Mises Wire

Understanding The Importance of Justice

Justice

To many economists, questions of justice are not relevant to the study of free markets. In most situations where people try to invoke arguments about “justice,” they are concerned with distributive justice. Their aim is to address questions of wealth distribution and income inequality. They argue that “social justice” requires the state to redistribute wealth. 

In this context, Friedrich A. Hayek depicted “social justice” as a meaningless slogan—a mantra wielded by political activists to avoid having to give reasons or justifications for their policies. Hayek argued that markets are constituted, not by design, but by a form of “spontaneous order” in which any attempt to depict market forces as “just” or “unjust” reflects an inappropriate anthropomorphism of the market. In The Mirage of Social Justice he argued that “the term ‘social justice’ is wholly devoid of meaning or content… it is a semantic fraud, a phrase used to give moral approval to what is in fact a demand for the distribution of benefits according to some arbitrary criterion.”

Similarly, Ludwig von Mises argued that attempts to evaluate free market outcomes by reference to “justice” are misconceived. In Human Action, he argues that those who analyze free markets by reference to justice “hold up a set of metaphysical principles and condemn the market economy beforehand because it does not conform to them.” They are particularly concerned that free markets are “unjust” because they do not result in equal distribution of wealth. Mises points out that, although they may have started out with “sound intentions” by adopting a utilitarian approach to market analysis, they later turn around and denounce what they may see as “unjust” outcomes, such as wealth inequality. Paradoxically, the state interventions—which they then introduce in an attempt to achieve “justice”—only have the effect of leading them away from their economic goals. Mises explains:

Thus they are the harbingers of economic retrogression, preaching a philosophy of decay and social disintegration. A society arranged according to their precepts may appear to some people as fair from the point of view of an arbitrary standard of social justice. But it will certainly be a society of progressing poverty for all its members.

Mises reiterated that “capitalism has not only multiplied population figures but at the same time improved the people’s standard of living in an unprecedented way.” Those who wish to improve the material conditions of all people should therefore adopt the principles of capitalism, rather than adopting dubious “social justice” redistributive policies which only lead to poverty and economic decline. While endorsing Mises’s and Hayek’s utilitarian defense of free market capitalism, Murray Rothbard took an entirely different position on the justice debate. As David Gordon has often explained, Rothbard’s theory of ethics aims to surmount the limitations of utilitarian benefit-cost analysis. Rothbard criticized the utilitarian reluctance to make value judgements about specific acts. He argues, in the section quoted by Gordon:

The utilitarians declare, from their study of the consequences of liberty as opposed to alternative systems, that liberty will lead more surely to widely approved goals: harmony, peace, prosperity, etc. Now no one disputes that relative consequences should be studied in assessing the merits or demerits of respective creeds. But there are many problems in confining ourselves to a utilitarian ethic. For one thing, utilitarianism assumes that we can weigh alternatives, and decide upon policies, on the basis of their good or bad consequences. But if it is legitimate to apply value judgments to the consequences of X, why is it not equally legitimate to apply such judgments to X itself? May there not be something about an act itself which, in its very nature, can be considered good or evil?

In the Ethics of Liberty, Rothbard explains in more detail why he considers the utilitarian ethic inadequate in defending individual liberty. One of the points he makes is that unless one altogether avoids participating in any public policy discussions framed in the language of justice, one cannot avoid ever invoking value judgments. He argues that, “while praxeological economic theory is extremely useful for providing data and knowledge for framing economic policy, it cannot be sufficient by itself to enable the economist to make any value pronouncements or to advocate any public policy whatsoever.” Confining oneself to declaring that social justice is a meaningless slogan would be an unlikely starting point for anyone wishing to engage in public policy debates.

A further point made by Rothbard concerns defending individual liberty. He argues that cost-benefit analysis often produces results inimical to individual liberty. He argues that “to make the full case for liberty, one cannot be a methodological slave to every goal that the majority of the public might happen to cherish.” Sometimes the majority is wrong. As David Gordon has pointed out, this is not to say that utilitarian ethics is a simplistic matter of cost-benefit analysis, nor would it be accurate to say that utilitarians simply follow wherever majority opinion leads. Gordon points out that, “Utilitarians need to figure out what to include in their calculations, but to say this is not to establish that they cannot do so in a reasonable way.” Rothbard’s argument is, rather, that in some situations “one must go beyond economics and utilitarianism to establish an objective ethics which affirms the overriding value of liberty, and morally condemns all forms of statism.”

This is one reason why Rothbard defended property rights on moral or ethical grounds, directly addressing the demands of justice. He argued that:

…we cannot simply talk of defense of “property rights” or of “private property” per se. For if we do so, we are in grave danger of defending the “property right” of a criminal aggressor—in fact, we logically must do so. We may therefore only speak of just property or legitimate property or perhaps “natural property.” And this means that, in concrete cases, we must decide whether any single given act of violence is aggressive or defensive: e.g., whether it is a case of a criminal robbing a victim, or of a victim trying to repossess his property.

In other work, for example his “Just War” lecture where he defended the justice of the American Revolution and the War for Southern Independence, Rothbard shows that he takes very seriously the need to decide questions of justice in order to identify, in each case, which party is the aggressor. In striving to improve our material conditions it does not suffice to “let the chips fall where they may.” It is necessary to address questions of justice. Rothbard does not see justice as merely incidental to a defense of liberty, but rather as a moral and ethical concept that lies at the very heart of liberty. In the Ethics of Liberty, he argues that,

…first and foremost, liberty is a moral principle, grounded in the nature of man. In particular, it is a principle of justice, of the abolition of aggressive violence in the affairs of men. Hence, to be grounded and pursued adequately, the libertarian goal must be sought in the spirit of an overriding devotion to justice.… Justice, not the weak reed of mere utility, must be the motivating force if liberty is to be attained.

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