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“I cut the cake, you pick your half” is basically the only good political idea anyone has ever had. Everything else is either derived from that, or self-serving behavior dressed up to look like an idea.
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It's a beautiful idea, but not really political (politics is about groups over time; this is a mechanism for a 2-person 1-shot transaction). If you scale it up to politics level, it becomes Rawls veil of ignorance I think.
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Yeah an ideal liberal democracy works that way; you may have noticed that the present reality is somewhat divergent from the ideal.
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