What is Economic Justice?

What is Economic Justice?

June 28, 2021 Off By Felso

Economic justice is not actually a fundamental concept for economists. This concept has only been pondered by radical political economists since Marx and Proudhon, especially for their critique of capitalism. The main problematic of economic justice is directly material, and the wealth brought by economic production and activity and how the fair distribution of responsibilities should be. This question can also be formulated exactly as:

“What is the fair distribution of the blessings and burdens of economic activity?” (Hahnel, 2005, p. 34).

In his book Economic Justice and Democracy, Hahnel mentions four rules of distribution for how economic wealth and responsibilities should be shared.

Rule I. Giving everyone according to the contribution value of their own physical and human capital: According to this rule, individuals can get a share from the economy as much as they contribute to the economy with the production tools and equipment they own. So how fair is this rule? In other words, is it possible to talk about economic justice in a system where this rule is applied? Let’s try to find the answer to these questions with an example. According to this rule, a person who inherits the means of production from his father and who contributes to the economy without putting any effort on it should get a larger share of the economy than a well-educated, regular employee and laborer, which is unfair and unjust. gains. Although this rule emphasizes the freedom of individuals in free societies to leave their property to whomever they want and to use it as they wish, it is clear that this rule does not foresee a fair distribution. Therefore, this rule cannot be a reasonable definition of economic justice.

II. Rule. To give to everyone only according to the contribution value of their own human capital: In the first rule, instead of the distribution that ignores the time and effort spent, it envisages a distribution where everyone receives their labor in return. Therefore, it can be accepted as a fairer economic system compared to the other. However, this time, the problem is that this labor is only considered physically. Consider that a person who is stronger and stronger due to his genetic characteristics will have more physical effort than a weak and frail person. So will this person get more? Instead of the inheritance lottery, the natural lottery will be effective in this sharing, which cannot be a good situation for economic justice.

III. Rule. Giving everyone according to their effort or personal sacrifice: According to this rule, the only thing that deserves extra reward is effort. Inheritance as in the first rule or II. It is not something that comes with a structural feature as in the rule, but it envisages distribution according to the effort expended with the decision to be made based on free will. This time, however, the question is how to measure these sacrifices. John O’Neill criticizes this rule:

“Distribution by effort fails as a general principle because it is potentially humiliating, especially for a low-output worker who has been given a ‘high effort’ rating. He evaluates her abilities badly. The problem here is that effort scores necessarily require judging not only the performance of workers but also their personality” (John O’Neill, quoted from Participatory Economics Hahnel 2005, p. 46). As can be seen, this rule, which does not coincide with moral judgments, cannot be aimed at providing economic justice and is eliminated.

IV. Rule. Giving everyone according to their needs: This rule falls into a different category from the other three rules. It now requires distribution according to something one does not have, rather than something one has. More needs require more economic distribution. For example, it is fair according to this rule that a worker who lost his hand in a work accident earns more. Objection to this rule may be related to its emphasis on humanity more. However, it is also a fact that the issue here is not philanthropy, but right. On the other hand, in order to talk about economic justice, the economy must also become more humane. This is achieved through a distribution that puts people’s needs first (Hahnel 2005, p. 48). Another objection is that just as measuring altruism can be a problem, so too does how to measure needs. However, this objection may lose its validity as it envisages distribution according to the most basic needs necessary for human life. So, accepting that this rule is more consistent than the others, the question asked at the beginning about how economic activities should be shared can be answered by saying “according to everyone’s needs”.

“How should the fair distribution of the blessings and burdens brought by economic activity be?” Examining the question of economic justice, it tries to answer this question with four different rules. It is formulated according to the contribution value of everyone’s own physical and human capital, to everyone according to the contribution value of his/her human capital alone, according to everyone’s effort or personal sacrifice, and finally to everyone’s needs.