Kara Yacovone
12/6/12
One of the biggest ethical issues relevant throughout history, as well as today, has been
distributive justice. There are several different theories for how resources are fairly distributed
and to whom. Two of these major theorists, John Rawls and Robert Nozick, have very
conflicting views on the best way to approach distributive justice with Rawls favoring analyzing
how resources are currently distributed in society and Nozick looking at the history of actions to
determine if a resource has been allocated justly. Though Rawls and Nozick have different ideas
about distributive justice, they often agree when a resource is unethically distributed, but they
believe in different reasons as to why something is unjustly distributed. This proves to be true
when applying both theories to the Enron scandal when Ken Lay illegally acquired more than
$400 million. While both theories have seemingly reasonable views for finding this situation
unjust, Nozick’s argument of examining how Lay acquired his money is a much better analysis
for finding Lay’s role in the Enron scandal to be unethical.
One of the biggest differences between Rawls’s and Nozick’s views of distributive justice
lies in how to analyze if resources are justly allocated or not. While not the originator of the
term, John Rawls bases his views for distributive justice on the time slice principle. Through this
idea, he looks at how things are presently distributed in society, seeking to make everyone
relatively equal in benefit. While this principle seeks to benefit all members of society, it is
important to note that it is not considered a utilitarian approach as he does not believe people
should benefit from others’ losses. By looking at how resources are distributed presently, it can
be decided if it is just, based on if it is as equally benefiting most people. Rawls’s time slice
approach ignores the basis of Nozick’s approach. With Nozick’s historical approach, he bases
distribution justice off of past events of how resources were gained. More specifically, he
determines principles for more closely examining the different types of acquiring resources
including transfer and acquisition. Through the historical approach, each action that results in a
gain of resource can be examined to determine if a person used just actions to acquire it. Both of
these views provide very different ways of comparing resource distribution and whether it is just
or not.
Upon analyzing the Enron scandal, it becomes very clear that Ken Lay’s massive amount
of wealth was unethical. If one were to apply John Rawls’s theory of just economic distribution,
one would ignore how Lay acquired his wealth but would instead focus on how his wealth
compares to everyone else’s. According to Rawls, the best way to determine just economic
distribution is to ignore one’s own current situation. Under this “veil of ignorance” one would
have no knowledge of his or her own financial situation which might sway a person’s view of
what economic distribution is fair or not. Instead, one would view Lay’s $400 million in
comparison to the majority of society’s significantly lower net worth without taking personal
factors into account. When making this comparison between Lay and the rest of society it
becomes very clear that Lay’s excessive wealth was unjust. While Rawls allows for inequalities
within resource distribution in society, this should only be so if the inequality works to the
advantage of those worst off in society, therefore making everyone more equal. In Ken Lay’s
case, it is clear his $400 million wealth was not significantly beneficial to anyone in society
except for his fellow coworkers, as no one else in society was making large sums of money from
Enron. As of 1999, Lay seemed to be increasingly gaining economic resources without
benefiting the worst off members of society, especially since the worst members of society
would not have had the ability to have a share in Enron. The economic resource distribution in
Enron was certainly unjust as Ken Lay proved to have excessive amounts of wealth, creating
greater inequalities in society without benefiting those who need aid.
Ken Lay’s rapid economic gain is also proven unethical when looking at how he was able
to gain so much money. When further looking into Nozick’s more specific principles, it is
evident that Ken Lay had not used just actions when acquiring his wealth. In order to determine
the fairness of Lay’s wealth at this point in time, his past actions leading to his current wealth
have been significantly analyzed. If one were to look at the principle of justice in acquisition,
Ken Lay did not oblige. Ken Lay’s acquisition of wealth had come from knowingly lying about
the worth of Enron. By allowing others to believe it is worth vastly more money than it actually
is, Lay had acquired money under false pretenses. If Lay were to disclose the true worth of the
company he would not have the amount of money that he did and because of this, his acquisition
of wealth was unjust. Additionally, Lay violated the principle of justice in transfer, in which he
had allowed himself to gain money for a misleading value of stock. His trade of the stock was
unjust as shareholders were misled to pay money for an incorrect value of the stock. Because
Lay had used unjust principles in the past, his wealth is unjust now. Through Nozick’s theory, it
is clear that Lay was unethical because he participated in unjust actions in order to unjustly gain
massive sums of money.
While both Rawls’s and Nozick’s approaches provide critical ways of interpreting Ken
Lay’s unjust wealth, Nozick’s theory seems to be more succinct in highlighting the ethics of the
situation. By following the historical approach, one is able to look at the actions Lay did in order
to gain his net worth. One can explicitly see how Lay knowingly engaged in unjust and unethical
behavior through lying and misleading innocent people in order to gain for himself. Additionally,
Nozick’s theory highlights his injustice by allowing people to have unequal wealth if it is
honestly and justly earned; but because Lay gained his money unjustly, while creating such a
distributive inequality that negatively affected so many people, his extreme gain of money is not
acceptable by society and caused him to be severely punished. Lay’s activities are clearly
unethical as he earned tons of money while knowingly allowing other people to lose great sums.
In analyzing ethics, it seems that past events are necessary for making ethical judgments on a
person’s economic gains, which closely follows Nozick’s theory. Ken Lay was held accountable
for being an unethical leader by lying and stealing for personal gain and in order to punish him
for his past unethical behaviors of creating unjust inequalities of wealth in society, Nozick’s
historical approach must be applied. Nozick’s theory is best for analyzing and understanding the
intentions and lack of ethics involved in Ken Lay’s unjust economic gain.
John Rawls and Robert Nozick both seek to identify the ethics involved in distribution of
resources. While both theories may come to the same conclusion regarding ethics, the
approaches taken are quite different with Rawls focusing on present day society and Nozick
examining past events leading to distribution of wealth. Additionally, Rawls’s ideas of just
distribution are based in comparison to society whereas Nozick focuses more on individual
actions. In the case of Ken Lay with regards to the Enron scandal, it becomes clear that Nozick’s
approach of examining past actions and knowledge better emphasize Lay’s lack of ethics.
Distributive justice is an important ethical topic in deciding who ethically deserves what and
different theories provide different perspectives of what area is most important to examine.