<p>Yes a well known example from policy economics is setting of optimal marginal tax schedules.</p>
<p>Below you can see differences between Rawlsian and Utilitarian optimal tax schedules taken from  Saez (2001).</p>
<p>As you can see utilitarian and Rawlsian moral philosophy yields completely different optimal marginal taxes (even though the shape is somehow similar).</p>
<p>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 <a href="https://www.jstor.org/stable/116819?seq=1#metadata_info_tab_contents" rel="nofollow noreferrer">Diamond 1998</a>) - 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).</p>
<p><a href="https://i.sstatic.net/Dgedi.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/Dgedi.png" alt="enter image description here" /></a></p>

CC BY-SA 4.0
2021-08-19T16:22:29.700Z
2021-08-19T16:22:29.700Z
1muflon1
<p>From a decent answer and comment here of <a href="https://economics.stackexchange.com/questions/47276/why-positive-theory-is-important-in-discussions-of-how-antitrust-law-achieve">1muflon1</a>, I am motivated to know more about Rawlsian ethics, Utilitarianism, or (classical) liberalism ethics in policy economics. <strong>However, so far, I still not yet separate them clearly.</strong> <strong>I mean, I cannot link them together in policy economics theme  in one example.</strong></p>
<p>What I have done so far is:
I found the relation between Utilitarianism with policy economics as <a href="https://www.investopedia.com/terms/u/utilitarianism.asp#:%7E:text=When%20directed%20toward%20making%20social,a%20society%20or%20a%20group." rel="nofollow noreferrer">here</a>:</p>
<blockquote>
<p>When directed toward making social, economic, or political decisions,
a utilitarian philosophy would aim for the betterment of society as a
whole. <strong>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</strong>.</p>
</blockquote>
<p>Definition of <a href="https://en.wikipedia.org/wiki/Liberalism" rel="nofollow noreferrer">liberalism</a> in policy economics</p>
<blockquote>
<p>Liberalism is a political and moral philosophy based on liberty,
consent of the governed and equality before the law. ... <strong>Liberals also
ended</strong> mercantilist policies, <strong>royal monopolies and other barriers to
trade, instead promoting free trade and marketization</strong>.</p>
</blockquote>
<p>In comparing the Rawlsian and utilitarisnism, <a href="https://www.sciencedirect.com/science/article/pii/S0165176513005132" rel="nofollow noreferrer">here</a>:</p>
<blockquote>
<p>The Rawlsian approach to social welfare, built on the foundation of
the “<a href="https://www.forbes.com/sites/pascalemmanuelgobry/2015/01/06/hey-kids-lets-take-a-trip-behind-the-veil-of-ignorance/?sh=2814685a51a3" rel="nofollow noreferrer">veil of ignorance</a>” (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</p>
</blockquote>

<theory><soft-question><policy>
Is there any example to see the differences among Rawlsian ethics, Utilitarianism or (classical) liberalism ethics in policy economics?
Phil Nguyen
# Is there any example to see the differences among Rawlsian ethics, Utilitarianism or (classical) liberalism ethics in policy economics?

(Asked by: username_0 on 2021-08-19)

From a decent answer and comment here of [username_1](https://economics.stackexchange.com/questions/47276/why-positive-theory-is-important-in-discussions-of-how-antitrust-law-achieve), 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](https://www.investopedia.com/terms/u/utilitarianism.asp#:%7E:text=When%20directed%20toward%20making%20social,a%20society%20or%20a%20group.):

> 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](https://en.wikipedia.org/wiki/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](https://www.sciencedirect.com/science/article/pii/S0165176513005132):

> The Rawlsian approach to social welfare, built on the foundation of
> the “[veil of ignorance](https://www.forbes.com/sites/pascalemmanuelgobry/2015/01/06/hey-kids-lets-take-a-trip-behind-the-veil-of-ignorance/?sh=2814685a51a3)” (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

**Tags:** theory, soft-question, policy


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## 1 answers

### Answer by username_1 on 2021-08-19. Score: 2 | Accepted answer

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](https://www.jstor.org/stable/116819?seq=1#metadata_info_tab_contents)) - 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).

[![enter image description here](https://i.sstatic.net/Dgedi.png)](https://i.sstatic.net/Dgedi.png)


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