Why wealth inequality is not unjust, but power inequality is
In a previous post, I explained that one of the underlying sources of disagreement about basic economic policy is that first world economies are both theoretically and practically complex, and thus may be quite difficult to reconcile with one’s particular theory of justice—e.g., a theory that seeks to ensure some baseline fairness in the distribution of economic output (“substantive fairness”),or a theory that seeks simply to ensure some baseline fairness in the process of economic transactions (“procedural fairness”). Because tracing economic activity to tangible value is so difficult, it is also difficult to agree on the nature of our economic problems and how they can or should be fixed. Given the vastly different models of evaluating economic fairness, is there any way conservatives and liberals can get on the same page when talking about so-called entitlements like social security, health care, unemployment, welfare, et al.?
In this post, I attempt to explain the rationale and preconditions under a conservative political theory for the state’s provision of certain need-based economic concessions. I then attempt to explain that while wealth inequality is rarely “unjust,” power inequality breeds injustice to the extent it compromises a political system’s guarantee of procedural fairness in economic transactions, and that if procedural fairness cannot be ensured, wealth inequality can no longer be deemed to be presumptively fair.
Entitlements Depend Upon the Existence of Political Society, and Thus Are Not Founded in Natural Rights Theory
Questions of economic justice or fairness, if they have any merit at all, depend on the existence of a formally organized state. That is, in the state of nature, and in the absence of the bad acts of others, such a thing as economic “injustice” or “unfairness” does not exist. A drought that ruins a crop, for example, or a serious injury or illness requiring medical attention, or an inability to acquire provisions for a long winter, do not involve questions of justice or fairness. They might involve acts of God, nature, or self, and thus would concern, respectively, questions of theology (what man might reasonably expect from God), science (what man might reasonably expect from nature), or morality (what man might reasonably expect from himself). What they do not concern, however, are questions about what one man can reasonably expect from another man—i.e., justice. Notions of justice, then, only come into view in the context of political society.
The reason this observation is important is the difference between matters of theology, science, and morality, on the one hand, and justice on the other. One of the principal reasons justice is a special case has to do with the concept of redress. In other matters, man can do nothing more than curse God, nature, or himself for the acts done upon him. In questions of civil wrongs, however, man has a natural right to a remedy for the injuries worked on him by his fellows. When man fails to honor his obligations to others—imputed upon him either by contract or minimum standards of conduct—justice requires he make whole those who are harmed by his conduct.
Also remember, however, that though we are now in political society where we possess a right of remedy in certain circumstances against the harmful acts of other men, we continue to have no right of remedy against the harmful acts of God, nature, and self. For example, consider the case of a person of below average intelligence born into poverty. Assume this person avails himself of the opportunities reasonably available to him, but, by no obvious fault of his own or others, nonetheless fails to pull himself out of poverty. Because no other man has caused this unfortunate condition to occur, the condition cannot be described as unjust. Whatever ill this man suffers is a matter of theology, science, or morality, not of justice.
Mistaking Wealth Inequality for Injustice
The insistence that the foregoing example of the poor man unable to pull himself out of poverty poses a problem of injustice typically draws from the argument that wealth disparity represents a substantive evil. To determine whether wealth inequality does indeed implicate injustice, consider that in a subsistence economy, there is no problem of wealth inequality. An acre of earth will tend to yield to one man the same number of potatoes or ears of corn as it does to another. While one man, by virtue of greater physical prowess or skill, might be able to cultivate a bit more land than another, or coax a bit more product from that land, but the difference will tend to be relatively slight.
Far from depending solely upon the earth for our sustenance and pleasure, we now depend upon the product of man’s ingenuity and sweat-of-the-brow for the enormous improvement in productivity and quality of life furnished by our market economy. While one apple tree will yield roughly the same amount of produce as another, one man, through his diligent labor and prodigious talent, will yield orders of magnitude more useful product than another man. An economy such as ours that incentivizes such diligence produces tremendous economic output. While political society under law inevitably results in a disparity of wealth, it cannot be denied that the system has made all of its members better off in absolute terms than they would have been in a subsistence economy.
If this is true—and if it is also true that, absent any unjust human act, redressable economic injustices nonetheless do exist in political society—then we might ask what it is about political society that seems to breed injustice. As a substantive matter, for the vast majority of people, political society provides a baseline standard of living that is far greater than the baseline available in the state of nature. For such people, that standard of living cannot constitute a redressable economic harm in political society unless that standard of living is worse than what could have been expected in the state of nature. In other words, if one would be better off living in the wilderness than in political society, it might be said that political society has failed to fulfill its implicit promise of a better life. The only cognizable claim of redressable economic injustice, then, might be available for people for whom the economic baseline in political society is less than they would have had in the state of nature. For such people, entry into political society was a bad bargain, and it might be said that the deprivation of that relative advantage the individual may have had in the state of nature results in a right in the individual to the difference.
The Problem of Power Inequality
Aside from these very rare circumstances, however, I posit that “entitlements” cannot be explained in terms of remediating injustices. Claims of wealth injustice only arise once a political system is established to safeguard contractual, economic, and property rights. It is the very act of contracting that permits multiple individuals to exchange goods and services, divide tasks, assign benefits, delegate duties, collectivize labor, and otherwise creatively maximize human productivity through cooperative private agreement. But it is at even this very basic stage of consensual private collaboration that inequality markedly increases.
There is nothing unjust about economic inequality. What does become unjust, however, is when those who benefit from an organized system of laws to amass wealth, and then use that wealth to abuse that system of laws. What results, then, is not just wealth inequality (which I contend is no sin by itself), but power inequality. Where power inequality exists in great enough measure, a political system can no longer sufficiently guarantee procedural fairness. And where there is no guarantee of procedural fairness, wealth inequality suddenly becomes a real injustice—inequality of wealth is only just to the extent it is the result of free choices, and free choice cannot be presumed where there exists an inequality of power.
It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth cannot be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society–the farmers, mechanics, and laborers–who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing.
— Andrew Jackson’s Veto of Legislation the Bank of the United States, 1832.
Andrew Jackson was an extremely mixed bag, but there is something very attractive about the idea embodied in this quote: a commitment to equality by protecting rights rather than redistributing property, and a commitment to creating wealth by empowering free economic choices rather than guaranteeing predefined economic outcomes. The left’s campaign to empower the middle class and the right’s campaign to shrink the size of government should be able to find some common ground in advancing these principles.
