While reading Randall Holcombe and Russ Sobel's excellent paper “Consumption Externalities and Economic Welfare” (thanks to Michael Dennis, and about which more later), I ran across a cite to Rawls on interdependent preferences. It turns out that I've read this very important passage a bunch of times, but not since becoming obsessed with positional races, interdependent preferences, and suchlike. Here is what Rawls said:
[According to utilitarianism], [w]e arrange institutions so as to obtain the greatest sum of satisfactions; we ask no questions about their source or quality but only how their satisfaction would affect the total of well-being. Social welfare depends directly and solely upon the levels of satisfaction or dissatisfaction of individuals. Thus if men take a certain pleasure in discriminating against one another, in subjecting others to a lesser liberty as a means of enhancing their self-respect, then the satisfaction of these desires must be weighed in deliberations according to their intensity, or whatever, alnong with other desires. If society decides to deny them fulfillment, or to supress them, it is because they tend to be socially destructive and a greater welfare can be achieved in other ways.
In justice as fairness, on the other hand, persons accept in advance a principle of equal liberty and they do this without a knowledge of their more particular ends. They implicitly agree, therefore, to conform their conceptions of the good to what the principles of justice require, or at least not to press claims that directly violate them. An individual who finds that he enjoys seeing others in positions of lesser liberty understands that he has no claim whatever to this enjoyment. The pleasure he takes in others' deprivations is wrong in itself: it is a satisfaction which requires the violation of a principles to which he would agree in the original position. The principles of right, and so of justice, put limits on which satisfactions have value; they impose restrictions on what are reasonable conceptions of one's good. In drawing up plans and in deciding on aspirations men are to take these constraints into account. Hence in justice as fairness one does not take men's propensities and inclinations as given, whatever they are, and then seek the best way to fulfill them . . . The priority of justice is accounted for, in part, by holding that the interests reqiring the violation of justice have no value. Having no merit in the first place, they cannot override its claims. [ToJ, 2nd ed., p. 28.]
Although I didn't have this passage explicitly in mind, if you subscribe to Reason, you can see how deep in my system Rawls's sensibility is in my review of Layard's Happiness. There I said:
Layard's account of economic success as “pollution” is a striking illustration of what philosopher John Rawls had in mind when he argued that utilitarianism fails to take seriously the separateness of persons. If it is legitimate to use the coercive arm of the state to discourage work simply because it makes other people feel bad, then our liberty to pursue our own ends, for our own reasons, is hostage to the way the brains of strangers happen to light up. The aims and beliefs that make us distinct persons are reduced to nothing, except as they count in the summing.
And my implied point is: if the happiness center of your envious brain happens to light up when I do less well, or the unhappiness center of your bigoted brain lights up when a minority family moves in next door, then, when deliberating about policy, we ought graciously to ignore your brain and its preferences in these matters.
There simply is no way to do policy analysis without making some normative ruling about permissible and impermissible preferences at the outset. The virtue of Rawls is that he tries to draw the distinction in a principled way, and at a high level of generality, without leaning too heavily on any one comprehensive conception of the good.