One point tho arguably not central to your essay, is important.
The main point of the Declaration of Independence is that free people have a right to be governed by their consent … even if it requires dissolving the political bonds of an existing, injurious government to form another, more supportive of their Rights and interests … BECAUSE their CREATOR has gifted them “the Rights to life, liberty and the pursuit of happiness”. In other words, those three Rights are justification for self government (and by inference, the price of attaining it).
My 2 cts (adjusted for actual currency devaluation and not, sadly, the Bureau of Labor Statistics’ deceitful claim)
Thanks for this essay. I hadn't heard before of Madison's idea that just laws should respond in some degree to an outcomes-based concept of equity. Something like this was eventually formalized by the late moral philosopher John Rawls (my father), who proposed that a just society must be responsive to claims of need.
As he originally stated his project in his early "Justice as Fairness" essay, Rawls sought to find "a proper balance" between three types of competing claims: claims of "liberty, equality, and reward for services contributing to the common good."
One way to find this "proper balance," he suggested, would be to set up a rule-making process that made it impossible for the rule-makers to arrange the rules to favor their own particular circumstances. Such rules would then be "fair" in the sense that they would not be tilted in anyone's favor, and if the rules were rules of justice, these fair rules would be legitimate, or valid, rules of justice.
Thus in Justice as Fairness rule-makers were tasked to come up with just rules for a repeated game, where they would randomly find themselves in a different position each time the game was played. If they tried to favor their current position, they would find themselves on the dis-favored side in subsequent go-rounds.
In this game, liberty and reward for contribution are the Hamiltonian part of the justice equation. Reward for contribution comes primarily in the form of market wages and profits, which operate through liberty of contract.
Equality is the Madisonian part of justice, referring not just to equal rights (which are actually part of liberty), but also to inequality of outcomes, and whether there is a point at which such inequalities become intolerable, or unjust.
This "equality" part of the equation is what Rawls ended up describing, in his later Theory of Justice (1971), in terms of a need to answer claims of need, which seems right. We can't be concerned just about differences in relative welfare, because that becomes envy, which Rawls described as an "antisocial sentiment" that cannot be part of any genuine concept of justice.
What matters is a person's absolute level of welfare, and this is easily seen via the repeated game scheme for locating fair rules. Rule-makers for a repeated game where no one knows what position he will occupy next, will all very much want for as few people as possible to fall into stunting conditions, where they never have a chance to attain much of their potential, affirming the need to answer claims of need.
That brings up the next question: is there a way for society to insure that such needs are met without destroying liberty and reward for contribution? Trying to figure that out was a great project, but Rawls failed in the execution.
He got bollixed up when he tried to refine his scheme for setting up a rulemaking context in which rule-makers could not write the rules to their own advantage.
He decided to switch from a repeated game to a position of choice behind a "veil of ignorance" about one's place in society. That's fine, but the problem is how he tried to justify this new formulation.
It didn't actually need any new justification. Since the veil of ignorance scheme would keep rule-makers from being able to tilt rules in their own favor, the rules arrived at in this hypothetical situation would be fair, just as in his original "Justice as Fairness" scheme.
Nevertheless, Rawls did try to supply an additional form of justification, and it messed everything up.
He decided to characterize the information about a person's particular circumstances that was being hidden as information that was morally irrelevant: the reason it was being excluded from deliberations about principles of justice is because it was irrelevant to those deliberations.
Sounds compelling. Leave out what is morally extraneous and the result will be pure justice. The problem is that this required finding some way to classify absolutely every aspect of everyone's actual position in the world to be morally irrelevant, or else people would be allowed to know that part about their actual circumstances, and would be able to use that information to tip rules in their own favor.
In particular, because desert is a moral concept, ways had to be found to deny that anyone can ever be said to deserve any of what they have, or that possession would be morally relevant.
Thus for Rawls' veil of ignorance to even exist, all claims of desert had to be denied from the outset. But that meant denying that anyone ever has any legitimate claims of due based on reward for having made a contribution.
By trying to arrive at his veil of ignorance by getting rid of morally irrelevant information, Rawls was forced to eliminate from his analysis the second most important category of claims that he had originally set out to balance against other claims.
Only claims of liberty (most important) and claims of need remained, with no weight given to however much a person might have contributed to society. It was a complete capsizing of Rawls' own original project, which had shown so much promise.
I have known for many years that I had a family obligation to one day fix this momentous mistake, not just because my father's Theory of Justice ended up asserting some very wrong and destructive equalitarian conclusions, but because a great chance to seek for reconciliation between claims of desert and claims of need (Hamiltonian and Madisonian values, I can now call them), had been missed.
In 2021 I finally got the chance to try to reverse these losses when my friend Bill Evers told the editors of The Independent Review that I might be able to write something for their upcoming retrospective on the 50th anniversary of Rawls's book.
They let me write a substantial piece, explaining where Theory went wrong and how to get it right, at which point a powerful reconciliation between claims of desert and claims of need is seen to be possible.
If anyone is interested, just search <Theory of Justice with claims of desert, Independent Review>.
Thanks for your interest Bradley. My dad and I talked about a lot of things, and maybe I can tell you some about that, but first I should fill in the punch line that I alluded to in my already long comment above: the resolution between Madisonian and Hamiltonian values that emerges when a proper fair balancing of claims of desert (claims to have earned the fruits of one's productivity) and claims of need (the Madisonian side of justice) is finally undertaken.
Hamilton, who was a financial genius, would have seen the resolution right away. He just needed to have the problem framed correctly. Once the concerns that Madison was raising are seen to be, at heart, a matter of concern for the needy, then we arrive at the problem Rawls posed in Justice as Fairness: how to fairly balance claims of need against claims of desert.
The perfect resolution would be if we can find a way to give aid to people who need it without without violating anyone's property rights. Is this possible? Can we give aid to Paul without robbing Peter?
Yes, by using most basic financial instrument after money itself: a loan. You lend the aid. You don't give it, but charge it to the account of the recipient, ideally to be repaid with full interest according to an ability to pay formula.
Not only is this the morally superior way to give whatever government aid may be given (since it does not violate property rights, or at least minimizes violation of property rights). It is also the most efficient way to give aid, yielding the most aid bang per aid buck spent.
That is because billing aid to the account of the recipient leaves incentives to responsible behavior as intact as possible. The prospect of having to repay any aid that is taken will go far to deter recipients from accepting government aid that they do not genuinely need.
Private charity is a separate matter. It is freely given so there is no question of violating anyone's property rights, and private charities can impose behavioral demands on recipients that government cannot without violating liberty.
My Independent Review essay does briefly get to this resolution. It's the payoff for going to the trouble of showing how Rawls' original goal of setting up a fair balancing between claims of liberty, desert, and need, can be achieved.
But it's okay to know the payoff up front, haha. I would put it in the Constitution.
It is unlikely that any of our existing aid programs are constitutional, given that there is no enumerated power to give aid, but that is no reason not to write in a back-up protection: that if any aid ever is given, it must be given this way. That at least minimizes the harms while maximizing the effectiveness.
Hamilton was spot on across the board. For the State to substitute ITS judgement for the judgement of the individuals involved in the trade would have been a VIOLATION of both their rights. Worse, it would have been the treatment of the individual as the PROPERTY of the State, to be disposed of as the State, not the individual, saw fit, to satisfy the State's ends, not the individual's ends.
If Madison's view had been accepted, it would have been a deadly blow to the fledgling nation's pledge to defend the individual's life and effort from being VIOLATED by any and all other human beings. It could easily have killed America in its crib.
There was an incident during this period that warrants your attention. In 1785, the US government defaulted on interest payments to the French government followed by a default on principal in 1787. By a series of machinations after the Constitution was ratified, this was eventually repaid.
Interesting, particularly in light of the essay I published this week, "American Schism," which has to do the Hamilton-Jefferson feud over how to interpret America's Treaty of Alliance with France in 1778.
I’m not a lawyer but in my liberal arts college, chose to take constitutional law. This was very helpful and provides great information that I didn’t get in my constitutional law class. In fact it was very poor given what I read here. Thank you.
Thank you for writing this. It sheds light on a significant historical event that is interpreted quite differently by economists who tend to leave out the substance of the ideas that were debated. Economists who lack historical depth, declare this event as the first instance of "insider trading" involving representatives of the people, and diminish its moral-legal significance.
As the founders rejected equitable adjustments of debts as only superficially just, and likely to lead to instability in contractual relationships, they would no doubt be interested in learning how such arguments have regained favor at present.
Once again in these series of essays you have shown where something I hadn't considered the origin of came from. It seems 'self s evident' that a contract should be upheld solely on it's terms and that anything else would be unjust. But this shows that such an idea has to come from a moral code that had not previously been the primary support for a government. It is only self-evident because Alexander Hamilton made it so. How do you think such a question would be handled by most modern legidlatures, however?
It's interesting how most corporations have corrupted moral contracts and morphed into us pages upon pages of predatory "terms and conditions" statements.
Today, no one would question the justice of paying market price for sovereign debt. This article provides a background on this practice that was new to me. As the problems of unpayable debt come to the fore, it will be interesting to see if our government continues to borrow at market rates. My bet is they will not
Since this essay is about Hamilton and Madison, I get why Madison is depicted at the top, but the left image looks like Jefferson. Was that intended, or am I wrong about the image?
Excellent article. Thank you.
One point tho arguably not central to your essay, is important.
The main point of the Declaration of Independence is that free people have a right to be governed by their consent … even if it requires dissolving the political bonds of an existing, injurious government to form another, more supportive of their Rights and interests … BECAUSE their CREATOR has gifted them “the Rights to life, liberty and the pursuit of happiness”. In other words, those three Rights are justification for self government (and by inference, the price of attaining it).
My 2 cts (adjusted for actual currency devaluation and not, sadly, the Bureau of Labor Statistics’ deceitful claim)
Thanks for this essay. I hadn't heard before of Madison's idea that just laws should respond in some degree to an outcomes-based concept of equity. Something like this was eventually formalized by the late moral philosopher John Rawls (my father), who proposed that a just society must be responsive to claims of need.
As he originally stated his project in his early "Justice as Fairness" essay, Rawls sought to find "a proper balance" between three types of competing claims: claims of "liberty, equality, and reward for services contributing to the common good."
One way to find this "proper balance," he suggested, would be to set up a rule-making process that made it impossible for the rule-makers to arrange the rules to favor their own particular circumstances. Such rules would then be "fair" in the sense that they would not be tilted in anyone's favor, and if the rules were rules of justice, these fair rules would be legitimate, or valid, rules of justice.
Thus in Justice as Fairness rule-makers were tasked to come up with just rules for a repeated game, where they would randomly find themselves in a different position each time the game was played. If they tried to favor their current position, they would find themselves on the dis-favored side in subsequent go-rounds.
In this game, liberty and reward for contribution are the Hamiltonian part of the justice equation. Reward for contribution comes primarily in the form of market wages and profits, which operate through liberty of contract.
Equality is the Madisonian part of justice, referring not just to equal rights (which are actually part of liberty), but also to inequality of outcomes, and whether there is a point at which such inequalities become intolerable, or unjust.
This "equality" part of the equation is what Rawls ended up describing, in his later Theory of Justice (1971), in terms of a need to answer claims of need, which seems right. We can't be concerned just about differences in relative welfare, because that becomes envy, which Rawls described as an "antisocial sentiment" that cannot be part of any genuine concept of justice.
What matters is a person's absolute level of welfare, and this is easily seen via the repeated game scheme for locating fair rules. Rule-makers for a repeated game where no one knows what position he will occupy next, will all very much want for as few people as possible to fall into stunting conditions, where they never have a chance to attain much of their potential, affirming the need to answer claims of need.
That brings up the next question: is there a way for society to insure that such needs are met without destroying liberty and reward for contribution? Trying to figure that out was a great project, but Rawls failed in the execution.
He got bollixed up when he tried to refine his scheme for setting up a rulemaking context in which rule-makers could not write the rules to their own advantage.
He decided to switch from a repeated game to a position of choice behind a "veil of ignorance" about one's place in society. That's fine, but the problem is how he tried to justify this new formulation.
It didn't actually need any new justification. Since the veil of ignorance scheme would keep rule-makers from being able to tilt rules in their own favor, the rules arrived at in this hypothetical situation would be fair, just as in his original "Justice as Fairness" scheme.
Nevertheless, Rawls did try to supply an additional form of justification, and it messed everything up.
He decided to characterize the information about a person's particular circumstances that was being hidden as information that was morally irrelevant: the reason it was being excluded from deliberations about principles of justice is because it was irrelevant to those deliberations.
Sounds compelling. Leave out what is morally extraneous and the result will be pure justice. The problem is that this required finding some way to classify absolutely every aspect of everyone's actual position in the world to be morally irrelevant, or else people would be allowed to know that part about their actual circumstances, and would be able to use that information to tip rules in their own favor.
In particular, because desert is a moral concept, ways had to be found to deny that anyone can ever be said to deserve any of what they have, or that possession would be morally relevant.
Thus for Rawls' veil of ignorance to even exist, all claims of desert had to be denied from the outset. But that meant denying that anyone ever has any legitimate claims of due based on reward for having made a contribution.
By trying to arrive at his veil of ignorance by getting rid of morally irrelevant information, Rawls was forced to eliminate from his analysis the second most important category of claims that he had originally set out to balance against other claims.
Only claims of liberty (most important) and claims of need remained, with no weight given to however much a person might have contributed to society. It was a complete capsizing of Rawls' own original project, which had shown so much promise.
I have known for many years that I had a family obligation to one day fix this momentous mistake, not just because my father's Theory of Justice ended up asserting some very wrong and destructive equalitarian conclusions, but because a great chance to seek for reconciliation between claims of desert and claims of need (Hamiltonian and Madisonian values, I can now call them), had been missed.
In 2021 I finally got the chance to try to reverse these losses when my friend Bill Evers told the editors of The Independent Review that I might be able to write something for their upcoming retrospective on the 50th anniversary of Rawls's book.
They let me write a substantial piece, explaining where Theory went wrong and how to get it right, at which point a powerful reconciliation between claims of desert and claims of need is seen to be possible.
If anyone is interested, just search <Theory of Justice with claims of desert, Independent Review>.
Regards, Alec Rawls
Many thanks, Alec, for this thoughtful and insightful reply. I will take a look at your article. Did you every discuss these issues with your father?
Thanks for your interest Bradley. My dad and I talked about a lot of things, and maybe I can tell you some about that, but first I should fill in the punch line that I alluded to in my already long comment above: the resolution between Madisonian and Hamiltonian values that emerges when a proper fair balancing of claims of desert (claims to have earned the fruits of one's productivity) and claims of need (the Madisonian side of justice) is finally undertaken.
Hamilton, who was a financial genius, would have seen the resolution right away. He just needed to have the problem framed correctly. Once the concerns that Madison was raising are seen to be, at heart, a matter of concern for the needy, then we arrive at the problem Rawls posed in Justice as Fairness: how to fairly balance claims of need against claims of desert.
The perfect resolution would be if we can find a way to give aid to people who need it without without violating anyone's property rights. Is this possible? Can we give aid to Paul without robbing Peter?
Yes, by using most basic financial instrument after money itself: a loan. You lend the aid. You don't give it, but charge it to the account of the recipient, ideally to be repaid with full interest according to an ability to pay formula.
Not only is this the morally superior way to give whatever government aid may be given (since it does not violate property rights, or at least minimizes violation of property rights). It is also the most efficient way to give aid, yielding the most aid bang per aid buck spent.
That is because billing aid to the account of the recipient leaves incentives to responsible behavior as intact as possible. The prospect of having to repay any aid that is taken will go far to deter recipients from accepting government aid that they do not genuinely need.
Private charity is a separate matter. It is freely given so there is no question of violating anyone's property rights, and private charities can impose behavioral demands on recipients that government cannot without violating liberty.
My Independent Review essay does briefly get to this resolution. It's the payoff for going to the trouble of showing how Rawls' original goal of setting up a fair balancing between claims of liberty, desert, and need, can be achieved.
But it's okay to know the payoff up front, haha. I would put it in the Constitution.
It is unlikely that any of our existing aid programs are constitutional, given that there is no enumerated power to give aid, but that is no reason not to write in a back-up protection: that if any aid ever is given, it must be given this way. That at least minimizes the harms while maximizing the effectiveness.
Hamilton was spot on across the board. For the State to substitute ITS judgement for the judgement of the individuals involved in the trade would have been a VIOLATION of both their rights. Worse, it would have been the treatment of the individual as the PROPERTY of the State, to be disposed of as the State, not the individual, saw fit, to satisfy the State's ends, not the individual's ends.
If Madison's view had been accepted, it would have been a deadly blow to the fledgling nation's pledge to defend the individual's life and effort from being VIOLATED by any and all other human beings. It could easily have killed America in its crib.
Well put!
There was an incident during this period that warrants your attention. In 1785, the US government defaulted on interest payments to the French government followed by a default on principal in 1787. By a series of machinations after the Constitution was ratified, this was eventually repaid.
Interesting, particularly in light of the essay I published this week, "American Schism," which has to do the Hamilton-Jefferson feud over how to interpret America's Treaty of Alliance with France in 1778.
I’m not a lawyer but in my liberal arts college, chose to take constitutional law. This was very helpful and provides great information that I didn’t get in my constitutional law class. In fact it was very poor given what I read here. Thank you.
Sorry to hear that but not surprised. There are overviews of the constitution available without cost on Coursera. https://www.coursera.org/learn/written-constitution
Also, I'm happy to read that you plan on publishing these essays in book form. I've been printing many of them. I look forward to the book.
Thank you for writing this. It sheds light on a significant historical event that is interpreted quite differently by economists who tend to leave out the substance of the ideas that were debated. Economists who lack historical depth, declare this event as the first instance of "insider trading" involving representatives of the people, and diminish its moral-legal significance.
As the founders rejected equitable adjustments of debts as only superficially just, and likely to lead to instability in contractual relationships, they would no doubt be interested in learning how such arguments have regained favor at present.
Once again in these series of essays you have shown where something I hadn't considered the origin of came from. It seems 'self s evident' that a contract should be upheld solely on it's terms and that anything else would be unjust. But this shows that such an idea has to come from a moral code that had not previously been the primary support for a government. It is only self-evident because Alexander Hamilton made it so. How do you think such a question would be handled by most modern legidlatures, however?
It's interesting how most corporations have corrupted moral contracts and morphed into us pages upon pages of predatory "terms and conditions" statements.
https://apnews.com/article/disney-allergy-death-lawsuit-nyu-doctor-florida-4bdaf74e2c889882b23b319ec720680a
Today, no one would question the justice of paying market price for sovereign debt. This article provides a background on this practice that was new to me. As the problems of unpayable debt come to the fore, it will be interesting to see if our government continues to borrow at market rates. My bet is they will not
Once again I’ve gotten new insight into the connection between property rights and all other rights. Thanks!
Since this essay is about Hamilton and Madison, I get why Madison is depicted at the top, but the left image looks like Jefferson. Was that intended, or am I wrong about the image?
Well, Google images tells me I'm wrong and this is Hamilton, so erase my query.
You had me panicked there for a minute, John.
Now I have to get down to reading the essay closely....