Today’s blog posting is a selection from the book, Economic Personalism, which you can get free from the CESJ website, or from Amazon or Barnes and Noble.
Today we look at distributive justice, the “out-take principle” that governs distributions from a common endeavor. Distributive justice, in one sense, is an individual virtue built on commutative justice, commutative justice being the most basic form of justice.
Aristotle
Distributive justice does not mean distributing to people based on need, except in extreme and limited circumstances. The idea that it does comes from nineteenth century American socialism. Since the 1830s, socialists defined “social justice” as another term for redistribution. This was divided into voluntary redistribution or philanthropy, and involuntary redistribution, misnamed “distributive justice”). It is important to note that in the socialist framework, the voluntary good of philanthropy was construed as mandatory. Distributive justice as understood by the socialists was no longer derived from the classical concept of Aristotle and Aquinas.
This requires some explanation. In classical philosophy, distributive justice demands that profits and losses be distributed according to the value of the pro rata inputs made by participants in a common economic endeavor. Thus, if A, B, and C contribute labor or capital to the value of $10, $15, and $75, respectively, to a project that yields a profit of $1,000, A would receive $100, B $150, and C $750.
When the common endeavor is the pólis, that is, an organized community, distributive justice governs rewards and punishments. It demands that honors and awards be granted by an authority in accordance with the relative merit or due of the recipients as determined by the value of their contribution to the community. Thus, a soldier who has exhibited bravery above and beyond the call of duty is given a Medal of Honor, while a just and competent administrator is granted high office with commensurate pay and benefits.
Charles Fourier, changed distributive justice.
Some authorities assert that distributive justice includes distribution based on need. Strictly speaking, however, this is not true distributive justice. It is an exception permitted in extreme cases under the “principle of double effect” — that something not evil in and of itself but that causes unintended harm may be permitted for the sake of a good that outweighs the harm.
When the need is dire, and all other recourse has been exhausted, duly constituted authority may redistribute wealth to keep people alive and in reasonable health. This is only categorized under distributive justice by default due to the fact it is a distribution made by authority.
As used by the socialists, however, distributive justice took on a fundamentally different meaning. Taking the exception as the rule and dismissing the chief characteristic of true distributive justice, socialists shifted the basis of out-take from proportionality of input on the part of the producer or provider (the justice principle), to need on the part of the recipient (the charity principle) in all cases, not just exceptional ones. Instead of “from each according to his ability, to each according to his inputs,” the distributive principle became “from each according to his ability, to each according to his needs.”
Taparelli, corrected social justice
This confused justice, the premier natural virtue, with charity (“caritas”), the premier supernatural virtue. True charity cannot be involuntary or coerced, but by relabeling “charity” as “justice” (which can be compelled), some people believe that distribution based on need can be coerced. Uncharitable people thus became “unjust” people, even criminals, for not redistributing their wealth to those in need.
It should be obvious that involuntary redistribution based on need is neither justice nor charity, but at best a barely tolerable expedient in an emergency. Socialism even distorted the great good of philanthropy, the desire to promote the welfare of humanity in general. Socialists confused redistributing wealth for the general welfare with almsgiving, a type of charity to benefit individuals.
Understood properly, as an individual virtue as applied in economics and finance, distributive justice relates to how incomes are distributed to individual producers in a market economy. Operating as an individual virtue within a social context, a sort of quasi social virtue, in a free market economy, distributive justice guides economic institutions with respect to the income distribution or consumption side of the economic equation.
Commutative justice — strict justice — is the justice of contracts, of exchange, and exchange presumes equality. Equality being the essence of justice, all forms of justice ultimately derive from commutative justice and cannot violate, dismiss, or ignore it. In common with all forms of justice, distributive justice assumes the validity of commutative justice, or it could not be considered a true natural right.
Louis O. Kelso
As applied in economic justice, distributive justice is the out-take principle described in legal terms as the form of justice “which should govern the distribution of rewards and punishments. It assigns to each person the rewards which his or her personal merit or services deserve, or the proper punishment for his crimes.” (“Justice,” Black’s Law Dictionary. St. Paul, Minnesota: West Publishing Company, 1951.) Distributive justice reflects the equal right of each person to receive his full and proper due in proportion to the inputs of, and what is due to, others.
The classical form of distributive justice found in the Just Third Way is based on the exchange or market value of one’s economic contributions. This is the principle that all people have an equal right to receive a proportionate, share of the value of the marketable goods and services they produce with others, through their labor contributions, their capital contributions, or both. As Louis O. Kelso and Mortimer J. Adler explained,
Considering only those who are engaged in the production of wealth, and relying on free and workable competition as the only way to ascertain the facts about the equal or unequal value of the contributions made by each of a number of independent participants in production, distributive justice is done if the share (whether in the form of wages, dividends, rents, etc.) received by each participant in production is proportionate to the value of his contribution to production. (Louis O. Kelso and Mortimer J. Adler, The Capitalist Manifesto. New York: Random House, 1958, 70.)
Distributive justice must be extended equally to all participants in the productive process regardless of their social status, condition, or characteristic. It can only operate under conditions of a truly free and non-monopolistic marketplace that respects every participant’s full rights of private property.
This is because in a free market, unlike a command or State-controlled economy, every person as a producer or consumer votes with his money, determining for himself what something being exchanged is worth, rather than having a bureaucrat, technocrat, or wise man make that judgment for that individual.
Given the increasing use of labor-eliminating technology within a modern economy, producers who have only their labor to contribute to production have found that under distributive justice, they are due a resulting share of the wealth produced (or income thereof) that is insufficient for supporting themselves and their families. Without access to capital ownership, non-owning workers must turn more to coercive measures through the State or labor unions to receive livable incomes.
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