Economic Staff Paper Series Economics

This paper considers the problem of applying a theory of justice, especially that of Rawls, to appraise the justice of social institutions. In the first place, one must have a measure of the reasonable expectations of members of society. The measure proposed in this paper is the Shapley value of game theory. One can argue on behalf of this measure that it is consistent both with Rawls ' notion of pure procedural justice and with Rawls ' conception of the background institutions of justice. In the second place, one must have and defend a rule which judges the basic structures of societies on the basis of the reasonable expectations of their members. The paradigm case consists of four different basic structures appraised by six different rules. The major comparison, however, is between Rawls* Difference Principle and Bentham's utilitarian rule. The main argument for any rule is that, within a basic structure, it lead to a social equilibrium, and that the basic structure itself be an equilibrium with respect to alternative basic structures. Equilibrium in the latter sens