Why not market socialism

Rawls believes that the allocative role of markets can be separated from their distributive role. I test this idea by considering Joseph Carens’ egalitarian system, a Rawls-aligned ideal alternative to capitalism, and seeing how it fares as a substitute for the market process. The egalitarian system uses moral, rather than material, incentives to engage in economic cooperation. All the institutions of a market economy exist, including capital investment, but income is taxed at one hundred percent and redistributed. I show that even assuming the effectiveness of moral incentives, the egalitarian system cannot replace a market economy with paid compensation. Full redistribution prevents economic actors from allocating resources according to opportunity costs between investment and consumption, a critical step in the development of productive capital. Investors do not have to be rich but do need to be willing put their future consumption at risk.