In ‘The Theory of Justice’ (1971), John Rawls, an American philosopher, suggested a path to establish the governing principles of a just society.
To define a ‘social contract,’ he calls on lawmakers about to legislate to imagine a scenario in which ‘no one [of them] knows his place in society, his class position or social status, nor does anyone know his fortune in the distribution of natural assets and abilities, his intelligence, strength, and the like.’ Behind this ’veil of ignorance’ preventing legislators from considering their own position in society ahead of deciding upon its rules, how shall the principles of justice be determined?
Rawls’ thought experiment evidently aims to eliminate self-interest and biases and foster impartiality. Following his approach, lawmakers are incentivized to design a societal system that maximizes the minimum position they would obtain if they found themselves in the least fortunate circumstances. As such, the veil of ignorance reasoning leads to protecting the most economically vulnerable population segments. In a Harvard University paper, the authors demonstrate through experiments that individuals asked to operate under the veil of ignorance do make decisions that maximize collective welfare as opposed to their own interests.
John Rawls’ philosophy was rejected by many, most prominently by Robert Nozick, another American philosopher. In ‘Anarchy, State and Utopia’ (1974), he argued that the veil of ignorance approach requires wealth redistribution, a concept that is incompatible with ownership rights: ‘From the point of view of an entitlement theory, redistribution is a serious matter indeed, involving, as it does, the violation of people's rights. […] It would be illegitimate for a tax system to seize some of a man’s [earnings] for the purpose of serving the needy.’
Both sides of the argument invoke fairness to justify their position, mirroring the endless left-right political debate discussed in ‘Schismogenesis’ (2022).
Regardless of political affiliations, I believe that John Rawls’ thought experiment is relevant to decision-makers, including executive boards and boards of directors, when elaborating policies.
For example, the veil of ignorance approach leads to the following question for leadership teams,: ‘What type of firm would we want to shape if we did not know the position we would be asked to occupy in that same organization?’
The same question can be expanded to investors and other stakeholders: ‘What type of company would we want to shape if we didn’t know the stakeholder position we would be asked to assume?’
By encouraging decision-makers to assess the wider impact of their choices, these questions provoke a debate leading to fairer, robuster outcomes.
Ironically, the veil of ignorance is the way to gain valuable knowledge. Putting aside self-interest can benefit oneself.