The Tullock-Bastiat hypothesis and Rawlsian distribution strategies

Abstract

In an earlier article we, with David Sollars, examined the Tullock-Bastiat hypothesis that there is a 'natural' distribution of income, one which may be altered by governmental policy only to a very limited extent (Vedder, Gallaway and Sollars, 1988). In this essay we will explore some further implications of this finding within the context of John Rawls' analytical framework for dealing with the distributional issue (Rawls, 1971). Rawls has suggested an interesting approach to the problem of what constitutes a 'just' distributional system within a modern society. His conceptualization of an appropriate method of approaching this question is to pose the query, 'What set of outcomes would be preferred by people if, a priori, they had no knowledge of their relative position in the resultant distribution?' This has the effect of drawing a 'veil of ignorance' across the final outcomes of the distributive process, thus shifting the emphasis in people's decision making away from their own special situation towards some consideration of what would be regarded, before the fact, as a 'fair' or 'just' system of distribution. In order to give additional precision to this analysis, Rawls postulates certain principles of justice that he feels would govern people's actions behind the 'veil of ignorance.' Especially important in this respect is his notion that, '... the general conception of justice requires that all primary social goods be distributed equally unless an unequal distribution would be to everyone's advantage.' (Rawls, 1971: 150). Such a proposition implies that departures from a regime of perfect equality can only be justified if the outcome is a positive sum game. Rawls illustrates this precept with discussions of the relationship between the outcome for the most advantaged in society compared to the outcome for the least advantaged. We will approach the subject within that general framework while, at the same time, integrating into the Rawlsian analysis the results of our exploration of the Tullock-Bastiat hypothesis. Obviously, our emphasis will be on the economic dimensions of Rawls' argument, namely, the pattern of income distribution within the society. We be-