The always-thoughtful John E. Roemer gave a talk on “The Ideological and Political Roots of American Inequality” at a conference last February. The talk is available as a working paper here; a revised version of the talk appears as an article with the same name in the September-October issue of Challenge magazine, which is available on-line if your library has a subscription. I quote here from the working paper version.

A First Argument for Inequality: Individuals Deserve to Benefit from Their Endowments

The first argument that Roemer considers for inequality is “an ethical one, that individuals deserve to benefit from what nature and nurture endows them with … The first argument is presented in its most compelling form by thephilosopher Robert Nozick, who in his 1974 book, Anarchy, State and Utopia, advanced the idea that a person has a right to own himself and his powers, and to benefit by virtue of any good luck that may befall him, such as the luck of being born into a rich family, or in a rich nation. … Nozick is the first the admit that actual capitalist economies are not characterized by historical sequences of legitimate, voluntary exchanges: there is much coercion, corruption, and theft in the history of all societies. But Nozick’s point is that one can imagine a capitalism with a clean history, in which vastly unequal endowments of wealth are built up entirely from exchanges between highly talented, well educated people and simple, unskilled ones, and this unequal result is ethically acceptable if one accepts the premise that one has a right to benefit by virtue of one’s endowments – biological, familial, and social – or so he claims.”

Responses from Rawls and Dworkin to this first argument

“The philosophical response to Robert Nozick’s libertarianism came primarily from two political philosophers, John Rawls and Ronald Dworkin. … Rawls attempted to construct an argument that, if rational, self-interested beings were shielded from the knowledge of the luck they would sustain in the birth lottery, which assigns genes and families, they would opt for a highly equal distribution of wealth – indeed, for that distribution which maximizes the wealth that the poorest class of people would have. . … The error in Rawls’s argument that those in an original position, behind a veil of ignorance, would choose a highly equal distribution of income, came from his assumption that the decision makers postulated to occupy this position were completely self-interested. Self-interested individuals may be willing to take some risk in the birth lottery – they may be willing to accept some possibility of an unlucky draw in return for the possibility of a lucky draw. … This does not mean that a strongly equalizing tax system is ethically wrong: but to justify it with the kind of argument Rawls wished to
construct requires that individuals care at least to some degree about others. Rawls’s attempt to derive equality of results from premises of rationality and self-interest fails. … There was another aspect of Rawls’s theory that was unattractive to some: there was no evident place in it for the role of personal responsibility and accountable choice. … Ronald Dworkin, in 1981, published a pair of articles which addressed this problem in a radical, new way. He advocated what he dubbed ‘resource equality’ … In Dworkin’s view, people should be held responsible for their preferences, but not for their resources – where resources include many of the goods that Rawls called morally arbitrary, such as genetic endowments and the social and familial circumstances of one’s childhood. … Thus, a degree of equality was recommended that was less than Rawlsian, but far more than exists in most advanced democracies today.”