Hayek – social justice as misnomer

Since Hayek’s criticism of the concept of social justice many liberals believe there is not much to add to the discussion. In fact, Hayek’s critique is intriguing: If we assume that only those outcomes of actions can qualify as moral for which an actor can be identified who sufficiently has caused the result, then we have to conclude that the spontaneous results of the free market do not qualify as moral. Hence they can be called neither ‘unjust’ nor ‘just’. Both adjectives are inappropriate (FA Hayek, Law, Legislation and Liberty, II, 1976:70).

Though true as that is, Hayek’s criticism does not apply to conceptions of social justice that do not assume that social justice has to be demanded because of social injustice, but argue that the call for social justice is based on other reasons. In fact, some of the prominent theories of redistribution seem to go away without that assumption. Some of them call for social justice in order to complement formal justice.

Complementing justice

The best known representative of that type is the theory of social justice by John Rawls, more precisely, the variant of it that one could call the Paretian one, i.e., the idea that there is no reason to stick to an existing social arrangement if an alternative is at hand that makes no one worse off but at least someone better off. The Paretian Rawls can be interpreted in form of a conjunction of two singular existential propositions: ‘There is one alternative to the market dispersion of goods that makes at least one better off, while leaving all others not worse off, and there is one case in which all would prefer that alternative, namely, under the assumption, taken under the veil of ignorance, that the alternative meets the difference principle.’

Of course, one would expect Rawls to present proof for such a claim, rather than be content with the assertion and the naming of the conditions under which, supposedly, the claim comes true. However, Rawls does not fulfill this expectation. More than that, he goes far beyond Pareto. Instead of leaving it to the insight that an alternative dispersion of goods, superior to that of the market order, is conceivable, and that under this conditions it would not be reasonable to stick to the inferior alternative; and instead of leaving it to the criterion that such an alternative has only be ‘at least as good as’ the status quo, he qualifies that alternative as ‘better’ (John Rawls, Distributive Justice, 1967:64). Above all, he does not require at all the voluntary consent of the involved parties (which is the sine qua non for formal justice) to justify the move to a Pareto optimal alternative.

Curtailing justice

Despite all that, it is still conceivable that reasons could be found that require limiting the applicability of formal justice to a certain range of economic activities (for instance, limiting the sovereign disposal of property). Such reasons could be seen in peculiarities regarding acquisition or use of property; peculiarities that inhibit an unlimited disposal of goods, although those are acquired in conformity to formal justice.

Such a view can be found in the works of James Griffin (J Griffin, Well-Being, 1986:288) and Joel Feinberg (J Feinberg, Harm to Others, 1984:14). The view could be labeled ‘pool good’ theory. The ‘pool good’ theory runs as follows: He who acquires more goods than others, uses the ‘pool goods’ more often than his fellow members of society. Consequently, it is right and proper to compensate others for this above average consumption, and by doing so correct the market dispersion of goods. In addition, since no market transaction is taken without partial use of pool goods, each uncorrected market distribution of goods is unjust, despite the fact that market actors, while involved in the production of these goods, conform to formal justice.

This reasoning, if correct, could form a solid foundation for a serious objection to the thesis that justice could be achieved without redistribution of produced goods.

However, treating pool goods as toll goods implies a serious flaw, concerning the very nature of pool goods. It is mistaken to assume that pool goods belong to the common. They are not the result of a plan or intentions by the originators, as it is in the case of toll goods. Pool goods are created spontaneously. They are positive externalities of previously executed actions or transactions, which bills have been settled, which execution has been gratuitous, or which created no title.

Hardy Bouillon serves as Professor for Philosophy at the University of Trier and as Professor of Philosophy and Economics at SMC University, Vienna.

Hardy Bouillon was our guest and presented his lecture at the Conservative Economic Quarterly Lecture Series (CEQLS) held by the Conservative Institute of M. R. Štefánik in Bratislava on November 19, 2012. More information is available here.

Article was published in Slovak language in Conservative Letters 11/2012, a newsletter of the Conservative Institute.