Abstract

In this chapter, we turn to cooperation as the remedy for market failure, and to justice as the rational disposition to cooperative behaviour. Instead of each person choosing her own strategy, in cooperation persons agree on a single joint strategy choice leading to an optimal outcome. We argue that such a choice results from an ideal bargain among all persons, and offer an account of bargaining, in terms of the initial bargaining position, the claims rational persons would make from that position, and the concessions they would then offer to achieve agreement on a joint strategy, yielding a fundamental principle labelled ‘minimax relative concession’. We then show that this principle is equivalent to ‘maximin relative benefit’, in which the smallest gain anyone receives, measured as a proportion of the gain he would receive from being granted his claim, is as great as possible. The principle of maximin relative benefit, we claim, captures the idea of impartiality in the distribution of the benefits of cooperation, and so is a principle of fairness or justice. Thus, rational bargaining and justice coincide. But we note that the question of determining the initial bargaining position remains to be resolved, both rationally and morally; this question is in fact the same as that of determining initial factor endowments, which we raised and deferred in the previous chapter.