluded: This leaves (d) and (e) above, property-owing democracy and liberal socialism: their ideal description include arrangements designed to satisfy the two principles of justice
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