From a decent answer and comment here of 1muflon1, I am motivated to know more about Rawlsian ethics, Utilitarianism, or (classical) liberalism ethics in policy economics. However, so far, I still not yet separate them clearly. I mean, I cannot link them together in policy economics theme in one example.

What I have done so far is: I found the relation between Utilitarianism with policy economics as here:

When directed toward making social, economic, or political decisions, a utilitarian philosophy would aim for the betterment of society as a whole. Utilitarianism would say that an action is right if it results in the happiness of the greatest number of people in a society or a group.

Definition of liberalism in policy economics

Liberalism is a political and moral philosophy based on liberty, consent of the governed and equality before the law. ... Liberals also ended mercantilist policies, royal monopolies and other barriers to trade, instead promoting free trade and marketization.

In comparing the Rawlsian and utilitarisnism, here:

The Rawlsian approach to social welfare, built on the foundation of the “veil of ignorance” (Rawls, 1999, p. 118), measures the welfare of a society by the wellbeing of the worst-off individual (the maximin criterion). A utilitarian measures the welfare of a society by the sum of the individuals' utilities


1 Answer 1


Yes a well known example from policy economics is setting of optimal marginal tax schedules.

Below you can see differences between Rawlsian and Utilitarian optimal tax schedules taken from Saez (2001).

As you can see utilitarian and Rawlsian moral philosophy yields completely different optimal marginal taxes (even though the shape is somehow similar).

I do not have picture for charitable conservative (i.e. classical liberal - in the past US conservative party used to be classical liberal in economics department) but it yields yet another set of optimal marginal tax rates (see Diamond 1998) - although if you are willing to take my word for it I remember from simulations I did couple of years ago during one internship that this criterion yields very similar marginal tax rates to Rawlsian just shifted down (I might upload picture later if I will find my old code).

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