A Critique of Japan’s Wealth Distribution Through John Rawls’s “Difference Principle”

John Rawls is the man who provided the means for American liberalism to rise above the renewed skepticism of the 1970′s. He amalgamated the theories of libertarianism and egalitarianism and advanced his “difference principle” which basically stated that “only those social and economic inequalities are permitted that work to the benefit of the least advantaged members of society.” (“Justice” by Michael J. Sandel, pp.151-152). This is a value-system with a slight tingue of egalitarianism that allows those with the ability to rise to the top to do so with minimal government slow-down, but at the same time, once they rise to the top, they must be willing to distribute the fruits of their success to society.

This notion would undoubtedly receive strong criticism from the neo-liberal camp (M. Friedman, A. Rand, and R. Nozick come to mind). Rawls identifies two forms of inequality to justify his “difference principle”

1) The randomness of birth–one cannot pick what family he’s born into, and the environment in which he is grown has a huge impact upon his future success/failure.

2) The randomness of the social paradigm–computer programmers and “quants” (risk analysts for Wall Street) are sought today, but 100 years ago there were no employers seeking either of them. The social paradigm in which we are born into seeks very certain traits, and those who have them do so only randomly.

Take, for example, Japanese pop-superstar Utada Hikaru. She’s reputedly “groaned” about having to pay “exorbitant” sums of money in the form of taxes for her CD sales. But is her success in the J-Pop industry merely the product of her hard work?

Admittedly, Utada Hikaru worked hard to get the octaves and stage charisma that define the success of her career. At the same time, her immaculate English pronunciation is due in no small part to her family’s stay in New York, and her success in the J-pop industry cannot be more telling of the “randomness of the social paradigm.”

That doesn’t necessarily mean we ought to slow her down. As a matter of fact, slowing her down by stripping her of the aspects that allow her to achieve stardom (and generate astronomical revenues) would be detrimental towards Japan’s GDP growth. Besides, the blind pursuit of a homogenous egalitarian society seems laughable at best (see “Harrison Bergeron” by Kurt Vonnegut, Jr.)

With all of that said, Japan has imported a somewhat warped version of America’s meritocratic belief-system. This appears most greatly in how both the LDP and DPJ shape their policies to address only “1) The randomness of birth” and not “2) The randomness of the social paradigm.” So much has been done to try and give Japanese citizens equal opportunity, but when, indeed, some lucky select few do achieve success, most of their money is lost in the vortex of secret Swiss / Cayman Island bank accounts. Let me qualify my previous sentence–perhaps the number of secret Swiss Bank acounts is decreasing, as the Swedish government has publicly announced a crackdown on the use of Swedish bank accounts as tax havens following the Lehman Brothers crisis.

This kind of society does not live up to the ideals of the “difference principle.” Successful Japanese should not funnel their wealth to places out-of-reach from society. As a matter of fact, they should follow in the footsteps of Bill Gates, Warren Buffet, and even the tycoons of the Gilded Age and learn about donations and charity.

Whatever happened to giving back to society? Looks like that was one American virtue that’s yet to be imported to Japan. Only when successful Japanese nationals become more cultured and realize their success has been aided by Japan’s social infrastructure and social fabric will they begin to see the point in distributing wealth. Let’s hope that occurs very soon, given how absolutely and atrociously weak Japan’s social safety net is.

Luckily, there seems to have been some progress. Some entrepreneurs in Japan have started donation magazines, in which people can donate to the NPO/NGO of their choice. In return for their donation, they receive notifications of how their money is spent. I suppose information symmetry and communication between the donating party and the receiving party is cardinal towards establishing the groundworks for reform.


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