1. Social justice. When Hayek writes about ‘social justice’ he’s talking about the demand “for an assignment of the shares in the material wealth to the different people and groups according to their needs or merits” (p 121). This isn’t what Rawls meant by social justice — a fact that Hayek acknowledged (p 100).

For Hayek, ‘social justice’ was about imposing a patterned distribution on society:

Our objection is against all attempts to impress upon society a deliberately chosen pattern of distribution, whether it be an order of equality or of inequality. We shall indeed see that many of those who demand an extension of equality do not really demand equality but a distribution that conforms more closely to human conceptions of individual merit…. (p 87)

Here’s how explained the motivation for ‘social justice’ and why it was a problem:

Most people will object not to the bare fact of inequality but to the fact that the differences in reward do not correspond to any recognizable differences in the merits of those who receive them. The answer commonly given to this is that a free society on the whole achieves this kind of justice. This, however, is an indefensible contention if by justice is meant proportionality of reward to moral merit (p 93).

The only way to achieve ‘social justice’ would be through a completely planned economy (p 69). Obviously that would destroy the system which creates wealth in the first place. Obviously this would not benefit the society’s least advantaged.

2. Hayek on income support and primary goods. In a 1945 radio interview Hayek said "I am in favor of a minimum income for every person in the country" (p 114). My understanding is that he saw this minimum as at a bare subsistence level. But whatever the level of this guaranteed minimum, it’s clear that Hayek didn’t see transfer payments as conflicting with his system of procedural justice.

Remember Hayek’s rationale for setting up a system of pure procedural justice — “we should regard as the most desirable order of society one which we would choose if we knew that our initial position in it would be decided purely by chance” (p 132). Obviously you’d want an efficient economy. But you’d also want access to various primary goods (goods that enable you to pursue the goals you value). You’d want to be able to get an education, health care etc. Access doesn’t necessarily mean that the government has to provide them.

It seems clear to me that Hayek’s austere level of support for those who are unable to work is inconsistent with his stated rationale. Most people seem happy to embrace his conclusions while ignoring his arguments.

Our objection is against all attempts to impress upon society a deliberately chosen pattern of distribution, whether it be an order of equality or of inequality. We shall indeed see that many of those who demand an extension of equality do not really demand equality but a distribution that conforms more closely to human conceptions of individual merit…. (p 87)

Here’s how explained the motivation for ‘social justice’ and why it was a problem:

Most people will object not to the bare fact of inequality but to the fact that the differences in reward do not correspond to any recognizable differences in the merits of those who receive them. The answer commonly given to this is that a free society on the whole achieves this kind of justice. This, however, is an indefensible contention if by justice is meant proportionality of reward to moral merit (p 93).

The only way to achieve ‘social justice’ would be through a completely planned economy (p 69). Obviously that would destroy the system which creates wealth in the first place. Obviously this would not benefit the society’s least advantaged.
 
2. Hayek on income support and primary goods. In a 1945 radio interview Hayek said "I am in favor of a minimum income for every person in the country" (p 114). My understanding is that he saw this minimum as at a bare subsistence level. But whatever the level of this guaranteed minimum, it’s clear that Hayek didn’t see transfer payments as conflicting with his system of procedural justice.
 
Remember Hayek’s rationale for setting up a system of pure procedural justice — “we should regard as the most desirable order of society one which we would choose if we knew that our initial position in it would be decided purely by chance” (p 132). Obviously you’d want an efficient economy. But you’d also want access to various primary goods (goods that enable you to pursue the goals you value). You’d want to be able to get an education, health care etc. Access doesn’t necessarily mean that the government has to provide them.
 
It seems clear to me that Hayek’s austere level of support for those who are unable to work is inconsistent with his stated rationale. Most people seem happy to embrace his conclusions while ignoring his arguments.

It’s an objection to activities aimed at giving people what they deserve (Hayek calls this ‘social justice’).

Sorry, Don. Can you expand on this point. Either I’m not following what you’ve said, or I think you’ve misinterpreted Hayek.

Hayek only advocates income support for the very poor, your argument only holds if you define the most disadvantaged as income-poor. Many observers are forever ‘redefining’ disadvantage.

If you are going to refer to your fellow nth generation Australians (and Americans for that matter) as convicts, then you should join the barmy army on a 747 or Sheik Hilaly in the galley ^^

Why should any powerful person or group care about transaction costs or social efficiency? Why should they care about what you think your property rights are? Why should they care about anything other than their own values and interests?

Short answer – even thieves would prefer to live in a society where their own possessions are secure. This should be your starting point, not this business about imagining a polity comprised of Harvard philosophers obsessed with fairness.

See also F.A. Hayek, 1978, ‘Economic freedom and representative government’, in New Studies in Philosophy, Politics, Economics and the History of Ideas, Routledge, pg. 111.

we can look at the opportunities for the least advantaged under different systems of institutions and rules

That we can. What puzzles me though is what we can do to implement those ‘different systems’ without violating Hayekian criteria for government intervention. Also as Harold Demsetz has argued we need to avoid the pitfalls of the nirvana approach to policy. In particular, the pitfalls are ‘the fallacy of a free lunch’, ‘the grass is always greener’ and ‘the fallacy that people could be different’.

That’s an odd response from a libertarian.

Why should any powerful person or group care about transaction costs or social efficiency? Why should they care about what you think your property rights are? Why should they care about anything other than their own values and interests?

Libertarians are always making up rules and telling everyone else that they have to follow them. “Oh no, you can’t use force! It’s not allowed!” Not allowed by whom?

Cynics suspect that libertarians choose the rules that best suit their own interests. If you don’t think that’s right then how do you convince them otherwise?

If someone offers you $250 for catallaxy, you should take it Jason and disregard ideas regarding ownership for the sake of a night out. You can then apply for emancipation and a grant of land.

On the other hand, the Hobbesian version of contractarianism makes sense because it’s about what set of rules would be in a sense evolutionarily stable and likely to reduce transaction costs for all parties concerned (as for instance, stabilising property arrangements and enforcing a rule that all further transfers of property have to be subject to some test of consent, and ceding enforcement rights to a Leviathan thus defusing an arms/locks race does).

Today human capital is significantly more important — perhaps the most important factor of production. Therefore, concentrating on physical capital gives a misleading impression of the mix of wealth and relative economic “power” of people.

Is Jason betraying his age by talking about mortgages?

My most important property is human capital – as long as there’s that, you have an income for life. And you can flit around, do a career change on a whim. Property ownership (being a mortgage slave) is so 20th century.

Get back to me Jason when you’re human capital is fully depreciated. I don’t see too many octogenarians making much income. They still eat (occasionally) however.

…pure procedural justice obtains when there is no independent criterion for the right result: instead there is a correct or fair procedure such that the outcome is likewise correct or fair, whatever it is, provided that the procedure has been properly followed (p 86).

Rawls’ lesson is about how we should choose our basic institutions and the rules that govern them. We need a system of institutions and rules that everyone would agree to from behind the veil of ignorance. It’s not hard to see why this is an egalitarian argument. No individual or group has a privileged role in the original position. And, from this perspective, ‘social justice’ isn’t about giving everyone what they deserve — it’s about whether the system of rules passes the test.
 
If you accept that the difference principle follows, then we can move from political theory to economics and social science. Instead of looking at GDP per capita or Gini coefficients we can look at the opportunities for the least advantaged under different systems of institutions and rules.

Secondly, the reality is that, as a large number of citizens are not property owners, and so ther eneeds to be something put in place to enable those outside the property regime to become property owners.

Ok, fair point, and something (eg) Bush was very keen on, and Australia’s super reforms over the last 20 years have addressed.

His utopia