narrow band whose limits have been determined by a quarter millennium of economic history. Saturday, June 23, 2012 How much inequality?, UnderstandingSociety : How much inequality is too much? Answers range from Gracchus Babeuf (all inequalities are unjust) to Ayn Rand (there is no moral limit on the extent of inequalities a society can embody). Is there any reasoned basis for answering the question? What kinds of criteria might we use to try to answer this kind of question? John Rawls offered a fairly simple criterion of the extent of inequalities that a just society can tolerate in A Theory of Justice . His background assumption is that the wealth of a society is a joint product of all members of society. The rules of distribution create more or less inequality among citizens. Citizens are concerned to "protect" their interests in case they wind up being in the worst-off positions in society. So justice requires that institutions should create the least degree of inequalities subject to maximizing the position of the least-well-off position in society. (He also stipulated an equality of opportunity principle: positions need to be open to all through a fair system of competition.) If the empirical theory is true that economic inequalities sometimes create more wealth (through incentive effects), then it is just to increase inequalities up to the point where any further increase would leave the position of the least-well-off member of society unchanged. This is the least system of inequalities subject to maximizing the position