John Oliver Wilson
This essay forms a section of a much larger study of human values and economic behaviour (Wilson 1989: 25-32).Graphic: Figure 2
Economists have traditionally equated justice with distributional issues. The primary problem is one
of distributive justice, in particular a question of the ideal or desirable distribution of income and
wealth.. As Musgrave has stated:
The distribution of income and wealth in a market economy depends on a number of factors including the laws of inheritance, the distribution of innate talents, the availability of educational opportunities, social mobility, and the structure of markets, As a result of these factors, a state of distribution, with a given degree of equality or inequality, comes about This state will seem appropriate to some, while others will prefer a greater, and still others a lesser, degree of equality. (Musgrave 1959: 17)
When it comes to defining what is a desirable degree of equality in the distribution of income and wealth, or an acceptable degree of inequality, economic theory is woefully inadequate. The issue is viewed as a trade-off between efficiency and equality; a problem of determining the appropriate distribution of income and wealth through the political system and then allowing the economic system to achieve maximum efficiency in the production and distribution of commodities. Given the limitations of the traditional economic understanding of justice, we must turn to the literature of philosophers and others who have dealt with this issue in far more depth. We begin with the meaning of commutative justice, then examine productive or social justice, and conclude with distributive justice.
The concept of commutative justice was first asserted by Aristotle. The philosophical basis for commutative justice is rooted in the fundamental moral prohibition against harm, and in economic exchange harm is avoided when there is equivalence of exchange. Therefore, the issue of commutative justice is to determine the meaning of equivalence of exchange (Gunnemann 1986). It was this problem that Aristotle attempted to answer in discussing the relationship of a 'just price' and 'value in exchange' for a commodity that is exchanged in an economic market. In raising these issues, Aristotle set the stage for all future philosophic and economic thinking on the matter of commutative justice.
Thomas Aquinas identified fraud as a sin that arises in the course of voluntary transactions, and quoted Cicero that 'contracts are to be free of lies' (Aquinas 1975: 215). Adam Smith argued that a competitive market will determine a fair market price for all exchanges, but implicit in such a market is a world of shared meanings and mutual knowledge ability' (quoted in Gunnernann 1986: 103). It is a world that involves trust and credibility. In one of the more current statements on the issue, the National Conference on Catholic Bishops states that commutative justice calls for fundamental fairness in all agreements and exchanges between individuals or private social groups. It demands respect for the equal human dignity of all persons in economic transactions, contracts, or promises' (NCCB 1986: 35-6).
Productive justice relates to the fairness of participation by individuals in the economic system. It considers the impact of the methods of production on 'the fulfilment of basic needs, employment levels, patterns of discriminatiot4 environmental quality, and sense of community'. Furthermore, productive justice includes 'a duty to organize economic and social institutions so that people can contribute to society in ways that respect their freedom and the dignity of their labor' (ibid.: 37).
The roots of the concept of productive justice can be traced back to Aristotle, although it was Thomas Aquinas who is credited with formulating the basis for the modern understanding of productive justice. This basis is rooted in the acceptance of the essentially social nature of human beings. Justice can be neither specified nor understood apart from the web social interdependence which entails mutual obligation and duty (Hoflenbach 1977: 210).
Roman Catholic theologians have built upon the base of Aquinas and his legal justice, and expanded that base during the past century into a well developed concept of social or productive justice that has the following major characteristics. First, the philosophical basis of productive justice is the view that the individual is essentially a social being. It is through our interaction with other individuals in society that we actualize our true being. Second, labour defined in the broadest sense of productive participation in an economic system is the most important means that we have of realizing productive justice. Third, productive justice is determined in the institutionalized process of integrating the individual into the economic system. As a socio-economic process of integration, productive justice differs significantly from commutative justice and distributive justice winch are primarily concerned with the nature of individual economic relationships.
When most people think of justice, they are referring to distributive justice. In the most general terms distributive justice concerns the issue of allocating the benefits of a society or an economic system among all the members of that economic system. But how to define those benefits and how to determine a just criterion for allocation are highly debatable issues. A survey of the vast literature on distributive justice suggests that there are four primary criteria that contend with each other in these regards: (1) to each according to merit; (2) to each according to rank; (3) to each according to essential needs; and (4) to each the same (Perchnim 1963: 1-29).
To each according to his or her merit is generally interpreted to mean work or labour effort. Therefore, distributive justice is achieved when the benefits of an economic system accrue to individuals in proportion to their own efforts. If one individual works longer and harder than another individual, then that individual should receive a greater portion of the benefits available in an economic system.
Implicit in this understanding of distributive justice are the requirements of just wages and prices, and a system of exchange that is fair along with equality of opportunity. Given these conditions, then one could argue as does Nozick that whatever rises from a just situation (an equal distribution of basic entitlements) by just steps (equality of opportunity, just wages and prices, and a fair system of exchange) is just (Nozick 1974).
To each according to his or her rank requires that the members of a society or economic system be divided into different classes, and that the members of each class be treated according to some notion of equality while those in different classes may not be accorded equal treatment. Rank-ordered justice has a long tradition, and is most frequently associated with a view of society that rank has its privileges up to such a point that this creates stability and certainty in the nature of things. Rank may be viewed as the best means of achieving equity in the treatment of individuals within an institutional setting, such as the case where rank-ordered justice is applied to the principle of seniority in employment. For example, many American corporations and government institutions practice the principle of 'last hired-first fired', particularly those where labour unions are strong. This is clearly a case of rank-ordered justice. To each according to his or her essential needs requires that an economic system determine a certain level of basic human needs that must be satisfied, either through direct participation in the economic system (productive justice) or through a redistribution of resources sufficient to satisfy those needs (distributive justice). Traditionally, essential needs are defined in terms of certain basic requirements to sustain life and enable the individual to live at some minimal standard of living. That standard could be expressed in terms of income or certain levels of food consumption, housing standards, and legal, daycare and other family support services. Clearly, the difficulty with tins approach is how to define essential needs.
To each the same thing is the final concept of distributive justice. When the same thing is defined in term of income, and assuming that every individual has an identical and known marginal utility function of income, then this concept requires equality in the distribution of income. Such an extreme position has never been achieved by any economic system, but there are less absolute versions that fall into this general concept of distributive justice.
In conclusion, we can consider socio-economic, three different concepts: commutative justice, productive justice and distributive justice . Associated with each of the specific outputs as shown in Figure 2. 1. Thus, socio-economic justice is defined a matrix (J) of relevant outputs (Y1,. . . , y9). A particular economic system can be characterized by those outputs which are dominant in that society.
For instance, Economic System I might integrate the following outputs into its legal system and institutional structure: J 1= (Yl,Y2,Y3,Y6). Such an economic system would reward all individuals on the basis of merit, while ensuring that all individuals have an equal opportunity to participate in the economic system. Alternatively, Economic System II might integrate a different set of outputs: J 2 = (Y 1,Y2,Y4,Y5,Y7). This economic system would attempt to maintain equality in access to socio-oconomic practices through rank-ordered justice, while structuring its public and private institutions to ensure that die basic needs and sense of dignity and fairness of each individual are satisfied.
Whether or not Economic System I is better or worse than Economic System II cannot be determined by simply comparing the two matrices of outputs. There is no universal definition of justice, and therefore the issue can only be resolved by introspection and debate as to which best reflects the dominant morality of the society in question. For instance, with an individualist, utilitarian view, this will involve analyzing the impact of a given system of justice upon the happiness of the individual. An alternative view might involve an assessment of the fairness or equity with which all individuals are able to share in both the production and distribution of the total social and economic benefits generated by a given economic system.
Source: P. Ekins & M. Max-Ned, "Real-Life Economics", 1992.