So I want to strengthen my claim. Not only would the Hayekian system not last without Rawls. But from a purely theoretical standpoint, Hayek’s system is a non-starter without Rawls.

I interpret Hayek’s advocacy for non-monopolized currency as brushing up against a polycentric legal system. Rawls would have none of that since such a system would discard the veil of ignorance — decisions would inherently be made without full regard for those outside one’s own legal/currency system (even though the externalities created by those decisions would inevitably impact the outsiders).

But Hayek’s ideal is only sustainable through a veil of ignorance, because only through a veil of ignorance can one grasp all the externalities. Without it, the Hayekian is temped to distinguish between relevant externalities and irrelevant externalities. The “irrelevant” externalities are relevant to some group that will inevitably disrupt the Hayekian system.

That’s not to say that monopolized currency/law is necessary for the Hayekian, only that to be a consistent Hayekian is to insert the veil of ignorance in economic decision making. I think that would please Rawls and, whether or not it pleased Hayek, it would be the only consistent and sustainable application of Hayek’s ideas.

Or are you going to defend social security as a near perfect retirement program?

I think, for example, libertarians and liberals could agree on the destructiveness of the mortgage tax deduction. But politically …

To respond to Michael like you did is, IMO, to say “liberalism is dead”.

The first the tendency for organizations that support causes that liberals typically support to take the standard left-wing position on issues that have nothing to do with their core mission. Every feminist blog I’ve ever read makes it clear that opposing traditional gender norms is not enough feminism also requires supporting left-wing economic policies. this seems to happen one just about every issue for example gay right groups are opposing Arizona’s immigration law(see: http://www.hrc.org/news/14563.htm) in this case a agree with them on the merits but it has nothing to do with their core mission and just as often they take positions that a disagree with, it seems like every anti-war rally was full of anti-capitalist rhetoric(from the organizers some participants will always talk about unrelated issues), the ACLU went to court to prevent Cleveland from starting a school voucher program(if they opposed the use of Pell grants at religious institutions I wouldn’t have a problem with this but they didn’t). By contrast groups advocating free-market policies usually go to great lengths to avoid taking positions on social issues; this makes it much easier for libertarians to work with people who they disagree with on those issues.
The second issue is I don’t think most liberals will consistently support civil liberties. If it’s a republican president violating civil liberties in response to Islamic terrorism Liberals will oppose it but if it’s Democratic president violating civil liberties in response to “right wing violence” I don’t think they’d say much(some would just as some conservatives like Bob Barr opposed Bush’s actions). How many Democrats opposed the Patriot act when it was initially proposed by the Clinton administration after Oklahoma City? The reaction of liberal bloggers to right violence over the past year and a half has caused my concerns to grow much deeper. When the DHS report on right wing violence first came out I thought that the reaction of conservatives was way over the top, at the same time I felt the left was way too dismissive of legitimate concerns since there is long history of the federal government using a small number of violent extremists as a pretext to harass legitimate groups with similar views, the reaction if most on the left was “we trust Obama not to do that”(to his credit he hasn’t but I don’t believe anyone should be trusted like that). Since then many on the left have been egger to use a small number of indefensible violent acts to condemn a much larger swath of people. I dislike both Limbaugh and O’Riely but to claim the either of them is in any way responsible for a violent act committed by one of their listeners is absurd. This type of hysteria has been going on for the past year and it driving me nuts(look at the way Balloon Juice ripped Jesse Walker for suggesting to people on the left were blowing violent acts out of proportion http://www.balloon-juice.com/2010/03/25/law-enforcement-is-in-on-the-smear/ http://www.balloon-juice.com/2010/03/24/thick-as-a-brick) look at the way Bill Clinton used guilt by association to group nonviolent people with timothy McVeigh. If the Obama administration proposed draconian measures to clamp down on right wing violence how many on the left would object? Several left-wing blogs called for the Obama administration to violate the civil liberties of the Hutaree militia. I’ve seen this type of inconsistency from the left on other occasions as well. For example many on the left are justifiably upset about overly harsh penalties for environmentalist who engage in non-violent civil disobedience but then turn and support harsh penalties for people who non-violently block abortion clinics it’s clear that they only support civil liberties when they agree with the persons message.