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THE RAWLSIAN VIEW OF PRIVATE ORDERING

Published online by Cambridge University Press:  02 June 2008

Kevin A. Kordana  and
David H. Blankfein Tabachnick
Kevin A. Kordana
Affiliation:
Law, University of Virginia Law
David H. Blankfein Tabachnick
Affiliation:
Law, Yale University
Rights & Permissions [Opens in a new window]

Abstract

The Rawlsian texts appear not to be consistent with regard to the status of the right of freedom of association. Interestingly, Rawls's early work omits mention of freedom of association as among the basic liberties, but in his later work he explicitly includes freedom of association as among the basic liberties. However, freedom of association would appear to have an economic component as well (e.g., the right to form a firm). If one turns to such “private ordering” (e.g., contract, partnership, and corporate law), we find a similar ambiguity in the Rawlsian texts, as well as sharp divisions in the contemporary literature on Rawlsianism. This ambiguity has engendered widespread confusion over the scope of the two principles of justice—leading to the contemporary dispute over the breadth of what Rawls calls the “basic structure” and the question of whether the principles of justice are properly understood to govern private ordering. There is significant disagreement over the breadth of Rawls's basic structure—one aspect is whether the principles of justice apply to the private law. In a controversial passage in Political Liberalism Rawls addresses this question. This passage has, however, led commentators to reach divergent conclusions. We argue that this disagreement is explained by an instructive confusion in the passage over the distinction between what we characterize as “pre-institutional” and “post-institutional” freedom (vis-á-vis contract and property). The passage, we argue, illicitly shifts from invoking the post-institutional sense of “freedom” to the pre-institutional sense, thereby causing significant though understandable disagreement. Rawls's lapse into the pre-institutional conception of “freedom” provides interpretive grounds for the narrow understanding of the basic structure. If Rawls, however, had invoked the sense of “freedom” to which he is entitled at this stage of his theory—the post-institutional conception—such disagreement need not have arisen.

Information

Type
Research Article
Information
Social Philosophy and Policy , Volume 25 , Issue 2 , July 2008 , pp. 288 - 307
Copyright
Copyright © Social Philosophy and Policy Foundation 2008

I. Introduction

While the right to freedom of association has been the subject of interesting and important work in constitutional law scholarship,Footnote 1 the topic is also illustrative of important fault lines between and within various liberal schools of thought. Within any scheme of political and legal institutions, questions arise, for example, as to the justification of various forms of private ordering—for example, the firm. Unsurprisingly, different conceptions of liberalism offer different answers to such questions. Lockean liberals and libertarians might be expected to view such questions as requiring the working out of the relationship between one's natural (economic) rights and other social values. Contemporary egalitarian liberals with a more skeptical view of a natural right to private property typically hold a more distributive view of institutional design and regulation (e.g., Rawlsians).

Interestingly, the answer to the question of the status of the right to freedom of association is not only sharply controversial between liberal camps (e.g., Rawlsians and Lockeans), but, surprisingly, appears to be quite controversial even within the contemporary egalitarian camp: Rawlsianism. Indeed, the Rawlsian texts appear not to be consistent with regard to the status of the right to freedom of association. John Rawls's early work omits mention of freedom of association as among the basic liberties, but in his later work he explicitly includes freedom of association as among these liberties.

In addition, contemporary literature on Rawlsianism is highly divided over the status of “private ordering” in Rawlsianism. If we narrow our focus to questions of economic association, that is, private ordering (e.g., contract, partnership, and corporate law), we find a similar ambiguity in the Rawlsian texts. This ambiguity has engendered widespread confusion over the scope of the two principles of justice—leading to the contemporary dispute over the breadth of what Rawls calls the “basic structure” and the question of whether the principles of justice are properly understood to govern private ordering. This ambiguity has, as we will argue, engendered further discussion in private law theory over the question of whether Rawlsianism (properly understood) is neutral between conceptions of the private law and economic associations: for example, the dispute over the ex ante and ex post conceptions of contract theory.Footnote 2

In what follows, we discuss the right to freedom of association in Rawlsianism and explain what we take to be the source of the ambiguity in question. We argue that the ambiguity owes to the fact that (for Rawls) the right to freedom of association is best understood as a complex right: a conjunction (or bundle) of two distinct sorts of liberties: basic (noneconomic) liberties conjoined with nonbasic (economic) liberties. We then maintain, however, that disambiguating the right to freedom of association in this fashion exposes two further puzzles in Rawlsianism and the literature on Rawls and private ordering: first, the dispute over the breadth of the basic structure and the question of whether private ordering is properly understood as governed by the two principles of justice; and second, if private ordering is indeed within the bounds of the basic structure and subject to the two principles of justice, whether the first principle of justice is properly understood to play a significant role in Rawlsian private ordering.

We maintain that the solutions to these significant puzzles turn upon what appears to be a conflation in Rawlsianism over two distinct conceptions of “freedom”—on one hand, what we call “pre-institutional” (or natural) freedom, and on the other, “post-institutional” (or constructed) freedom. While Rawls accepts the distinction between pre- and post-institutional conceptions of freedom and acknowledges that (going forward from the original position) he is entitled only to the “post-institutional” conception, in discussing these matters he illicitly slips into propounding a pre-institutional (seemingly, Lockean) conception. We maintain that recognition of this conflation explains the confusion surrounding the basic structure and the role the two principles of justice play in private ordering and thus sheds light on the Rawlsian view of freedom of association.

II. Rawls and the Right to Freedom of Association

The status of a right to freedom of association in a Rawlsian scheme of legal and political institutions is, from Rawls's texts, neither obvious nor uncontroversial. In A Theory of Justice, Rawls, patterning the United States Constitution, indicates that the basic liberties to be constructed and protected by the first principle of justice include “freedom of … assembly,”Footnote 3 but he does not mention freedom of association explicitly. However, in Political Liberalism, when discussing the basic liberties Rawls includes “the political liberties and freedom of association.”Footnote 4 In Justice as Fairness: A Restatement, Rawls notes that “liberty of conscience and freedom of association are to ensure the opportunity for the free and informed exercise of [the] capacity [to form and pursue a conception of the good].”Footnote 5

Given this ambiguity, it is an open question for Rawlsianism whether or not freedom of association is properly understood as a basic right, constructed by the first principle of justice in its provision of a package of liberties adequate to the full exercise of the two moral powers: “the capacity for a sense of justice” and “the capacity for a conception of the good.”Footnote 6 This ambiguity leads to a dilemma for Rawlsianism: either the right to freedom of association is best understood as a basic, though noneconomic right, constructed by the first principle of justice and thus constitutionally protected, or it is best viewed as one of many conceivable nonbasic and therefore nonguaranteed economic rights constructed by the second principle of justice in conjunction with the entire economic scheme. In Rawls's earlier work, he appears to have grasped the second horn of the dilemma, but then in his later work he seems to have been drawn to the first.

In our view, the source of the ambiguity and the resultant dilemma is the fact that freedom of association for Rawls is best understood as a complex right; it conjoins a set of personal liberties (e.g., the freedom of assembly and the freedom to form intimate relationships) with a set of economically oriented liberties (i.e., the rights of private ordering). Given the complex nature of the right to freedom of association and the ambiguity surrounding this right, the ambiguity in the Rawlsian text is understandable. The constitutive personal and economic components of the right to freedom of association interestingly straddle the (arguably) most central distinction in Rawlsianism—the bifurcation between basic (personal) and nonbasic (economic) liberties.Footnote 7

The Rawlsian texts are sometimes vague about the extent to which property constructions (i.e., the details of ownership and liability) are made at the level of the first or of the second principle of justice. For example, in writing about the “distribution of native endowments,” Rawls writes: “It is not said that this distribution is a common asset: to say that would presuppose a (normative) principle of ownership that is not available in the fundamental ideas from which we begin the exposition.”Footnote 8 He goes on to say that by “agreeing to [the difference] principle, it is as if [we] agree to regard the distribution of endowments as a common asset. What this regarding consists in is expressed by the difference principle itself.”Footnote 9 This might be interpreted to mean that property constructions are largely second-principle matters. Theories of property and ownership are not available at the first-principle level, and instead emerge as constructions of the difference principle.

However, in the very next paragraph, he writes:

Note that what is regarded as a common asset is the distribution of native endowments and not our native endowments per se. It is not as if society owned individuals' endowments taken separately, looking at individuals one by one. To the contrary, the question of ownership does not arise; and should it arise, it is persons themselves who own their endowments: the psychological and physical integrity of persons is already guaranteed by the basic rights and liberties that fall under the first principle of justice.Footnote 10

While we offer below a reading that provides a unified Rawlsian interpretation of these passages, it might seem that this latter paragraph suggests that (some) property constructions are a first-principle matter: native endowments are “owned” by their holders as a first-principle matter. The key to understanding what Rawls means here is to understand that the first-principle right to “psychological and physical integrity” need not entail a full-blown property right—that is, persons might be understood as having, as a first-principle matter, the right to bodily organs vital to survival, but not necessarily the right to “own” their particular organs. When Rawls, in the second paragraph, uses the term “own,” he must be understood as using that term in the pre-institutional sense in which his critics, such as Robert Nozick, use it. Crucially, however, this usage is not available in Rawls's own theory, where property rights are post-institutional creations. Property constructions in native endowments might, then, emerge from the difference principle, as stated in the first passages. But they are not entirely a second-principle construction, in the sense that their construction at the second-principle level must satisfy the first principle's demand for a scheme adequate to the exercise of the two moral powers.

Return now to the right to freedom of association. On the one hand, it appears that the personal rights concerning, for example, the right of assembly or the right to form intimate relationships, are what Rawls calls basic liberties—properly understood as subject to the first principle of justice and to be constitutionally protected. On the other hand, the right to freedom of association also appears to be comprised of an economic component which, if it is to exist for Rawls, is properly understood to be under the governance of the second principle of justice, constructed so as to maximize the position of the least well-off in conjunction with the complete scheme of economic institutions, subject to the lexically prior demands of equal opportunity and the first principle of justice.Footnote 11

The Rawlsian texts, interestingly, invite the view—and Rawls himself at times appears to hold the view—that the right to freedom of association must be included among the basic liberties. We have, however, argued elsewhereFootnote 12 for what we call the “high” Rawlsian position: namely, the view that all robust economic constructions and baselines—the full details of tax and transfer policies, property rules, the rules of contract law and tort law, etc.—are properly understood, for Rawls, as second-principle matters. In the high Rawlsian view, the economic component of the right to freedom of association turns on a distributive baseline set by the second principle of justice. Our idea is that even conceptions and details of “economic freedom” are underdetermined at the stage of the first principle of justice. For Rawls (unlike Locke or Nozick), of course, the outcomes of “free” consensual market transactions have no particular normative privilege. Indeed, the very notion of “freedom” as it pertains to economic arrangements in any purported right to freedom of association requires a distributive or economic baseline.

For Rawls, economic freedom is post-institutional freedom or what we have described as a set of “options open,” constructed by the difference principle.Footnote 13 In our view, for Rawls, the very question of the economic associations in which one is “free” to engage is itself a question requiring an economic baseline. For Rawls, of course, it is the difference principle, not the first principle of justice, which sets such baselines. To invoke a right to freedom of association (in the economic realm) at the first-principle stage is to invoke an alternative or exogenous economic baseline which is unavailable to Rawlsianism. Since the right to freedom of association is, as we have argued, in some measure a function of economic liberties constructed as a second-principle matter, the first principle of justice cannot serve as the basis for the full-blown right.

Despite what we have described as the high Rawlsian position, there remains a question over the precise role (if any) that the first principle of justice might play in the construction of property baselines and economic liberties, given the demand for what Rawls calls “personal property.” Rawls admittedly appears reluctant to commit to relegating all property matters to the second principle of justice. He notoriously maintains that the right to hold what he describes as personal property is basic and under the control of the first principle of justice, but he is also clear that the robust details of this rudimentary right are to be constructed by the second principle of justice.Footnote 14

He writes, “Two wider conceptions of the right of property as a basic liberty are to be avoided. One conception extends this right to include certain rights of acquisition and bequest.”Footnote 15 The point of our high Rawlsian position is that the details of any economic scheme are second-principle constructions. Rawls's notion of “personal property” is a rudimentary right best understood as the very minimal demand for the “material basis” of “independence” and “self-respect,”Footnote 16 consistent with Rawls's general property skepticism and the full range of possible economic schemes. Any robust details of the economic component of the right to freedom of association—for example, the right to form a firm—would go well beyond the mere minimal right to “personal property.” Rawls writes that a second conception of property as a basic liberty which is to be avoided is “the equal right to participate in the means of production and natural resources.”Footnote 17 For Rawls, there is, at the stage of the first principle of justice, the open possibility of even perfect equality in economic matters (as a second-principle construction); any economic right to freedom of association must not be so robust as to dictate details of a specific economic scheme.Footnote 18

Return to the ambiguity surrounding the right to freedom of association in Rawlsianism. Assuming that the two principles of justice govern private ordering and that (following the high Rawlsian position) robust conceptions of property or economic relations must be governed by the second principle of justice, one may justifiably conclude that private ordering is best understood as a second-principle construction. The ambiguity in Rawls's texts likely arises from the fact that the right to freedom of association is comprised of both personal and economic liberties and is properly understood as straddling the first-principle/second-principle bifurcation; this, in turn, helps resolve the ambiguity. There is for Rawls no commitment to freedom of association in private ordering at the first-principle stage. Any basic right to freedom of association must protect merely personal (noneconomic) liberties. Thus, the full-blown right to freedom of association for Rawls, were it to exist, would be in a significant measure a second-principle construction.

III. Disagreements about the “Basic Structure”

For Rawlsian political theory, the two principles of justice are taken to apply to the basic structure of society.Footnote 19 There is, however, significant disagreement over the breadth of the basic structure and its relationship to private ordering. Arguably, Rawls has, in different passages, espoused differing conceptions of the breadth of the basic structure, some narrow and some broad.Footnote 20 Attention to the question of the breadth of the basic structure may be motivated by a variety of concerns: we focus, in what follows, upon one—namely, the question of whether or not the principles of justice apply to private ordering.

There are several accounts of the breadth of the basic structure. In the narrow view, the basic structure is comprised only of constitutional essentials and society's system of taxation and transfer. In this view, private ordering lies outside the bounds of the basic structure, beyond the reach of the distributive aims of the two principles of justice. The two principles of justice, in this view, are thought to swing clear of private ordering.Footnote 21 If the narrow view of the basic structure is correct, Rawlsian political philosophy is, as it is often thought to be, silent or neutral with regard to the structure of private ordering (e.g., the institutions of contract, tort, and bankruptcy). Rawlsianism, then, would be neutral with regard to the contemporary debates in legal theory between, for example, the autonomy and wealth-maximization conceptions of contract law or the deterrence and corrective-justice conceptions of tort law.Footnote 22

The narrow view is contrasted with other, broader, conceptions. In the wide view, chiefly associated with A Theory of Justice, the two principles of justice are taken to apply to all institutions which significantly affect the distribution of primary goods and one's life prospects. Rawls himself mentions, for example, the monogamous family and the social practice of promising.Footnote 23 In the coercive conception, the principles of justice are taken to apply to all of society's coercive political and legal institutions.Footnote 24 If such a broader conception of the basic structure is correct, private ordering—given its (at least partially) coercive nature, the significant role it plays in the distribution of primary goods, and the effect it has on one's life prospects—is properly understood as within the bounds of the basic structure and is, therefore, constructed in service to the distributive aims of the two principles of justice.Footnote 25 Rawlsianism then would not properly be understood as silent with regard to private ordering; a distributive-justice conception would be required.

Rawls recognizes the significance of this issue. Seemingly in response to Robert Nozick's criticismsFootnote 26 that Rawlsian distributive justice can be made to seem objectionable because it is inconsistent with the purportedly appealing features of Nozick's Lockean-libertarian conception of transfer,Footnote 27 Rawls addresses the relationship between the basic structure and private ordering in a complex and controversial passage on pages 268–69 of Political Liberalism, in “The Basic Structure as Subject.” Rawls writes:

Thus … we arrive at the idea of a division of labor between two kinds of social rules, and the different institutional forms in which these rules are realized. The basic structure comprises first the institutions that define the social background and includes as well those operations that continually adjust and compensate for the inevitable tendencies away from background fairness, for example, such operations as income and inheritance taxation designed to even out the ownership of property. This structure also enforces through the legal system another set of rules that govern the transactions and agreements between individuals and associations (the law of contract, and so on). The rules relating to fraud and duress, and the like, belong to these rules, and satisfy the requirements of simplicity and practicality. They are framed to leave individuals and associations free to act effectively in pursuit of their ends and without excessive constraints.

To conclude: we start with the basic structure and try to see how this structure itself should make the adjustments necessary to preserve background justice. What we look for, in effect, is an institutional division of labor between the basic structure and the rules applying directly to individuals and associations and to be followed by them in particular transactions. If this division of labor can be established, individuals and associations are then left free to advance their ends more effectively within the framework of the basic structure, secure in the knowledge that elsewhere in the social system the necessary corrections to preserve background justice are being made.Footnote 28

This passage has, unfortunately, neither helped to clarify Rawls's own thinking on the issue, nor helped to clarify the most philosophically defensible Rawlsian position. Indeed, the passage has contributed to disagreement and prompted further commentary. G. A. Cohen has suggested, for example, that “[p]uzzlement with respect to the bounds of the basic structure is not relieved by examination of the relevant pages of Political Liberalism.”Footnote 29 Thomas Pogge has maintained that Rawls's views on the issue “are not merely vague but also ambiguous.”Footnote 30

Other commentators, however, have found in this passage from Political Liberalism strong support for the narrow conception of the basic structure. If the passage provides the needed textual and philosophical support for the narrow view, then the two principles of justice are, as is often conventionally thought to be the case, not properly understood to apply to the private law. The seemingly invited conclusion is that Rawlsianism is consistent with any number of (even nondistributive) private law conceptions (e.g., the autonomy conception of contract or the corrective-justice conception of tort law).

If, however, the passage can be shown to be consistent with a broader view of the basic structure, then Rawlsianism is not properly understood as neutral in this regard; private law institutions are subject to the two principles of justice. Liam Murphy, for example, while seeming to acknowledge that Rawls narrows the conception of the basic structure in the second paragraph of the passage, argues that contract law is most plausibly understood as within the bounds of the basic structure, and concludes that the second (narrowing) paragraph of the passage must be an unintended mistake. Murphy thus stipulates that “Rawls did not after all intend the account of the basic structure offered in ‘The Basic Structure as Subject’ to differ significantly from that offered in A Theory of Justice.”Footnote 31

In what follows, we explain why this passage has led commentators to reach such divergent conclusions about the basic structure and its relationship to the various conceptions of the private law. We argue that the disagreement is explained by an instructive confusion in the passage over the distinction between what we characterize as “pre-institutional” and “post-institutional” freedom. Once this distinction is drawn, the disagreement can be explained.Footnote 32 The passage, we argue, illicitly shifts from invoking the post-institutional sense of “freedom” to invoking the pre-institutional sense, thereby causing significant though understandable disagreement. Rawls's problematic lapse into the pre-institutional conception of “freedom” provides reasonable interpretive grounds for the narrow understanding of the basic structure. If Rawls, however, had instead remained consistent, invoking the sense of “freedom” to which he is entitled at this stage of his theory—the post-institutional conception—such sharp disagreement need not have arisen.

Once these two senses of freedom are distinguished and Rawlsianism, despite the confusion of the passage, is shown to require freedom in the post-institutional sense, we argue that the sharp disagreement over the relationship between the basic structure and the private law is explained. The passage can be coherently read to provide a plausible account of a broader conception of the basic structure that encompasses the private law, which entails that the private law, for Rawlsianism, is properly understood to answer to the distributive aims of the two principles of justice.

IV. “Freedom” in Rawlsianism

There are two important senses of “freedom” at work in Rawlsianism. The first is a commitment to freedom as a component of the plurality of values that constitute the original position.Footnote 33 This conception of freedom informs the original position (hereafter, OP). It is, however, understood to be—in the first instance—silent with regard to any particular economic construction or the specific details of economic rights and liberties, quite unlike the Lockean pre-institutional account of natural freedom and right. There is, however, also in Rawls a second, post-institutional conception of freedom or, as Rawls calls it, a set of “liberties,” constructed by the two principles of justice. It is important to recognize the role that each of these two conceptions of freedom plays in Rawlsianism. The first conception is, of course, a component of Rawls's initial justificatory project—if persons are taken to be morally bound by the OP-derived principles of justice, there must be an antecedent commitment, in some measure, to the idea of persons conceived of as free and equal. It is only against the backdrop of this set of values that sense can be made of the justificatory force that Rawls attributes to the OP-derived principles. Thus, the value of the person conceived of as free and equal is a crucial component of Rawlsianism that resides in the initial justificatory framework that (purportedly) legitimates the principles derived in the OP.

Once the two principles of justice are derived, however, direct appeal to the value of freedom, equality, any comprehensive moral doctrine, or any natural freedom or right is illicit. Going forward from the OP, the two principles of justice, for Rawls, define the conception of justice. The liberal commitment to freedom, however, has purportedly not simply fallen out of the picture; instead, Rawls takes it to be “built into” the two principles of justice themselves, in conjunction with the other values embedded in the OP construction. The two principles of justice, once derived, in turn construct society's complete set of legal and political institutions.

Thus, moving forward from the OP with the two principles of justice in place, there emerges a second, institutional, conception of freedom in Rawlsianism—namely, what we have called “post-institutional freedom.” This post-institutional freedom is the institutional set of legal and political “liberties” (or options open) constructed instrumentally in service to the demands of the two principles of justice, taken in lexical priority.Footnote 34 It is this post-institutional freedom or set of liberties that, for Rawls, constructs and frames the crucial liberal distinction between the public and private realms. These liberties are constructed instrumentally in service to the demands of Rawls's distributive principles. The post-institutional private realm so constructed is neither derived directly from nor taken to map in a one-to-one fashion Kantian or Lockean conceptions of autonomy or natural freedom.Footnote 35

V. The Ambiguity between Pre-Institutional and Post-Institutional Freedom

While Rawls accepts the distinction between what we call pre-institutional and post-institutional conceptions of freedom, he is not always clear as to which sense of the term he is invoking. The ambiguity is first introduced in Political Liberalism on pages 265–66 in a paragraph in which Rawls raises the issue of freedom of contract. In his response to Nozick, Rawls briefly adopts, for the sake of argument, the libertarian (pre-institutional) account of freedom and its associated entitlement conception of justice (or fairness). Rawls writes: “[S]uppose we begin with the initially attractive idea that social circumstances and people's relationships to one another should develop over time in accordance with free agreements fairly arrived at and fully honored” (emphasis added). He continues: “Straightaway we need an account of when agreements are free and the social circumstances under which they are reached are fair” (emphasis added), without which “the accumulated results of many separate and ostensibly fair agreements … are likely in the course of time to alter citizens' relationships … so that the conditions for free and fair agreements no longer hold.” Here, Rawls must have in mind that what is needed at the start is a post-institutional account of when agreements and social circumstances are free and fair. Footnote 36 That is, we need an account of institutional design in which the rules that govern contractual freedom (i.e., the institutional rules of contract law), in conjunction with all other background rules, are constructed in service to the demands of the two principles of justice.

However, Rawls goes on to say that “the role of the institutions that belong to the basic structure is to secure background conditions against which the actions of individuals and associations take place.” Here the sense of “freedom” he has in mind is ambiguous. That individual actions are taking place “against” “background conditions” could indicate a commitment to pre-institutional freedom for individual actions. In a post-institutional sense, individual actions might better be described as taking place within the set of institutional rules that has been created, rules which offer various options for individuals to pursue (while foreclosing other options).

The paragraph concludes, in an even more explicitly pre-institutional vein, that “[u]nless this structure is appropriately regulated and adjusted, an initially just social process will eventually cease to be just, however free and fair particular transactions may look when viewed by themselves” (emphasis added). Rawls has seemingly returned to the pre-institutional conception of “free” and “fair” with which he began the paragraph and does not appear to complete the thought with which he immediately followed: that “straightaway” we need an account of what it means for contractual relationships to be “free” and “fair” (in the Rawlsian post-institutional sense). In other words, individual transactions which do not accord with post-institutional demands would not even properly be understood as “fair,” from that post-institutional perspective. It would only be in the pre-institutional (Lockean) conception of freedom that they would be properly understood as “fair.” In subsequent passages of “The Basic Structure as Subject,” as we discuss in detail, Rawls continues to equivocate between these two important senses of “freedom,” an equivocation which has caused quite understandable disagreement over the bounds of the basic structure and its relationship to private law rules.

Now, return to the lengthy passage from pages 268–69 of Political Liberalism (quoted in Section III above). In the first paragraph, Rawls draws a distinction between rules that assist in maintaining “background fairness” and rules that address “transactions … between individuals.” The latter, he states, are to answer to the demands of “simplicity and practicality” and are “framed to leave individuals … free … in pursuit of their ends.” On the one hand, if one were to interpret “free” here in the pre-institutional sense, as is suggested by the word “leave” applied to “free,” the paragraph could reasonably be taken to support the narrow view of the basic structure. In this view, the rules of taxation and transfer lie within the basic structure and answer to the demands of the two principles of justice. Rules of contract law, however, lie outside the (narrow) basic structure, and may be derived either from pre-institutional Kantian notions of autonomy or natural freedom, or from the demands of “simplicity and practicality”—from the passage, it is unclear.

On the other hand, this first paragraph need not be read to invoke the narrow conception of the basic structureFootnote 37 and the pre-institutional conception of freedom. If one were to interpret “free” here in the post-institutional sense, as is suggested by the word “framed” (i.e., constructed) as applied to “free,” then a measure of contractual freedom has been constructed in service to the demands of the two principles of justice. In this view, the rules of contract law lie within the basic structure, and the extent to which such rules respond to the demands of “simplicity and practicality” must be viewed as simply a conjecture. In essence, Rawls can be read here as speculating that the preponderance of equity-oriented moves (i.e., those directed at achieving and maintaining “background fairness”) are best achieved in areas such as taxation, as opposed to the rules of the private law.Footnote 38 The extent to which this is true is, of course, an empirical question. Rawls's distinction between “two kinds of … rules” should be read as mere conjecture about optimal institutional design, rather than as a philosophical or principled distinction between rules guided by differing principles.Footnote 39 We return to this issue in greater detail in Section VI below. At the level of principle, for Rawls, all rules of legal and political institutions are to be constructed—in conjunction with one another—to best meet the demands of the two principles of justice.Footnote 40

That Rawls (incorrectly) has in mind the pre-institutional conception of freedom seems even more likely when we turn to the second paragraph of the passage from pages 268–69 of Political Liberalism. Here, he speaks of “an institutional division of labor between the basic structure and the rules applying directly to individuals … and to be followed by them in particular transactions.” This seems to provide grounds for narrowing the conception of the basic structure—contract law, for example, would seem to apply to individuals and particular transactions and therefore be contrasted with the rules of (and lie outside the bounds of) the basic structure. Furthermore, Rawls goes on to state that given this division of labor, “individuals … are then left free to advance their ends.” Here, Rawls seems to invoke the pre-institutional conception of freedom, since post-institutional freedom would be constructed in service to the demands of the difference principle, not simply “left free.” Pre-institutional freedom, in contrast, is “natural” freedom—which makes perfect sense in the context of being “left free” or left unfettered.

Rawls's central concern in the passage seems to be to respond to Nozick's charge that the two principles of justice will demand unacceptable interference with individual transactions,Footnote 41 which for Nozick, of course, are to be left free in the pre-institutional sense. Rawls could have met this objection, however, without narrowing the basic structure had he (correctly) stuck with the post-institutional conception of freedom throughout the passage.Footnote 42 This would have led Rawls to adopt the distributive-justice conception of contract (and the rest of the private law), in which individual transactions occur within the range of freedom constructed, in conjunction with the rules of all legal and political institutions, in service to the distributive demands of the two principles of justice. Such transactions are “freely” undertaken by parties exercising their post-institutional freedom, consistent with the constitutive rules of the basic structure.

In responding to Nozick's objection, Rawls seems inadvertently to lapse into Nozick's own pre-institutional conception of natural freedom that serves as the basis of the libertarian right to contract. Rawls mistakenly, given his avowed commitment to a post-institutional conception of freedom, places the private law outside the bounds of the basic structure, such that it may, then, be drawn directly from pre-institutional notions of freedom rather than constructed by the demands of the two principles of justice.

In meeting Nozick's objection, however, Rawls need not have adopted Nozick's libertarian conception of freedom. Rawls should have argued instead that the rules of economic arrangements, including the private law, although constructed in service to the demands of the two principles of justice, need not license unjustifiable, unannounced, or unpredictable governmental interference with individual transactions.Footnote 43 For Rawlsianism, because the two principles of justice define the conception of justice and the complete set of legal and political rules constructed instrumentally in service to them, any “interferences” with pre-institutional conceptions of contract rights are justified.

Return now to the disagreement engendered by the passage on pages 268–69 of Political Liberalism. On the one hand, proponents of the narrow view, in which the principles of justice do not apply to the private law, understandably ground their interpretation in a pre-institutional reading of the passage. In their view of Rawlsianism, the private law is not subject to the two principles of justice and may be drawn from values distinct from them (e.g., natural freedom, Kantian autonomy, or conceptions of natural justice). The resulting conclusion is that any number of private law conceptions may be consistent with Rawlsianism. In this view, the character of the private law is determined by the most plausible conception of the “natural” values one takes to be at stake.

On the other hand, while commentators holding broader conceptions of the basic structure have been correct in their conclusion that Rawlsianism must adopt a distributive-justice conception of the private law,Footnote 44 such views have not provided an account or explanation of the narrowing which has engendered the alternative view of the passage. Our account isolates and explains the source of this important and indeed reasonable disagreement in the literature and shows that there is, after all, a Rawlsian conception of the private law. Going forward from the original position, the conception of “freedom” in Rawlsianism, properly understood, is most consistent with both a broader conception of the basic structure and the distributive-justice conception of the private law. Rawlsianism, then, is not properly understood as neutral with regard to private law conceptions.

The Rawlsian idea appears to be that the moral values of freedom and equality that inform the OP demand “institutional background conditions” that ensure that agreements satisfy our pre-OP notions of freedom and equality. Private agreements and arrangements, however, cannot be guaranteed to be free and fair without background institutions that set the conception of freedom or fairness. The idea is that there is an initial normative demand to begin with an institutional account of fair background conditions which define the post-institutional conception of freedom. This account is motivated, of course, by Rawls's pre-OP commitment to persons conceived of as free and equal. However, in the discussion of freedom and fairness, Rawls inadvertently slips into the Lockean notion of pre-institutional freedom, as opposed to his own set of (noneconomic) values that inform the OP.

The Rawlsian view appears to be this: For agreements to count as free or fair, they must satisfy “institutional” (fair background) requirements, which themselves are motivated (though underdetermined) by the values that inform the OP. The post-institutional conception of justice—including the details of the economic scheme and the economic or property-oriented baselines—is then defined by the two principles of justice. Thus, the pre-OP values require that persons be treated fairly and as equals, but treating people fairly and as equals requires a basic structure (i.e., a set of political and legal institutions) that satisfies the two principles of justice.

The key to understanding the conflation is that while the values Rawls takes to inform the OP are, in a Rawlsian sense, “pre-institutional,” they are normatively prior to all economic constructions, which require the full set of political and legal institutions. These pre-OP values are not pre-institutional in the Lockean sense—they are void of all economic notions of freedom and property-oriented conceptions (in the absence of the full set of political and legal institutions). The difficulty with the passage, for Rawls, arises in that, in addressing Nozick, he appears to inadvertently slip into Nozick's own (full-blown) pre-institutional account of freedom and fairness—which derives, of course, from the Lockean entitlement conception of justice, which takes the existence of natural rights in property as a normative given.

VI. Institutional Design and Types of Legal and Political Rules

It is important to emphasize that even though private ordering is not outside the basic structure, there may, as a matter of institutional design, be identifiable differences between types of legal rules in the Rawlsian scheme of institutions designed in service to the two principles of justice. That is to say, a legal anthropologist might be able to make useful distinctions between “enabling rules” (e.g., rules of partnership law or of bequest, should they be constructed), rules that seem to be aimed directly at maintaining justice in distributive shares (e.g., income taxation), and rules that seem to be aimed at justice, but in a less than systematic way—that is to say, rules that need not affect broad groups of persons (as would income taxation). Examples of such rules might be strict liability for harms resulting from the use of lead paint or limitations on employment contracts with minors. However, the crucial mistake to be avoided would be to think that different groups of rules, so delineated, respond to different imperatives. All categories of rules have been constructed in service to the demands of the two principles of justice. The fact that some rules might more directly “pattern” the difference principle, and others not so obviously (since they find their home in an entire scheme of rules and institutions which, as a whole, best answers the demands of the two principles of justice), while perhaps of interest to note, does not mean that some rules are created with some other end in mind or in compliance with some principle other than to comply with the demands of Rawlsian justice.

Thus, the “division of labor” between kinds of rules spoken of by Rawls on page 268 of Political Liberalism must be viewed as a commentary on institutional design at a practical level. It does not mean that only some rules respond to the demands of justice, while other rules can be selected with some other end in mind. Similarly, in Justice as Fairness, Rawls writes that “[t]he difference principle might, then, roughly be satisfied by raising and lowering [the decent social] minimum and adjusting the constant marginal rate of taxation. The principle cannot be satisfied exactly…. No fine-tuning is possible anyway.”Footnote 45 Again, this cannot mean that rules other than those of taxation are not selected in service to the demands of the two principles of justice. Instead, it must be read as a practical commentary on institutional design in terms of what rules (here, income taxation) might most obviously pattern the difference principle. In terms of inter-schemic comparisons, if a scheme with a given tax system and no enabling rules renders the position of the least well-off lower than a scheme with the same tax system and enabling rules, then the latter scheme must be selected over the former. This is the sense in which all the rules in the system are selected in service to the demands of the two principles of justice, even though some rules (e.g., enabling rules) might not obviously pattern the difference principle.

Rawls writes elsewhere of the distinction between principles for individuals and principles for social institutions.Footnote 46 Importantly, however, what we have termed “private ordering” falls on the social institution side of this divide. In other words, because the enabling and regulation of private ordering—essentially, the construction of complex rules governing property—has pervasive effects on the position of the least well-off, such rules must answer to the demands of the two principles of justice. There is no commitment, in Rawlsianism, to any notion of “privacy” with respect to property matters.Footnote 47

VII. Conclusion

Despite the ambiguity in the Rawlsian texts, the right to freedom of association for Rawls is not, in its entirety, a basic right. The right's economic component—that is, the component of the right governing private ordering—is quite distinct from Lockean (or libertarian) conceptions. While certain liberties concerning economic associations might be constructed as a component of the complete scheme of economic institutions, this is true only as a matter of the demands of the second principle of justice. We have argued that the distinct components of this right illuminate a further important ambiguity in Rawlsianism, and we have argued that the puzzle surrounding this ambiguity may be resolved, once one recognizes the proper role of property in the Rawlsian scheme.

References

1 See, e.g., Shiffrin, Seana V., “What Is Really Wrong with Compelled Association?” Northwestern Law Review 99, no. 2 (2005): 839Google Scholar; Gutmann, Amy, ed., Freedom of Association (Princeton, NJ: Princeton University Press, 1998)Google Scholar; Stone, Geoffrey R., “The Equal Access Controversy,” Northwestern Law Review 81, no. 1 (1986): 168Google Scholar; and Karst, Kenneth L., “The Freedom of Intimate Association,” Yale Law Journal 89, no. 4 (1980): 624CrossRefGoogle Scholar.

2 In the ex post conception of contract law, the standard of justice invoked is endogenous to the terms of the contract (i.e., the will of the consenting parties). A particular contract is fair, because it was consented to (of course, consent requires some measure of information, capacity, and lack of duress). A promise, itself, is taken to be the procedure which generates the fair terms of contractual liability. In the ex ante conception, normative values or standards that are exogenous to the contract (i.e., external to the promise, or to the will of the parties) may be invoked as the basis of contractual liability; these standards are duty-imposing despite the fact that they do not arise from an explicit promise or from the will of the parties. Typically, such liability involves an appeal to general welfare, economic efficiency, or distributive justice.

3 Rawls, John, A Theory of Justice (Cambridge, MA: Harvard University Press, 1971), 61Google Scholar.

4 Rawls, John, “The Basic Liberties and Their Priority,” in Rawls, , Political Liberalism (New York: Columbia University Press, 1989), 291Google Scholar.

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6 Rawls, in Political Liberalism and in Justice as Fairness, treats the first principle of justice not as a maximizing principle, as it was in A Theory of Justice, but rather as a principle for the provision of adequate liberty to the exercise of what he calls the two moral powers. Rawls's revised first principle of justice states: “Each person has an equal right to a fully adequate scheme of equal basic liberties which is compatible with a similar scheme of liberties for all” (Rawls, “The Basic Liberties and Their Priority,” 291). With regard to the revised formulation of the first principle of justice, see also Rawls, Justice as Fairness, 42: “Each person has the same indefeasible claim to a fully adequate scheme of equal basic liberties, which scheme is compatible with the same scheme of liberties for all.” On the two moral powers, see Rawls, “The Basic Liberties and Their Priority,” 332.

7 In defending this bifurcation in previous work, we ourselves uncritically followed the later Rawls in placing the freedom of association squarely on the basic liberties side of the divide. We maintained, following the later Rawlsian texts, that the “more fundamental non-economic basic liberties that are central or necessary to the full exercise of the two moral powers [include] (for example, freedom of thought and conscience, freedom of religion, and freedom of association).” Kordana, Kevin A. and Tabachnick, David H., “On Belling the Cat: Rawls and Tort as Corrective Justice,” Virginia Law Review 92, no. 7 (2006): 1302Google Scholar.

8 Rawls, Justice as Fairness, 75.

9 Ibid.

10 Ibid.

11 The second principle of justice states: “Social and economic inequalities are to satisfy two conditions: first, they are to be attached to offices and positions open to all under conditions of fair equality of opportunity; and second, they are to be to the greatest benefit of the least-advantaged members of society (the difference principle).” Rawls, Justice as Fairness, 42–43.

12 The “high Rawlsian” position is (roughly) the view that the specific details of any economic liberties (including private law doctrine: contract, tort, etc.) are, for Rawls, a second-principle construction, to be constructed by the difference principle (constrained by equality of opportunity). See Kordana and Tabachnick, “On Belling the Cat: Rawls and Tort as Corrective Justice,” 1300–1306; Kordana, Kevin A. and Tabachnick, David H., “Rawls and Contract Law,” George Washington Law Review 73, no. 3 (2005): 609–10Google Scholar; and Kordana, Kevin A. and Tabachnick, David H., “Taxation, the Private Law, and Distributive Justice,” Social Philosophy and Policy 23, no. 2 (2006): 146Google Scholar.

13 Kordana and Tabachnick, “Rawls and Contract Law,” 620–23.

14 Rawls writes that “[a]mong the basic rights is the right to hold and to have the exclusive use of personal property…. Having this right and being able effectively to exercise it is one of the social bases of self-respect. Thus this right is a general right: a right all citizens have in virtue of their fundamental interests…. [W]ider conceptions of property are not used because they are not necessary for the adequate development and full exercise of the moral powers, and so are not an essential social basis of self-respect. They may, however, still be justified…. The further specification of the right to property is to be made at [the stage of the second principle's implementation].” Rawls, Justice as Fairness, 114.

15 Rawls, “The Basic Liberties and Their Priority,” 298.

16 Rawls, Justice as Fairness, 114.

17 Rawls, “The Basic Liberties and Their Priority,” 298.

18 Rawls, A Theory of Justice, 61; Rawls, “The Basic Liberties and Their Priority,” 298.

19 Rawls, A Theory of Justice, 7.

20 “[T]he whole concept of basic institutions in Rawls's theory is vaguer than one might expect, given the role he insists they are supposed to play in any adequate theory of social justice.” Bedau, Hugo Adam, “Social Justice and Social Institutions,” in French, Peter A. et al. , eds., Midwest Studies in Philosophy: Studies in Ethical Theory (Notre Dame, IN: Notre Dame Press, 1978), 169Google Scholar. Thomas Pogge writes that what he takes to be a broad conception of the basic structure found in A Theory of Justice “conflicts with a narrower understanding of the term which dominates Rawls's discussion in ‘The Basic Structure as Subject.’” Pogge, Thomas, Realizing Rawls (Ithaca, NY: Cornell University Press, 1989), 23Google Scholar. G. A. Cohen describes Rawls's account of the basic structure as embodying a “fatal ambiguity.” Cohen, G. A., “Where the Action Is: On the Site of Distributive Justice,” Philosophy and Public Affairs 26, no. 1 (1997): 11CrossRefGoogle Scholar. A. John Simmons writes: “[O]n what constitutes ‘the basic structure of society’ … Rawls may not have been entirely consistent.” Simmons, A. John, “The Duty to Obey and Our Natural Moral Duties,” in Wellman, Christopher Heath and Simmons, A. John, Is There a Duty to Obey the Law? (New York: Cambridge University Press, 2005), 157Google Scholar.

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24 Cohen, “Where the Action Is: On the Site of Distributive Justice,” 11.

25 For Rawls, each of the two principles of justice is distributive. If private law rules are to be constructed instrumentally in service to their distributive demands, Rawlsianism would, then, produce a distributive-justice conception of the private law. To what degree each of the two principles of justice would share in the private law construction is an open question, given that the rules of the private law may define some aspects of personal liberty and that they also construct economic liberties and define economic baselines. Our point is that, whatever the result, the conception of private law is distributive. Any coincidental patterning of, say, Charles Fried's “will theory” of contract, or of Lockean conceptions of property, would be a matter of mere overlap; such rules would have been constructed in service to the distributive aims of the two principles of justice and not directly drawn from comprehensive deontic principles. See Fried, Charles, Contract as Promise: A Theory of Contractual Obligation (Cambridge, MA: Harvard University Press, 1981)Google Scholar.

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27 John Rawls, “The Basic Structure as Subject,” in Rawls, Political Liberalism, 263 n. 6.

28 Ibid., 268–69 (emphasis added).

29 Cohen, “Where the Action Is: On the Site of Distributive Justice,” 19 n. 36.

30 Pogge, Realizing Rawls, 21.

31 Murphy, Liam B., “Institutions and the Demands of Justice,” Philosophy and Public Affairs 27, no. 4 (1998): 258, 261 and n. 30CrossRefGoogle Scholar.

32 Rawls accepts, although at times seems to underappreciate, the distinction between (roughly) the pre-institutional and post-institutional conceptions of freedom, and he acknowledges that it is the distribution of post-institutional “liberties” (or what we call “post-institutional freedom”) that is the concern of the first principle of justice, as opposed to “liberty as such” (or what we call “pre-institutional freedom”). For example, H. L. A. Hart argues that there are “important differences between Rawls's doctrine of liberty and Kant's conception of mutual freedom under universal law,” insightfully pointing out that the first principle of justice “refers not to ‘liberty’ but to basic or fundamental liberties, which are understood to be legally recognized and protected from interference.” Hart, H. L. A., “Rawls on Liberty and Its Priority,” in Daniels, Norman, ed., Reading Rawls (Stanford, CA: Stanford University Press, 1975), 234–35 and n. 6Google Scholar.

Rawls acknowledges the distinction: “Hart noted, however, that in Theory I sometimes used arguments and phrases which suggest that the priority of liberty as such is meant; although, as he saw, this is not the correct interpretation…. With Hart's discussion I agree, on the whole.” Rawls, “The Basic Liberties and Their Priority,” 292 and n. 7 (emphasis in the original). Rawls reiterates this point of agreement with Hart in Justice as Fairness, writing that “no priority is assigned to liberty as such, as if the exercise of something called ‘liberty’ had a preeminent value and were the main, if not the sole, end of political and social justice.” Rawls, Justice as Fairness, 44.

33 The original position is Rawls's hypothetical social choice scenario, in which idealized actors, maximizing their self-interest under conditions of imperfect knowledge, select principles of justice to govern social, political, and legal institutions.

34 Jonathan Wolff has also identified in Rawlsianism what we are describing as post-institutional freedom, calling it “formal liberty.” He writes: “After all, a Rawlsian pattern will allow a great deal of room for transfers, although some will probably be prohibited, while others made compulsory by taxation…. The right to liberty is, on this view, purely formal. It is, in essence, merely the right to do what you have a right to do.” Wolff, Jonathan, Robert Nozick: Property, Justice, and the Minimal State (Stanford, CA: Stanford University Press, 1991), 96Google Scholar.

35 Analogously, in discussing the distinction between natural (here, Lockean) and Rawlsian accounts of justice, A. John Simmons writes that, for Locke, “justice consists of satisfying pre-existing rights,” while, for Rawls, “some independently-defended standard of justice generates rights to just institutional arrangements.” Simmons, A. John, “Liberties and Markets,” Virginia Law Review 92, no. 7 (2006): 1629Google Scholar.

36 Rawls, Political Liberalism, 265–66. For Rawls, contra Nozick's entitlement theory of justice, the two principles of justice define the conception of fairness.

37 Liam Murphy, for example, argues that this paragraph can be viewed as invoking a single (basic) structure which includes both tax and transfer and the rules of property and contract. Murphy, “Institutions and the Demands of Justice,” 261 and n. 30.

38 Cf. Kaplow, Louis and Shavell, Steven, “Why the Legal System Is Less Efficient Than the Income Tax in Redistributing Income,” Journal of Legal Studies 23 no. 2 (1994), 667CrossRefGoogle Scholar.

39 Rawls, Political Liberalism, 268. Rawls frequently makes such conjectures concerning institutional design. See, for example, Rawls, A Theory of Justice, 277, where he surmises that the government's “distribution branch … imposes a number of inheritance and gift taxes, and sets restrictions on the rights of bequest.” No particular tax policies, however, are obviously required at the level of the two principles of justice, which construct the (distributive) scheme of political and legal institutions. For a discussion of the instrumental nature of tax policy, see Murphy, Liam and Nagel, Thomas, The Myth of Ownership: Taxes and Justice (New York: Oxford University Press, 2002), 15CrossRefGoogle Scholar.

40 On this matter, we are in agreement with Murphy, “Institutions and the Demands of Justice,” 259.

41 Assuming a Lockean baseline in natural (or pre-institutional) freedom, Nozick writes that “[t]o maintain a pattern one must either continually interfere to stop people from transferring resources as they wish to, or continually (or periodically) interfere to take from some persons resources that others … chose to transfer to them.” Nozick concludes by posing a question which takes as an assumption Lockean rights in ownership: “Why not have immediate confiscation?” Nozick, Anarchy, State, and Utopia, 163.

42 In an attempt to avoid Nozick's charge, Rawls narrows the scope of the basic structure, so as to leave private transactions “free” in the Nozickian (pre-institutional) sense. Rawls writes, “The difference principle holds, for example, for income and property taxation, for fiscal and economic policy. It applies to the announced system of public law and statutes and not to particular transactions or distributions…. The objection that the difference principle enjoins continuous corrections of particular distributions and capricious interference with private transactions is based on a misunderstanding.” Rawls, Political Liberalism, 283 (emphasis added).

43 Such institutions may well embody equity-oriented demands (e.g., minimum wage laws, substantive unconscionability doctrine, etc.) which, to be sure, are unacceptable given Nozick's libertarian commitments. See Kordana and Tabachnick, “Taxation, the Private Law, and Distributive Justice,” 153. The point is not that Rawls's two principles of justice will produce private law rules patterning the libertarian conception of private law, but rather that there is a plausible distributive-justice account of the private law open to Rawls, one that is not unjustifiably unstable or unpredictable. Of course, the ultimate character of private law rules is, for Rawls, an instrumental question.

44 Murphy, “Institutions and the Demands of Justice,” 260.

45 Rawls, Justice as Fairness, 161.

46 Rawls, A Theory of Justice, 108–9.

47 Contrast Arthur Ripstein, who reads the phrase “division of labor between two kinds of social rules” (Rawls, Political Liberalism, 268) as indicating that rules governing individual transactions fall on the “individual” side of the division, and hence are not regulated by the two principles of justice which govern the basic structure. Ripstein, “The Division of Responsibility and the Law of Tort,” 1812–13.