Justice & Economic Distribution

1. Justice & Economic Distribution
Chapter 3

2. BRIEF SUMMARY
 THE NATURE OF JUSTICE
 Rival Principles of Distribution
 THE UTILITARIAN VIEW
 Utilitarianism and Economics Distribution
 THE LIBERTARIAN VIEW
 Nozick’s Theory of Justice
 The Wilt Chamertain Example
 The Libertarian View of Liberty
 Market and Free Exchange
 Property Rights
 RAWL’S THEORY OF JUSTICE
 The Original Postion
 Choosing Principles
 Rawl’s Two Principles
 Fairness and the Basic Structure

3. Introduction
 Economic justice concerns a network of moral issues in our
society.
 These issues are raised by society’s norms about distribution of
wealth, income, status, and power.
 Should CEOs give themselves enormous salaries at the expense of stockholder profits and employee salaries?
 Should expensive medical procedures be available only to those who can afford them?

4. The Nature of Justice
 Definitions of justice: Justice is related to morality as part to a
whole, and is often specified in connection with terms such as
fairness(‫,)عدل‬ equality(‫,)مساوات‬ desert or rights(‫.)حق‬
 It is one important aspect of morality.
 Talk of justice generally involves related notions of fairness,
equality, desert, and rights.

5. The Nature of Justice
(1) Aristotle on justice as fairness: Treat similar cases alike except
where there is some relevant difference.
(2) Mill on justice as a moral right: Justice implies something that is
not only right to do, and wrong not to do, but something that an
individual can claim from us as a moral right.

6. The Nature of Justice
 Five rival principles of distribution:
(1) Each an equal share.
(2) Each according to individual need.
(3) Each according to personal effort.
(4) Each according to social contribution.
(5) Each according to merit.
For example: If equality of income were guaranteed, then the lazy would receive
as much as the industrious. On the other hand, effort is hard to measure and
compare, and what one is contributed to society may depend on one’s luck in
being at the right place at the right time

7. The Nature of Justice
 Reconciling rival principles of distribution: Some philosophers
argue that principles are applicable in some circumstances and
not in others – but it is not always clear how to reconcile two or
more rival principles in the same circumstances.
 Michael Walzer’s approach: The idea that different distribution
principles depend on implicit social norms.

8. The Utilitarian View
 Reconciling rival principles of justice: Mill argued that rival
principles of justice can be reconciled only on the basis of the
principle of utility, such as through considerations of the general
well-being.
 Utilitarianism does not tell us which economic system will
produce the most happiness.

9. The Utilitarian and Economic Distribution
 Deciding which system will promote most happiness depends on
knowing:
(1) The type of economic ownership.
(2) The form of production and distribution.
(3) The type of authority arrangements.
(4) The range and character of material incentives.
(5) The nature and extent of social security and welfare provisions.

10. The Utilitarian View
 Distinctive utilitarian ideals:
(1) Worker participation: In his Principles of Political Economy
(1848), Mill argued for the formation of labor and capital
partnerships promoting equality between workers and
industrialists.
(2) Greater equality of income: Utilitarians are more likely to favor
equal income distribution on the basis of the so-called declining
marginal utility of money.

11. The Libertarian View
 The principle of liberty: Libertarians refuse to restrict individual
liberty even if doing so would increase overall happiness.
 Nozick’s theory of justice: Nozick developed an influential
statement of the libertarian position in his book Anarchy, State,
and Utopia, based on the idea of negative and natural rights
borrowed from the writings of the British philosopher John Locke
(1632–1704).

12. The Libertarian View
 The idea of Lockean negative and natural rights: The idea amounts to
(1) Non-interference with the way others choose to live or act, and
(2) The ownership of those rights prior to any social and political
institution.
 Nozick’s entitlement theory: Nozick maintains that people are entitled
to their holdings (that is, goods, money, and property) as long as they
have acquired them fairly.

13. The Libertarian View
 Principles of Nozick’s entitlement theory:
(1) A person who acquires a holding in accordance with the
principle of justice in acquisition is entitled to that holding.
(2) A person who acquires a holding in accordance with the
principle of justice in transfer, from someone else entitled to the
holding, is entitled to the holding.
(3) No one is entitled to a holding except by (repeated) applications
of statements 1 and 2.

14. The Libertarian View
 Nozick’s Wilt Chamberlain example:
The player of a team is guaranteed $5 from the price of each ticket.
He is a favorite player and eventually ends up with far more than the
average income.
Nozick argues that Chamberlain is entitled to his new wealth, and that
any other theory of economic justice would inevitably fail to defend his
entitlement.

15. The Libertarian View
 Distinctive libertarian ideals:
(1) Liberty: Libertarians support economic laissez faire and oppose
any governmental economic activity that interferes with the
marketplace, even if the point is to enhance the performance of
the economy.
(2) Free markets: Libertarians don’t contend that people morally
deserve what they get in a free market, but only that they are
entitled to it. Moreover, justice does not necessarily help those in
need.

16. The Libertarian View
 Property rights: For libertarians, property rights exist prior to any
social systems and legislative acts, reflecting one’s initial
appropriation of a product or exchange between consenting adults.
 Criticisms of libertarian property rights:
(1)Property includes more than material objects. It also has many
abstract forms.
(2)Property ownership is not a simple right but involves a bundle of
different rights.

17. Rawls’s Theory of Justice
 Main features: John Rawls (1921–2002), one of the most
influential contemporary social and political philosophers,
suggests a social concept of justice in his ground-breaking work
A Theory of Justice.
 Two important features of Rawls’s theory:
(1) The hypothetical-contract approach.
(2) The principles of justice that Rawls derives through it.

18. Rawls’s Theory of Justice
 The original position: Rawls proposes a thought experiment –
individuals are allowed to choose the principles of justice that
should govern them prior to any existing political or social
arrangement.
 The nature of the choice: Each individual will choose the set of
principles that will be best for him/herself (and loved ones).

19. Rawls’s Theory of Justice
 The veil of ignorance: To avoid disagreement with others while
pursuing one’s self-interest, all circumstances and conditions that
can influence one’s choice of principles of justice (economic
background, talents, privileges, etc.) ought to be removed.
 Once the basis for bias is eliminated, the groundwork for a choice
of fair principles of justice is established.

20. Rawls’s Theory of Justice
 Choosing the principles: Regardless of their particular interests,
people in the original position will want more, rather than less, of
the so-called primary social goods (income and wealth, rights,
liberties, opportunities, status, and self-respect).
 People in the original position will also choose conservatively, by
trying to maximize the minimum that they will receive.

21. Rawls’s Theory of Justice
 The two principles:
(1) Each person is to have an equal right to the most extensive total
system of equal basic liberties, compatible with a similar system
of liberty for all.
(2) Social and economic inequalities are to satisfy two conditions: To
be attached to positions open to all under conditions of fair
equality of opportunity, and to give the greatest expected benefit
to the least advantaged members of society.

22. Rawls’s Theory of Justice
 Explanation of the principles:
(1)The first principle takes priority over the second – it guarantees
as much liberty to individuals as possible, compatible with others
having the same amount of liberty.
(2)The first part of the second principle articulates the familiar
ideal of equality of opportunity.
(3)The second part of the principle – called the difference principle –
stipulates that inequalities are justifiable only if they benefit the
least advantaged members of society.

23. Rawls’s Theory of Justice
 Fairness and the basic structure: Rawls rejects utilitarianism
because it could permit an unfair distribution of benefits and
burdens. Contrary to Nozick, Rawls believes that social justice
concerns the basic structure of society, not transactions between
individuals.
 Benefits and burdens: According to Rawls, justice requires that
the social and economic consequences of arbitrarily distributed
assets (natural characteristics and talents) be minimized.