This article examines a novel line of argument in support of welfare-state capitalism proposed by Gerald Gaus. The novelty of Gaus’ argument lies in its contention that welfare-state capitalism can be justified on the basis of the contractualist mode of justification made famous by Rawls. Gaus argues that economic regimes, such as propertyowning democracy, are more coercive than welfare-state capitalism insofar as they require a greater degree of tax-imposed redistribution among citizens. Given the degree of coercion needed by these regimes, he contends that parties to a contract would not agree to them, whereas they would agree to welfare-state capitalism by virtue of the lesser degree of coercion it needs. It is argued in this article that Gaus fails to show that welfare-state capitalism is less coercive than property-owning democracy. Indeed, once one directs one’s attention towards those with the smallest range of valuable opportunities for action, there is reason to worry more about the coercion imposed by welfare-state capitalism than by property-owning democracy
