A striking aspect of the initial reception of John Rawls is that he was embraced by leading market liberal theorists such as Friedrich Hayek and James Buchanan. This article investigates the reasons for the free market right’s sympathetic interest in the early Rawls by providing a historical account of the dialogue between Rawls and his key neo-liberal interlocutor, James Buchanan. We set out the common intellectual context, notably the influence of Frank Knight, that framed the initial work of both Buchanan and Rawls and brought them together as seeming allies during the early 1960s. We then analyze a significant theoretical divergence between the two in the 1970s related to their contrasting responses to the politics of those years and to differences over the importance of ideal theory in political thought. The exchanges between Buchanan and Rawls demonstrate that Rawlsian liberalism and neo-liberalism initially emerged as entwined critiques of mid-twentieth century political economy but could not sustain that alliance when faced by the new claims for civil and social rights that became a marked feature of politics after the 1960s.
