Contractarianism is a moral theory that claims that morality is based on an unspoken social contract between all members of society as members of society. The idea as put forth influentially by Thomas Hobbes is that there is no “natural law” or inherent basis for morality in human dignity or the value of life or property or anything like that. Instead, “morality” is just a word for the rules that we all implicitly agree to in order to live together and have good lives. Murder and theft and all manner of immoral things aren’t inherently right or wrong. It’s just that if we don’t all agree to and hold one another to some basic ground rules for living together,
there is no place for Industry; because the fruit thereof is uncertain; and consequently no Culture of the Earth; no Navigation, nor use of the commodities that may be imported by Sea; no commodious Building; no Instruments of moving, and removing such things as require much force; no Knowledge of the face of the Earth; no account of Time; no Arts; no Letters; no Society; and which is worst of all, continuall feare, and danger of violent death; And the life of man, solitary, poore, nasty, brutish, and short.
This “social contract” view of morality was revisited and refined in the 20th Century by John Rawls, in his theory of “justice as fairness.” Rawls uses a thought experiment to provide a mechanism for thinking in more detail about what kind of “social contract” is best—what kind of social structures, institutions, and other “rules of the game” for society are just, fair, and best. He asks us to imagine we could leave society and our lives, putting on a “veil of ignorance” that would make us unaware of what position we had in society—unaware of whether we’re rich or poor, young or old, male or female, gay or straight, trans or cisgender, disabled or abled, in a racial minority or majority, a member of a dominant or minority faith, and so on. From this “original position,” without knowing who we are, what kind of distribution of rights, wealth, power, and opportunity would we want? What social contract would we write for ourselves?
Rawls thinks we can come up with some pretty substantial answers. Since our life is on the line, we’d play it safe and pursue a “maximin” strategy—we’d want to maximize the minimum we’d get. So, first of all, we’d want to give absolutely everyone all the rights and abilities that can be given simultaneously to everyone: freedom of thought and religious practice, self-determination, social mobility, ability to vote and participate in governance, and so on. When you’re betting with your life, you don’t want to create a society with big harms for some, like a slave society, or one that enforces religious beliefs that you might think are wrong, or one that won’t recognize your gender or sexuality.
Not everything can be given simultaneously to everyone, though. If everyone had equal political power, nothing would get done, and if everyone’s income were equal no matter how hard they worked or what they did, there would be less progress and wealth than if there were some inequality. Again, from the original position behind the veil of ignorance, we’d want to play it safe—we’d want as much inequality as continued to benefit the least among us, and no more than that.
The point of the veil of ignorance is to look at the overall distribution of benefits and harms to see whether you think it’s a fair deal and a good bet, if you assume that you could be anybody in that society, either the best of or the worst off. So, at first, inequality seems like a bad bet, because you could be the worst off in that society! But some inequality actually ends up being good, because some inequality helps even the worst off—but you’d want only as much inequality as is still beneficial for the worst off.
This thought experiment is really powerful and compelling. Behind the veil of ignorance, you’re choosing social structures purely based on your own self-interest, so there’s no question of why the optimal social structure is fair or unfair to you, no matter where you end up since it’s what you would choose if you didn’t know who you happened to be. A social contract that fits these criteria can’t be objected to by anyone in society, since, even though it’ll have inequality, it’ll be the best possible arrangement even for those who are most disadvantaged—and, conversely, the only reason to be opposed to it is if you happen to be lucky enough to be advantaged by a less fair distribution of wealth, power, and opportunity, and that’s obviously an unfair and self-serving objection that says you should get more at the expense of others. No matter where you end up, if it’s within a structure that you would have chosen if you didn’t know who you were, you might be lucky or unlucky but you have to agree that it’s fair.