Value Theory, Economic Paradigms and Rawls - Exchange Versus Production in the Theory of Justice

Rawls relies heavily on the version of economic theory represented by Koopmans (1957) when constructing his theory of justice. In this paper it is argued that the Koopmans's economics is representativ e of that theoretical tradition in which exchange forms the basis of value. As such, it lacks a notion of cooperation that is sufficiently strong to support Rawls's conception of society as a "cooperative venture for mutual advantage". The individualistic basis of the exchange paradigm is contrasted with that of the production paradigm, in which labouring activity is seen as the source of value. The latter yields a notion of cooperation arising out of the importance of the viability of productive arrangements. It is argued that this stronger concept of cooperation is more suited to Rawls's expressed social vision than that consistent with the focus on allocative feasibility in the exchange paradigm. Hence, as Rawls's social vision is more compatible with that underlying the production paradigm, his reliance on the exchange paradigm is problematic. However, his argument is inextricably linked with the latter, a state of affairs that results in fundamental inconsistencies in his position.