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The Specter that Haunts Economists – Social Justice

The Specter that Haunts Economists – Social Justice Economy Near Us (XLVII)

I occasionally read, not in a systematic or deliberate fashion, articles or larger studies on economic inequality, poverty, the free-market (or, by way of opposition, less free), democracy, freedom, and the like. It is obvious that a reflection, especially at this high level of generality and abstraction is conducted quite metaphysically, that is, based on pre-reflective assumptions going to beliefs, on the one hand, and theory-laden, on the other hand. I am aware of these two unavoidable conditionalities and I am trying, as much as possible, to compensate for them in the analyses and the conclusions I draw, so establishing a degree of honesty for the authors in case. But the problem is of another kind, namely that the pretentious concepts mentioned above are, at most times, discussed in a common (“civilian”) framework, with a thin background of political theory, or social philosophy, or ethics or, above all, social justice theory. This means either the authors deliberately use a pop style (although, in my opinion, popularization is a more difficult labor than the original one, because it must make compatible both the correctness of concepts/issues discussed and the accessibility of ideas for non-experts) or simply those authors do not hold the minimum necessary background in the matter at hand. It is known that the imprecision (and, sometimes, even the misunderstanding) has the potential to illuminate ideas or directions not intended by the original work, and is just as true that, often, ones who know little in a field can enact revolutionary ideas, exactly because they did not (yet) “gain” the prejudices of that field. But such eventualities are extremely rare and I cannot (no matter how much goodwill I would have) give credit to writings that lead so very important subject into an unintentional (I hope) desultoriness. 

Freedom, democracy, and the market 

(a) On freedom

From the Schopenhauerian taxonomy of freedom (physical, intellectual, and moral), to come in quite recent times, the concept was, of course, refined from different perspectives (psychological, anthropological, sociological and the like). The question is whether we now have a short and conclusive definition of freedom in itself, without particularization to “regional” freedoms (by the way, the confusion between freedom and liberties is so frequent, that it no longer surprises almost anyone). And, yes, there is such a definition of freedom, which we should consider when appealing to it: there is a state of freedom if it is not the case that a private person imposes a purpose on others without the corresponding agreement from the affected party. So, from this definition we can infer at least two fundamental consequences for the concept of freedom: 1) a private person can impose on another private person means only, but not purposes, even without the agreement of that other person – for example, a seller can require a buyer to pay by card, not cash, without the buyer’s freedom being restrained; 2) a non-private person (and such a quality only the state has, of course) can impose on any private person both purposes and means (I set aside the fact that any such imposition must be both legal and legitimate).

(b) On democracy

As I suspected, there is a lot of confusion about the concept of democracy, as well. From considering it as a species of governing to categorizing it as a kind of political regime, a large spectrum of definitions and interpretations are vented, both in academic literature and in pop articles. We can ask ourselves if a short and adequate definition for democracy may exist, as in the case of freedom? I am afraid yes. Democracy is, simply, a type of public decision making, namely a way in which the public decision is made based on the assent of the majority of participants in that decision making. Neither more nor less. Of course, practically (here, the concept/term practice is different from the concept/term praxeological – in fact, the concept/term practical send us to the relations subject – subject, see the Kantian concept in this matter), democracy can be representative, participative (or a mix between, if an intelligent decentralization of public decision making is implemented). The most common confusion is met between democracy and freedom – but, to be well understood, from freedom one can infer, logically and institutionally, the democracy, while the reciprocal is false. So, we can have democracy without freedom – both historically and today, the examples are quite abundant), but if we have freedom, democracy seems to be inherent and even necessary (in the logical sense of the term).

(c) On the market

The fact that the market is an impersonal artifact (as any social construct) is quite disputable. There are strong reasons, both logical, and historical, that argue that the market is a product of… the state - in order to create the way in which the taxes can be generated and collected. Whatever the real cause of markets arising, it could be defined as an institutional device (not so impersonal, however, how it is claimed by those who readily take their definitions from the textbooks) allowing the private exchange among activities (Nota bene: the goods and services are only the interface among different activities). 

Then, what about social justice? 

The social justice topic sees its day exactly at the intersections between freedom, democracy, and the market. There are some reasons for this state of affairs:

1) the private exchange among activities requires the freedom, in order to allow to individuals following their own criterion of economic behavior (with its risk and opportunity);

2) the market regulation (Nota bene: the fundamentalist libertarians who claim the lack of the state from the economy forget that Hayek himself claimed the state necessary – in fact and with the right – for ensuring the sufficient regulatory framework of the free market) requires the rules be adopted democratically; they must be of benefit to all (or, at least, to most);

3) the market itself that is required to handle the huge information (either qua information or inferred from the observed behaviors), which no bureaucratic system can manage.

Although (sufficiently) regulated by the state in a free society, and under democracy, the market remains preponderantly impersonal, so its outcomes can be automatically distributed in an asymmetric way. That such an asymmetry is based on merit or not is an issue and will be ignored for the moment. My attention is focused on the diatribes thrown by the economists evoked in the beginning. I think such diatribes are unjustified, because I think they are based on two misunderstandings.

(a) social justice is confused with redistribution (for example, through fiscal instruments). But social justice is, primarily, distribution. Principled, the redistribution is not necessary if distribution is based on merit. Nota bene: the objectified merit, as bearer of remuneration, is the true conductor of individuals to their own economic emancipation, not the envy triggered by the economic inequality (see here, Hayek, positioning himself in such a conjecture);

(b) the economic inequality is confused with its state, while its true significance consists in its impact on the quality of life of the unfavored. The most articulate theory of social justice (the theory of John Rawls, a contractarian and procedural one) accepts, by the intermediation of the principle of difference, any increase of economic inequality, under the condition that the unfavored in society gain a higher quality of life (including, of course, the economic component) than in any other social arrangement (for example, in the case of stagnation or even of decreasing of the economic inequality).

Therefore, if I may, I would recommend that, even when the scientific goal is not among the purposes of some works (books, or articles, even in the pop style), minimum decency and responsibility to be held, in debating topics which are so difficult, pretentious, and which can have a significant impact on shaping the public opinion.




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