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  Fred Speaking

Speaker Let me go on, because Gauthier's views are complicated and I think much more subtle than a lot of people's. I don't know how to classify him. Here's a short outline of his views:

  • There are conditions under which morality would have no place, no application at all. Those conditions are met by a perfectly competitive market. That might sound as though Gauthier is going to come out as a libertarian, but he doesn't. He stresses that in the world as it is those conditions are not met, nor are they even approximated. Instead, transactions in the real world are loaded with what economists call "externalities." These are ways in which some people receive goods and services for which they pay nothing while others are able to pass along costs to people who have no choice but to pay them.
  • As a way of dealing with externalities, people agree to cooperate. Cooperation offers people a whole new range of benefits that they cannot receive without it.
  • People "bargain" in an initial position in order to agree on the terms of cooperation. The principle they agree upon is what Gauthier calls the principle of "minimax relative concession." This principle tells us, roughly, that if several people are bargaining, it is rational for them to reach agreement on a compromise that minimizes the "relative magnitude" of the largest concession that any of them has to make. The relative magnitude is the ratio of the concession they make (in bargaining) to the largest concession they could make (if they received nothing more than what they would get in the initial bargaining position).
  • The people who bargain in the initial position all have certain initial endowments. In order for it be rational to comply with an agreement reached by bargaining in the initial position, the parties who bargain must have acquired their initial endowments without violating what Gauthier calls "the proviso." The proviso basically states that no one has acquired his or her initial endowments by making others worse off.
  • Gauthier believes that the bargain would result in people accepting certain constraints on what he calls "straight-forwardly" maximizing their self-interest. These constraints are impartial rules; and because they are impartial, they are properly referred to as moral rules.


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