English-speaking political theorists identify John Rawls as among the most important political philosophers of the 20th century. Rawls developed a rational theory of justice in liberal democracy using a thought experiment inspired by social contract theory. He imagines organizing a state where none of the organizers know their position in the society they create. Assuming the organizers are rationally self-interested, Rawls claims that they would establish two principles of justice. The Equality Principle states that rights and freedoms should be as extensive as possible while being distributed to all citizens equally. The Difference Principles states that social and economic inequalities should be evaluated by their benefit to the least advantaged, and competition for prestige positions should be fair and open to all.

From the examples he employs, Rawls imagines that the United States political economy reflects the principles of justice. The Bill of Rights defines an equally distributed system of rights and freedoms, political positions are won in open and fair elections, and capitalism allows anyone to earn economic success on the free market. Rawls argues that the competition inherent in republicanism and capitalism ensures beneficial outcomes regulated by free choice of the citizens.

Like John Stuart Mill, Rawls overestimates the benefits of republican capitalism. Economic inequality is maintained by concentrating wealth, effectively transferring it from the working class to the wealthy. The worst-off individuals are both the most vulnerable and the most exploited. Their liberty is limited by their lack of wealth. Comparing American capitalism to the Nordic model or social market economies of Europe, the poorest benefit from increased regulation on the market and constraints on economic advantage influencing electoral politics.

Rawls published Theory of Justice in 1971. To frame the United States as conforming to the Difference Principle in the shadow of the civil rights movement and the assassination of Martin Luther King, Jr requires overlooking substantial injustices. Charitably, Rawls may have acknowledged the shortcomings in American political economy, but his emphasis on competition shows substantial sympathy with capitalist justifications of the market. The Difference Principle requires one to evaluate inequalities based on how the losers in the competition fare, so Rawlsian argments should be marshalled to support social justice and a welfare state.

Fortunately, Rawls’s positive assessment of capitalism can stand apart from the Difference Principle. The Difference Principle does not assert that there should be inequalities; it merely sets the conditions for inequalities to be just. While Rawls composed his theory of justice for liberal democracy, he succeeds in framing a notion sufficiently general that it applies to political organization generally. Recuperating the work of Rawls and Mill from their commitment to liberal democratic capitalism enables anarchist and socialist arguments to be framed in the language of academic political theory.