THE DISTRIBUTION OF WEALTH IN THE LIBERAL SOCIAL-CONTRACT

I want to consider several systems of private property, where individu al agents can redistribute private wealth, individually or collectivel y, according to moral sentiments. The 'Distributive Lindahl Equilibriu m' is considered first and it is proven unstable and ethically questio nable. Then, a definition of the 'Distributive Liberal Social Contract ' is proposed which appears ethically and practically acceptable. The logical consistency of the liberal social contract is established in a theorem which proves the existence of such a contract for all initial distributions of wealth, when individual agents share the common opin ions that wealth should be consumed by individuals rather than dispose d of, and that gifts should flow down the scale of wealth. The distrib utive liberal social contracts are then the Pareto efficient distribut ions that are unanimously preferred to the initial distribution of rig hts. (C) 1998 Elsevier Science B.V. All rights reserved.