Social Choice and Welfare

WS 2020/21
Lecture 13
Distributive justice, Rawlsian maximin principle

Prof. Dr. Anke Gerber

Universität Hamburg

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 6. Distributive Justice

Rawlsian Maximin Principle

Rawls’s (1971) concept of justice as fairness is based on two principles:

The first principle requires that each individual has an equal right to
the most extensive basic liberty compatible with a similar liberty for
others, where basic liberties are political liberty, freedom of speech,
the right to hold personal property etc.

The second principle (difference principle) requires that social and

economic inequalities are to be arranged such that they are to the
greatest benefit of the least advantaged members of society and
attached to offices and positions open to all members of society (fair
equality of opportunity).
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Rawls justifies his difference principle by arguing that behind a veil of

ignorance, i.e. without knowledge about the own position in society, about
the own wealth etc., everyone would agree to maximize the benefit of the
least advantaged member of society, because this could turn out to be the
position an individual may end up after the veil has been lifted.

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According to Rawls, individual benefits should not be measured in terms of

utility but by an index of primary goods (basic liberties, opportunities,
powers, self-respect, income, wealth).

Observe that Rawls’s concept of primary goods is non-welfaristic and

means-oriented: Individuals need primary goods in order to execute
individual rational plans with different ends.

Economists have reformulated Rawls’s difference principle in terms of

utilities which then allows for comparison with the utilitarian rule.

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 6. Distributive Justice

In order to define the maximin rule and its lexicographic extension, we first
define the rank of an individual for a given alternative x and a given utility
profile U:

Order the individuals according to the utility levels u(x, i) they achieve for
alternative x

I Observe that this requires that utility levels can be compared across
individuals.

Then let 1x (U) be the individual with the highest utility for alternative x,
2x (U) the individual with the second highest utility, . . . , nx (U) the
individual with the lowest utility for alternative x. Ties are broken in an
arbitrary way.
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 6. Distributive Justice

Example

Let there be four individuals and let

u(x, 1) = 3, u(x, 2) = 5, u(x, 3) = 1, u(x, 4) = 2.

Then
1x (U) = 2, 2x (U) = 1, 3x (U) = 4 and 4x (U) = 3.

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 6. Distributive Justice

Consider first the maximin rule which maximizes the utility of the worst-off
individual in society:

(Maximin Rule)
The maximin rule is the SWF which has the property that for all utility
profiles U and for all alternatives x and y ,

xRU y ⇐⇒ u(x, nx (U)) ≥ u(y , ny (U))

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 6. Distributive Justice

Example

Let there be four individuals and let

u(x, 1) = 3, u(x, 2) = 5, u(x, 3) = 1, u(x, 4) = 2.

and
u(y , 1) = 6, u(y , 2) = 0, u(y , 3) = 2, u(y , 4) = 4.

Then u(x, 4x (U)) = 1 > u(y , 4y (U)) = 0 and hence, xPU y .

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 6. Distributive Justice

One problem with the maximin rule is that it yields a social indifference
whenever the worst off individuals under two alternatives have the same
utility.

I The maximin rule violates the strict Pareto principle SPO.

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 6. Distributive Justice

Example

Let there be four individuals and let

u(x, 1) = 3, u(x, 2) = 5, u(x, 3) = 1, u(x, 4) = 2.

and
u(y , 1) = 5, u(y , 2) = 6, u(y , 3) = 1, u(y , 4) = 3.

Then u(y , i) ≥ u(x, i) for all i and u(y , i) > u(x, i) for i = 1, 2, 4, and
SPO would require that yPU x.

Since u(x, 4x (U)) = 1 = u(y , 4y (U)), under maximin it follows that xIU y
(IU is the social indifference relation) and hence SPO is violated.
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 6. Distributive Justice

In order to recover SPO, consider the following lexicographic extension of

the maximin rule, the leximin rule:

Under the leximin rule xPU y , if either the worst off individual is better off
under x than under y , or the worst off individuals under x and y have the
same utility and the second worst off individual is better off under x than
under y , or . . . . Formally:

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 6. Distributive Justice

(Leximin Rule)
The leximin rule is the SWF which has the property that for all utility
profiles U and for all alternatives x and y ,

xPU y ⇐⇒ there exists a rank k, 1 ≤ k ≤ n with

u(x, kx (U)) > u(y , ky (U)) and

u(x, `x (U)) = u(y , `y (U)) for all ` > k, ` ≤ n

I Observe that the leximin rule satisfies SPO. In particular, in the

previous example under leximin we would get yPU x.

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The leximin rule is characterized by the conditions AN, SPO, IU and a

fourth condition called “equity”:

(Equity EQ)
For all utility profiles U, for all alternatives x and y , and for all individuals
i and j, whenever for all individuals h different from i and j

u(x, h) = u(y , h)

and
u(y , i) < u(x, i) < u(x, j) < u(y , j)

then xPU y .

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 6. Distributive Justice

Hence, if individual i is worse off than individual j no matter which of the

alternatives x or y obtains, and if all other individuals are indifferent
between x and y , then the preference of individual i should determine the
social preference, i.e. i is a positional dictator (the position of the
individual determines dictatorship, not the individual’s name as in Arrow’s
non-dictatorship condition).

Obviously, the equity condition requires that utility levels are comparable
across individuals.

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 6. Distributive Justice

The leximin rule satisfies EQ

Consider a utility profile U and two alternatives x and y such that there
are two individuals i and j with

u(y , i) < u(x, i) < u(x, j) < u(y , j)

and
u(x, h) = u(y , h) for all h 6= i, j.

Then there are two cases.

Case 1: For all h 6= i, j

u(x, h) = u(y , h) ≤ u(y , i) < u(x, i) < u(x, j) < u(y , j).

Then by definition of the leximin rule it follows that xPU y .

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 6. Distributive Justice

Case 2: There exists some h 6= i, j, such that

u(y , i) < u(x, h) = u(y , h).

Then there exists some k such that ky (U) = i and kx (U) = i or

kx (U) = h for some h 6= i, j, and

u(x, `x (U)) = u(y , `y (U)) for all ` > k.

Since u(x, kx (U)) > u(y , ky (U)) by definition of the leximin rule it follows
that xPU y .

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 6. Distributive Justice

Theorem
The leximin rule is the unique social welfare function that satisfies the
conditions AN, SPO, IU, and EQ.

Note that the characterizations of the utilitarian rule and the leximin rule
imply that the utilitarian rule violates EQ and that the leximin rule violates
CMCU.

Prof. Dr. A. Gerber (Universität Hamburg) Social Choice and Welfare, WS 2020/21 17 / 19
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Harsanyi (1975)1 criticized Rawls’s maximin principle by arguing that it

reflects an attitude of extreme risk aversion: When choosing between two
alternatives behind the veil of ignorance an individual is assumed to
consider only the worst possible position under the two alternatives and to
ignore all other positions the individual may end up in with positive
probability.

1
Harsanyi, J. C. (1975) “Can the Maximin Principle Serve as a Basis for Morality? A
Critique of John Rawls’s Theory,” The American Political Science Review, 69, 594-606.
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 6. Distributive Justice

Instead Harsanyi suggested that behind the veil of ignorance rational

decisions should be taken according to Bayesian decision theory, i.e. by
assigning an equal probability to any position in society and choosing the
alternative x which maximizes the expected utility

1 1 1
u(x, 1) + u(x, 2) + . . . + u(x, n) (1)
n n n

Observe that this is equivalent to the utilitarian rule since maximizing (1)
is the same as maximizing

u(x, 1) + u(x, 2) + . . . + u(x, n).

Prof. Dr. A. Gerber (Universität Hamburg) Social Choice and Welfare, WS 2020/21 19 / 19