Just Savings Principle

February 27th, 2011 by Kara in Dictionary, Moral Terms

John Rawls is credited with providing the first thorough discussion of what the current generation owes to future people. He argues that the main duty owed to our successors is the saving of sufficient material capital to maintain just institutions over time. Rawls calls this duty the “just savings principle” (JSP). Although JSP is only a minor aspect of justice as fairness, it has been widely discussed and criticized because of its significance with regard to intergenerational justice.

Rawls begins reasoning toward JSP by acknowledging that what the current generation owes the next generation is dependent on where the social minimum is set.1 He then claims that the social minimum “is to be set at that point which, taking wages into account, maximizes the expectations of the least advantaged group.”2

Essentially, JSP is an addition to the difference principle designed to provide a constraint on its impact on posterity. If the difference principle has no intergenerational component, we may exploit the least advantaged of future generations for the benefit of the least advantaged currently living. In the final statement of the two principles, the difference principle reads as follows: “Social and economic inequalities are to be arranged so that they are to the greatest benefit of the least advantaged, consistent with the just savings principle.”3 However, JSP is not meant to be an extreme burden on the current generation, and “an excessive rate of saving must on balance mitigate the burden of those bearing this hardship.”4

Notably, the forms of savings are diverse but are all to be understood as the accumulation of capital. The critical feature of this capital is that it furthers the maintenance of just institutions. It extends beyond mere monetary value, as Rawls suggests when he mentions “knowledge and culture” and “techniques and skills.”5 However, it does not include certain types of natural capital which are nonessential to the maintenance of a just society.

JSP is our means of determining the proper level of intergenerational savings, but providing a substantive and precise definition of JSP proves extremely difficult, and Rawls stresses that he does not think it is currently possible “to define precise limits on what the rate of savings should be.”6 He does claim, however, that we can specify some limits to avoid certain extreme results. Our guidance for determining these limits comes from our deliberations in the original position. From behind the veil of ignorance, “the parties are to ask themselves how much they would be willing to save at each stage of advance on the assumption that all other generations have saved, or will save, in accordance with the same criterion.”7 JSP is understood as a rule regulating the rate of accumulation as society progresses; when the parties in the original position decide on a rate of savings, they are establishing regulations on the rate of accumulation that everyone is to follow.

Since parties in the original position lack knowledge regarding the state of their society, they will avoid imposing high rates of savings at earlier stages of accumulation: while they will benefit from these rates if they come into existence later, they must also be able to accept the rates if they happen to live in a poor society in which they would suffer if the rate of savings is too severe.8 Simultaneously, some rate of savings must be binding on all generations because it is to everyone’s advantage (except perhaps to the first generation’s) for their predecessors to have saved. Through this deliberation, certain limits on JSP are established.

The precise definition of JSP can be attained through some additional thought experiments in the OP. The parties are to ask what they should set aside for their descendants and what they feel entitled to have received from their predecessors. After a fair estimate is reached from both sides and some adjustments are specified based on the how favorable societal circumstances are, the rate of savings for that particular stage is established.9 Once this process is completed for each stage of accumulation, JSP is fully defined.

At this juncture, we should note several other aspects of JSP before progressing to how the principle was modified in PL. First, we should not infer from the previous discussion that JSP entails continuous savings. JSP can be thought to occur in two stages. The first is the stage of accumulation: each generation saves material capital at a specified rate dependent on their stage of accumulation and the circumstances of their society. The second is the state of maintenance: once the second stage of JSP is reached, saving for future generations becomes supererogatory. All that justice requires is that the material base necessary for sustaining just institutions be preserved from one generation to the next.

The purpose of JSP is not merely to make future generations wealthier, and according to Rawls, we would be mistaken “to believe that a just and good society must wait upon a high material standard of life.”10 In fact, Rawls actually discourages the supererogatory saving of wealth to some extent, remarking that it may become a “meaningless distraction” or even a “temptation to indulgence or emptiness.”11

  1. John Rawls, A Theory of Justice: Revised Edition (Cambridge: The Belknap Press of Harvard University Press, 1999), 251.
  2. Ibid., 252.
  3. Ibid., 266. Emphasis added.
  4. Ibid., 267.
  5. Ibid., 256.
  6. Ibid., 253.
  7. Ibid., 255.
  8. Ibid.
  9. Ibid., 256.
  10. Ibid., 257.
  11. Ibid., 258.

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