LECTURE 4 JUSTICE AND ECONOMIC DISTRIBUTION

AN OVERVIEW
This lecture examines: y The concept of justice; y Rival principles of economic distribution; y The utilitarian approach to justice in general and economic justice; y The libertarian theory that places a moral priority on liberty and free exchange; y Rawl s on fairness and moral equality of persons.

LEARNING OBJECTIVES
Students should be able to
y to discuss the concept of justice, its relation to fairness,

equality, deserve and rights. y to differentiate the rival principles of economic distribution y to argue on the three different theories of justice in economic distribution

THE NATURE OF JUSTICE

Justice a) Fairness fair treatment of members of groups of people Equality all persons are equal does not establish a direct relationship between justice and economic distribution Deserve people get what they deserve Rights injustice violation of the rights of some identifiable person

(b)

(c)

(d)

Rival Principles of Distribution

Distribution justice proper distribution of social benefits and burdens Rival principles recommended as a basis of distribution are:
y an equal share y according to individual need y according to personal effort y according to social contribution y according to merit

y Problems:

(a) If equal share of income guaranteed, the lazy would receive as much as the diligent (b) Effort is hard to measure and compare (c) One is able to contribute to society may depend on one s luck in being at the right place at the right time No single principle seems to work in enough circumstances to be defended successfully as the sole principle of justice in distribution.

Theories of justice in economic distribution:

yThe Utilitarian View yThe Libertarian Approach yThe Rawls s (Egalitarian) Theory

Of Justice

THE UTILITARIAN VIEW

Justice is the maximization of happiness ultimately determines what is fair and unfair. Utilitarianism and Economic Distribution
y The utilitarian theory of justice ties the question of economic

distribution to the promotion of social well-being or happiness. y Deciding what sort of economic arrangements would best promote human happiness requires the utilitarian to consider many things, including (1) the type of economic ownership (private, public, mixed) (2) The way of organizing production and distribution in general (pure laissez faire, market with government planning and regulation, fully centralized planning)

(3)

the type of authority arrangements (worker control versus managerial prerogative) the range and character of material incentives the nature and extent of social security and welfare provisions

(4) (5)

y Utilitarians favourably view increased worker participation and more

equal distribution of income.

Worker participation
y Enhance productivity and promote fuller development and well-being

of the people involved

Greater equality of income

y Making the distribution of income more equal is a good strategy for

maximizing happiness

THE LIBERTARIAN APPROACH

y Justice consists in permitting each person to live as he or she pleases, free from the interference of others. y No person, group, or government should disturb you in living the life you choose.

Nozick s Theory of Justice

y People has certain basic moral rights. y These rights refrain people from interfering with others beyond this we are not obliged to do anything positive for anyone else, nor is anyone required to do anything positive for us.

Nozick s Entitlement theory

y People are entitled to their holdings (goods, money, and

property) as long as they have acquired them fairly without violating other people s right.

Principles of Nozick s entitlement theory :

(1) Concerns the original acquisition of holding

that is, the take over of unheld (own by no one) goods or the creation of

new goods.
Individuals are morally entitled to the products of their labour.

Example: If you discover minerals from unowned land, then you have justly acquired this new holding.

(2)

Concerns transfers of already-owned goods from one person to another

y If a person possesses a holding because of a legitimate

transfer, then he or she is entitled to it. Example: Acquiring things by purchase, as a gift (3) No one is entitled to a holding except by acquiring it through no. (1) and (2).

Non Entitlement Theory (Distribution D1)

The Wilt Chamberlain Example Wilt Chamberlain is a basketball star signs a contract that guarantee him US$5.00 from the price of each ticket sold to people who come to watch him play. If 1 million people attend his games, he will have US$5million. He will have more income than anyone else in the society earns. Situation D1 People have not given US$5.00 to Wilt Chamberlain.

Situation D2 People have given US$5.00 to Wilt Chamberlain transferring parts of their share of money to Wilt Chamberlain willingly To maintain the D1 situation will interfere with people s freedom to use their resources as they wish. Non Entitlement Principle of justice can only be achieved by interfering continuously with people s lives.

The Libertarian View of Liberty

y Involves a commitment to leaving market relations - buying,

selling, and other exchanges totally unrestricted.

y Libertarians are for economic laissez faire and against any

governmental economic activity that interferes with the marketplace, even if the point of the interference is to enhance the performance of the economy. Example: Government subsidy for locally manufactured cars is considered an interference.

y Libertarians frequently contend that

(1) (2)

Private property is necessary for freedom and Any society that doesn t respect private property rights is coercive.

Markets and Free Exchange

y A totally free market is necessary for people to exercise their fundamental

rights. However, unregulated market transaction can lead to disastrous results. Example: Famine occurs because large numbers of people lack of money to buy food. y Justice may not requires someone rich to donate and it does not allows us to force him or her to do so, but charity on his or her part would be a good thing. Property Rights Nozick s critics argue that: (a) Property is not restricted to material objects like cars or houses, but include abstract goods such as dividends from a corporate investment, pension, and intellectual property. (b) Property ownership involves a bundle of different rights, for example, to possess, use, manage, dispose of, or restrict others access to something in specified ways.

RAWLS S THEORY OF JUSTICE

Rawls argues that people in the original position would agree on two principles as the basic governing principles of their society: (1) A guarantee of fundamental liberties to each person Equal right to a comprehensive set of civil liberties (2) Social and economic inequalities are justified only if inequalities benefit the least advantaged members of society. The Original Position Rawls advocates that: (a) Each individual chooses the set of principles for governing society that will be best for himself or herself (and loved ones), therefore, these principles are agreed to under conditions of equality and free choice. (b) People in the original position have no knowledge about themselves or their situation that would lead them to argue from a biased point-of-view.

Basic Principles of Justice: (1)Each person is to have an equal right guarantees not only equal freedom to individuals but also much freedom to individuals as possible Example: Permitting one to drive on either side of the road would only interfere with other drivers who want to drive efficiently to their various destinations. Follow the left lane if the driver does not overtake another driver. (2)Social and economic inequalities are to satisfy two conditions: (a) Jobs and positions that bring greater rewards, there must be equality of opportunity in competition among individuals for those positions in society. (b) Inequalities work to the benefit of the least advantaged group in society. Example: Reducing income tax Will this benefit the least advantaged members of society more in the long run than any alternative tax policy?

Fairness and the Basic Structure

y Rawls rejects utilitarianism because it might permit an

unfair distribution of burdens and benefits.

y Contrary to entitlement theory, he argues that the

primary focus of justice should be the basic social structure, not transactions between individuals.
y He contends that society is a cooperative project for

mutual benefit and that justice requires us to reduce the social and economic consequences of arbitrary natural differences among people.

y Discussion Questions
(1) The gap in income between the rich and the poor is getting wider by the day. Explain the various methods of distribution of economy and which do you think is best in promoting economic justice. (2) There is a growing disparity in the earning power of the various sections of society. Explain the various principles of economic distribution and their respective advantages and disadvantages. (3) Economic distribution should be fair. There must be equal distribution of benefit and burden. Discuss.

Answer: Discuss the concept of Utilitarianism, Libertarianism and Rawl s Theory of distribution Utilitarianism: - may result in unfair distribution of benefit and burden Libertarianism: - non interference Nozick s theory - inheritance is unfair. (4) State accurately Rawl s two principles of justice. How can these two principles be applied in a given case?