Rawls intended the difference principle to be a liberal egalitarian principle of justice. By that I mean he intended it to provide a moral justification for a moderate amount of redistribution of income from the most advantaged members of society to the least. But since the difference principle was introduced, economic inequality has increased dramatically, reaching levels now not seen since just before the Great Depression, levels that Rawls surely would have thought perverse. Many blame this increase on the rise (...) of supply-side economics and the dramatic cuts in marginal tax rates enacted by the supply-siders for corporations and those already at the top of the income distribution. But I contend that the difference principle, or at least the ethos that the difference principle embodies and represents, is also partially to blame. Accordingly, the purpose of this paper is to explain how the difference principle, the ideas and arguments of the supply-siders, and this dramatic rise in inequality are connected, to identify where the difference principle went wrong, and to discuss what those who remain committed to the liberal egalitarian ideals that the difference principle was thought to represent might do about it. (shrink)