In A Theory of Justice, Rawls argues for a principled reconciliation of liberty and equality. Central to this effort is an account of the circumstances of justice (inspired by David Hume), and a fair choice situation (closer in spirit to Immanuel Kant) for parties facing such circumstances. Principles of justice are sought to guide the conduct of the parties. These parties face moderate scarcity, and they are neither naturally altruistic nor purely egoistic: they have ends which they seek to advance, but desire to advance them through cooperation with others on mutually acceptable terms. Rawls offers a model of a fair choice situation (the original position with its veil of ignorance) within which parties would hypothetically choose mutually acceptable principles of justice. Under such constraints, Rawls believes that parties would find his favored principles of justice to be especially attractive, winning out over varied alternatives, including utilitarian and libertarian accounts.

Like Hobbes, Locke, Rousseau and Kant, Rawls belongs to the social contract tradition. However, Rawls' social contract takes a slightly different view from that of previous thinkers. Specifically, Rawls develops what he claims are principles of justice through the use of an entirely and deliberately artificial device he calls the Original position in which everyone decides principles of justice from behind a veil of ignorance. This "veil" is one that essentially blinds people to all facts about themselves that might cloud what notion of justice is developed.

According to Rawls, ignorance of these details about oneself will lead to principles that are fair to all. If an individual does not know how he will end up in his own conceived society, he is likely not going to privilege any one class of people, but rather develop a scheme of justice that treats all fairly. In particular, Rawls claims that those in the Original Position would all adopt a maximin strategy which would maximise the prospects of the least well-off.

It is important to keep in mind that the agreement that stems from the original position is both hypothetical and ahistorical. It is hypothetical in the sense that the principles to be derived are what the parties would, under certain legitimating conditions, agree to, not what they have agreed to. In other words, Rawls seeks to persuade us through argument that the principles of justice that he derives are in fact what we would agree upon if we were in the hypothetical situation of the original position and that those principles have moral weight as a result of that. It is ahistorical in the sense that it is not supposed that the agreement has ever, or indeed could actually be entered into as a matter of fact.

Rawls claims that the parties in the original position would adopt two such principles, which would then govern the assignment of rights and duties and regulate the distribution of social and economic advantages across society.The difference principle permits inequalities in the distribution of goods only if those inequalities benefit the worst-off members of society. Rawls believes that this principle would be a rational choice for the representatives in the original position for the following reason: Each member of society has an equal claim on their society’s goods. Natural attributes should not affect this claim, so the basic right of any individual, before further considerations are taken into account, must be to an equal share in material wealth. What, then, could justify unequal distribution? Rawls argues that inequality is acceptable only if it is to the advantage of those who are worst-off.

The basic liberties of citizens are, roughly speaking, political liberty (i.e., to vote and run for office), freedom of speech and assembly, liberty of conscience, freedom of personal property; and freedom from arbitrary arrest. However, he says:

liberties not on the list, for example, the right to own certain kinds of property (e.g. means of production) and freedom of contract as understood by the doctrine of laissez-faire are not basic; and so they are not protected by the priority of the first principle.

The first principle is more or less absolute, and may not be violated, even for the sake of the second principle, above an unspecified but low level of economic development (i.e. the first principle is, under most conditions, lexically prior to the second principle). However, because various basic liberties may conflict, it may be necessary to trade them off against each other for the sake of obtaining the largest possible system of rights. There is thus some uncertainty as to exactly what is mandated by the principle, and it is possible that a plurality of sets of liberties satisfy its requirements.

Rawls' claim in a) is that departures from equality of a list of what he calls primary goods – 'things which a rational man wants whatever else he wants' [Rawls, 1971, pg. 92] – are justified only to the extent that they improve the lot of those who are worst-off under that distribution in comparison with the previous, equal, distribution. His position is at least in some sense egalitarian, with a proviso that equality is not to be achieved by worsening the position of the least advantaged. An important consequence here, however, is that inequalities can actually be just on Rawls' view, as long as they are to the benefit of the least well off. His argument for this position rests heavily on the claim that morally arbitrary factors (for example, the family we're born into) shouldn't determine our life chances or opportunities. Rawls is also keying on an intuition that we do not deserve inborn talents, thus we are not entitled to all the benefits we could possibly receive from them, meaning that at least one of the criteria which could provide an alternative to equality in assessing the justice of distributions is eliminated.

The stipulation in b) is lexically prior to that in a). 'Fair equality of opportunity' requires not merely that offices and positions are distributed on the basis of merit, but that all have reasonable opportunity to acquire the skills on the basis of which merit is assessed. It is often thought[by whom?] that this stipulation, and even the first principle of justice, may require greater equality than the difference principle, because large social and economic inequalities, even when they are to the advantage of the worst-off, will tend to seriously undermine the value of the political liberties and any measures towards fair equality of opportunity.