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Is There More to Social Justice Than Efficiency?

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Part of the book series: Palgrave Studies in Classical Liberalism ((PASTCL))

Abstract

In this chapter criticizes the primacy Pareto superiority has often enjoyed in the classical liberal tradition. It is important that we see how efficiency can complement other classical liberal objectives, such that there is no one form of market capitalism. There are rather many ways of designing, say, the rules of property and contract. We can design market capitalism with broadly egalitarian goals in mind, like, for example, ameliorating poverty or limiting inequality. This chapter counters a possible objection to the rule egalitarian program, namely that it would simply make everyone worse-off, and therefore that we should not entertain such a leveling-down position. Arguing against Jason Brennan, it shows that the case for Pareto superiority has its limits.

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Notes

  1. 1.

    Southern Pacific Company v. Jensen, 244 U.S. 205, 222 (1917).

  2. 2.

    John Rawls, A Theory of Justice, Oxford, Oxford University Press, 1999, p. 266.

  3. 3.

    Jason Brennan, “Rawls’ Paradox”, Constitutional Political Economy, Vol. 18, 2007, p. 293.

  4. 4.

    Jason Brennan, “Rawls’ Paradox”, Constitutional Political Economy, Vol. 18, 2007, p. 291.

  5. 5.

    Jason Brennan, “Rawls’ Paradox”, Constitutional Political Economy, Vol. 18, 2007, p. 287.

  6. 6.

    Richard A. Posner, Economic Analysis of Law, New York, Wolters Kluwer, 2011, pp. 645–648. Milton Friedman, Capitalism and Freedom, Chicago, U. of Chicago Press, 2002, pp. 178–181. David Friedman, Law’s Order, Princeton, Princeton U. Press, 2000, p. 10.

  7. 7.

    G. Thomas Kingsley, “Housing Vouchers and America’s Changing Housing Problems”, in William T. Gormley, Jr. (ed.), Privatization and Its Alternatives, Madison, University of Wisconsin Press, 1991, pp. 115–133.

  8. 8.

    See W. Baumol, R. Litan, and C. Schramm, Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity, New Haven, Yale U. Press, 2007, 321 pp.

  9. 9.

    David Dollar and Aart Kraay, “Growth Is Good for the Poor”, Journal of Economic Growth, Vol. 7, 2002, pp. 195–225.

  10. 10.

    Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776, I.viii, G.ed. pp. 83ff, London, Ward, Lock, and Tyler, 1812, pp. 66ff. See also, Friedrich Hayek, Law, Legislation and Liberty, London, Routledge, 2013, p. 85. “There can be no doubt that in such fields as the law on the relations between master and servant, landlord and tenant, creditor and debtor, and in modern times between organized business and its customers, the rules have been shaped largely by the views of one of the parties and their particular interests”.

  11. 11.

    It would be “absurd”, said Thomas Piketty, to “assume from the outset that growth is naturally ‘balanced’ in the long run.” Thomas Piketty, Capital in the Twenty-First Century, Cambridge, Harvard University Press, 2014, pp. 15f.

  12. 12.

    Matt Zwolinski, “A Libertarian Case for the Moral Limits of Markets”, Georgetown Journal of Law and Public Policy, Vol. 13, 2015, p. 280.

  13. 13.

    Frank H. Knight, “Abstract Economics as Absolute Ethics”, Ethics, Vol. 76. 1966, p. 165.

  14. 14.

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  15. 15.

    G. Gaus, “Hayekian ‘Classical’ Liberalism”, in J. Brennan, B. van der Vossen, and D. Schmidtz (eds.), The Routledge Handbook of Libertarianism, London, Routledge, 2017, pp. 38f.

  16. 16.

    Milton Friedman, Capitalism and Freedom, Chicago, University of Chicago Press, 2002, p. 26.

  17. 17.

    Åsbjørn Melkevik, “A Theory of Business Eunomics: The Means-Ends Relation in Business Ethics”, Journal of Business Ethics, Vol. 160, No. 1, 2019, pp. 293–305.

  18. 18.

    Lon L. Fuller, “American Legal Philosophy at Mid-century: A Review of Edwin W. Patterson’s Jurisprudence, Men and Ideas of the Law”, Journal of Legal Education, Vol. 6, No. 4, 1954, p. 474.

  19. 19.

    Milton Friedman, Capitalism and Freedom, Chicago, University of Chicago Press, 2002, p. 12.

  20. 20.

    Hanoch Dagan and Avihay Dorfman, “Justice in Private: Beyond the Rawlsian Framework”, Law and Philosophy, Vol. 37, 2018, p. 177.

  21. 21.

    Joseph Heath, The Efficient Society, Toronto, Penguin Books, 2001, p. 24.

  22. 22.

    P. Atiyah, The Rise and Fall of Freedom of Contract, Oxford, Clarendon Press, 1979, p. 606.

  23. 23.

    P. Atiyah, The Rise and Fall of Freedom of Contract, Oxford, Clarendon Press, 1979, p. 606.

  24. 24.

    David Friedman, Hidden Order, New York, Harper Business, 1996, p. 223.

  25. 25.

    John Tomasi, Free Market Fairness, Princeton, Princeton University Press, 2012, p. 236.

  26. 26.

    Friedrich Hayek, The Road to Serfdom, Chicago, University of Chicago Press, 2007, pp. 215f.

  27. 27.

    F. Hayek, “The Trend of Economic Thinking”, Economica, Vol. 40, 1933, pp. 121–137.

  28. 28.

    Will Kymlicka, “Left-Liberalism Revisited”, in Christine Sypnowich (ed.), The Egalitarian Conscience, Oxford, Oxford University Press, 2006, p. 20. Richard Arneson, “Egalitarian Justice Versus the Right to Privacy”, Social Philosophy and Policy, Vol. 17, 2000, pp. 91–119.

  29. 29.

    Andrew Lister, “The ‘Mirage’ of Social Justice: Hayek Against (and For) Rawls”, Critical Review, Vol. 25, 2013, p. 409, 422ff. A. Lister, “Markets, Desert, and Reciprocity”, Politics, Philosophy & Economics, Vol. 16, 2017, pp. 47–69.

  30. 30.

    Friedrich Hayek, Law, Legislation and Liberty, London, Routledge, 2013, p. 235.

  31. 31.

    F. Hayek, “The Use of Knowledge in Society”, American Economic Review, Vol. 35, 1945, pp. 519–530. See also, Herbert Simon, “Rationality in Psychology and Economics”, Journal of Business, Vol. 59, 1986, pp. S209-S224, and Jon Elster, Local Justice: How Institutions Allocate Scarce Goods and Necessary Burdens, Cambridge, Cambridge University Press, 1992, p. 210. As Elster explains, desert is backward-looking, and thus, as an allocative principle, it does not account for its possible future effects.

  32. 32.

    John Rawls, “Two Concepts of Rules”, The Philosophical Review, Vol. 64, 1955, p. 26.

  33. 33.

    Friedrich Hayek, Law, Legislation and Liberty, London, Routledge, 2013, p. 261.

  34. 34.

    F. Hayek, Individualism and Economic Order, Chicago, U. of Chicago Press, 1980, p. 111.

  35. 35.

    L. von Mises, The Free and Prosperous Commonwealth, Princeton, Nostrand, 1962, p. 79.

  36. 36.

    F. Hayek, Individualism and Economic Order, Chicago, U. of Chicago Press, 1980, pp. 114–118. M. Friedman, Capitalism and Freedom, Chicago, U. of Chicago Press, 2002, p. 162.

  37. 37.

    Gordon Tullock, The Logic of the Law, New York, Basic Books, 1971, pp. 8f.

  38. 38.

    George J. Stigler, “Economics or Ethics?”, Tanner Lectures on Human Values, Harvard University, 1980, p. 151

  39. 39.

    Åsbjørn Melkevik, “The Perils of Not Thinking Like an Economist: How to Assess Value”, Ethics and Economics, Vol. 15, No. 2, 2018, p. 7.

  40. 40.

    Hanoch Dagan and Avihay Dorfman, “Justice in Private: Beyond the Rawlsian Framework”, Law and Philosophy, Vol. 37, 2018, p. 188.

  41. 41.

    For example, the Federal Housing Administration’s preference for predictable housing values contributed to urban blight. See Stephen Macedo, “Hayek’s Liberal Legacy”, Cato Journal, Vol. 19, 1999, pp. 291f. See also, S. Macedo, “Property-Owning Plutocracy”, in Clarissa Rile Hayward and Todd Swanstrom (eds.), Justice and the American Metropolis, Minneapolis, University of Minnesota Press, 2011, pp. 33–58.

  42. 42.

    Jacob Viner, “Hayek on Freedom and Coercion”, Essays on the Intellectual History of Economics, Princeton, Princeton University Press, 1991, p. 347.

  43. 43.

    Jacob Viner, Essays on the Intellectual History of Economics, Princeton, Princeton University Press, 1991, p. 351.

  44. 44.

    Jan Narveson, “Rawls on Equal Distribution of Wealth”, Philosophia, Vol. 7, 1978, pp. 281–292. Colin Farrelly, “Justice in Ideal Theory: A Refutation”, Political Studies, Vol. 55, 2007, pp. 844–864.

  45. 45.

    David Friedman, Hidden Order, New York, Harper Business, 1996, p. 224.

  46. 46.

    Friedrich Hayek, The Constitution of Liberty, Chicago, University of Chicago Press, 1978, pp. 224f.

  47. 47.

    L. von Mises, The Free and Prosperous Commonwealth, Princeton, Nostrand Co., 1962, p. 4.

  48. 48.

    H. Simons, Economic Policy for a Free Society, Chicago, U. of Chicago Press, 1948, p. 4, and H. Acton, The Morals of Markets and Related Essays, Indianapolis, Liberty Press, 1993, p. 102.

  49. 49.

    D. Boucoyannis, “The Equalizing Hand: Why Adam Smith Thought the Market Should Produce Wealth Without Steep Inequality”, Perspectives on Politics, Vol. 11, 2013, pp. 1051–1070.

  50. 50.

    David Friedman, Hidden Order, New York, Harper Business, 1996, p. 222.

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Melkevik, Å. (2020). Is There More to Social Justice Than Efficiency?. In: If You’re a Classical Liberal, How Come You’re Also an Egalitarian?. Palgrave Studies in Classical Liberalism. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-37908-7_3

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