PRESENTATION

Chapter 22 focused on economic ethics that are, one way or the other, closely related to the obtained results as concerns macrojustice. Chapters 23 and 24 considered the general logical and necessary structure of economic ethical principles, and its various specific manifestations as concerns the structure and the “substance” of the families of criteria. This chapter and the next consider specific principles, respectively based on freedom and on preferences. Freedom is the basis of a variety of basic criteria. Among them, responsibility, desert, and merit relate judgment or allocation to the individual's action. Others consist of specifying the relevant meaning of equal freedom – the concepts of equality of opportunity are among them. Other principles propose that what should exist is what the individuals would have chosen in a putative free choice. When this notional choice is a collective free agreement, this is a theory of the social contract. This includes, in particular,“liberal social contracts” (see Chapter 3), and “fundamental insurance” against the occurrence of facts that are in reality given (theories of the “original position” are particular cases). Of course, rights, the scope of opportunities, responsibility, desert, merit, and social contracts have been the object of social-ethical analysis for centuries. They are forms of the most individualistic social ethics. Yet, the vastly unequal wealths that can result from equal social freedom in free markets led to claims of tangible equality or lower inequality, in the outcome.

THE ESSENCE OF THE QUESTION

An individual may face a situation of the labour market where she cannot work more than a certain level. If this level is zero, she is fully involuntarily unemployed. If not, and if she accepts this level and would like to work more, she is in partial involuntary unemployment. This partial unemployment can affect any of the productive characteristics of labour: duration, level of qualification, intensity, etc. This can also be manifested as a limit on the sales of the product of labour (no buyer, or other quantitative or qualitative limits).

The ELIE distribution distributes the value of individuals' earning capacities due to their productive capacities. The noted constraints affect these earnings capacities: if the labour proposed by the worker exceeds the constraint, the earnings are limited to those obtained by the accepted and actually performed labour, defined by the constraint (these labour and earnings may be zero). Hence, earnings as a function of actual labour are not defined for labours beyond the limit, and earnings as a function of proposed labour present this threshold at the earning level of the highest possible labour. This constraint limits the individual's earning capacities, and it is imposed on the individual. Therefore, it should be incorporated in an ELIE distribution. However, the individuals' production functions used in ELIE theory give each individual's earnings as a function of her labour for all labours, and they are nondecreasing functions of the productive characteristics of labour.

PRESENTATION AND OUTLINE

This chapter presents an analytical summarized overview of the properties of principles of adequate or fair distribution, that these principles hold by necessity created by their topic and by rationality. These principles constitute a rather well-defined set. Only a limited subset has been scholarly considered as yet – and not all fare brilliantly in the test of meaningfulness – while others doubtlessly as useful have not been yet. Logic and morality both entail that no principle can be valid for all questions; hence, each principle should be accompanied by the specification of its scope of application or by sufficient indications about it (as shown in forthcoming Section 2). For instance, ELIE was derived as a solution for overall distribution in macrojustice. A principle is characterized by two aspects, its substance and its structure (Section 4). The substance is the nature of the basic ethical reference of the judgment – this can differ from the direct object of the policy, from its instruments, and from the items whose distribution is observed or discussed. Individualistic principles are considered, and hence the substance is either in the family of freedom or means, or in that of happiness or satisfaction (Section 3) – the meanings and uses of the economic concepts of “utility” will be pointed out. Rationality in the basic and elementary sense of “for a reason,” or justified, turns out to imply two basic and related structural properties (Section 5).

GENERAL OUTLOOK

Impartialization to consensus

In questions of distribution, individual self-interests are opposed by definition, and this constitutes an intrinsic impediment to consensus. This holds both for individuals' own interests and for those of the people they particularly favour. Individuals' impartial views avoid this impediment, but this raises two problems.

First, individuals may just not have an impartial view. They may, for instance, have no opinion at all when their own interest (or that of the people they favour) is not at stake. One may then try to discuss with these people to make them aware of the issue and induce them to consider some impartial viewpoint (in addition to their self-interest or biased preferences). This, however, may fail or may not suffice. The solution to this problem will consist of theoretically deriving individuals' implicit hypothetical impartial views from their actual purely self-interested or self-centered evaluations. The methods of this derivation are presented, discussed, and applied.

However, the second problem then intervenes: impartiality does not entail consensus, because there are various different impartial moral judgments – contrary to an implicit or explicit belief common among scholars (for instance, an ELIE distribution with any level of coefficient k has a type of impartiality). Yet, impartializations of individuals'views make an important progress toward consensus, because they erase essential causes of disagreements: those due to oppositions among self-interests or self-centered preferences.

Among the solutions to the problem that impartiality does not suffice for consensus, one has a virtue of consistency.

PRESENTATION

This concluding chapter begins with a recapitulation of the general method, line of argument, and result. It then proposes practical strategies for introducing the obtained structure of distribution in actual distributive policies by more or less progressive transformations of present-day fiscal tools, possibly with unanimous, consensual approval at each step. The chapter then takes a look at the field of social improvement beyond macrojustice, in a chain of influences where one improvement paves the way for the next. Distributive justice is favourable to freely peaceful social relations and then to positive, other-regarding ones: the appropriate liberty and equality favour fraternity – which is hampered by the use of force and by envy, resentment, and sentiments that others benefit from what should be one's own. Sentiments favourable to other persons constitute a lowering of the importance of the ego, which can favour this lowering in the personal field, thus reducing acquisitiveness, greed, and unwarranted attachments and desires. This, by the way, will in turn reduce the effects and importance of imperfections in distributive justice. This may also free attention and energy for knowledge and appreciation of the cultural heritage of civilizations, and, possibly, for contributing to it. But these will be other stories.

Section 2 recapitulates the essential of the central derivation of macrojustice in society. Section 3 shows how the result can be implemented by progressive transformations of the present fiscal policies.

INTRODUCTION

The principle of ELIE compares with a number of well-known positions in social ethics and theories in political philosophy.

The life of modern societies for the last two centuries is shaped by the fight between two universalist distributive principles: self-ownership in process-freedom and the lowering of income inequalities. Now, both full self-ownership and the proper implementation of the standard philosophy of income egalitarians are particular ELIE schemes (see Chapter 11 for income equality). Indeed, ELIE turns out to be the simplest more general principle that encompasses these two opposing principles. Note that it has been derived from applications of the principle of unanimity and consensual opinions about global distributive justice. ELIE therefore constitutes both the common ground for the rational comparison of these two classical contenders, and the field of solutions intermediate between them (including these two cases). Most ELIE solutions will be intermediate between these two polar positions: ELIE is income equalization for the equalization labour and self-ownership for the rest.

The crucial parameter of ELIE is, indeed, the equalization labour. Its vanishing yields full self-ownership. When it is around lower standard working time, ELIE constitutes the possible first-best implementation of the most usual ideal of income egalitarians (see Chapter 11). We have noted that higher equalization labours, and notably the borderline maximal income equalization, are not to be retained (Chapter 7).

THE VARIOUS ANGLES OF APPROACH

We have seen that the facts about macrojustice, the relevant unanimous views, and the structure of impartiality required by conceptions of justice, entail that distributive justice in macrojustice has a structure of equal labour income equalization (ELIE). There remains to determine and realize the degree of community, redistribution, solidarity, or reciprocity: coefficient k. Chapter 17 has shown various basic aspects of this number and of the realization of the corresponding distribution. We now turn to the philosophy and the techniques of its determination. Endogenous social choice requires that the solution be derived from the views of society and of its members. The approaches to this determination are amenable to a dual division concerning, respectively,“who” evaluates and what is primarily evaluated. On the one hand, the evaluation can be seen as collective, cultural, sociological, and the result of the public ethos and debates; or it can be seen as made by the individual members of society. On the other hand, coefficient k can directly result from the view about global aspects of the society such as its degree of community or solidarity, or of individualism; or it can result from judgments about the interpersonal distribution of income or welfare, given that this distribution has the structure of an ELIE for the indicated reasons. These approaches, however, join one another when they are sufficiently deeply worked out.

SUMMARY

The foregoing has led to the conclusion that global distributive justice should focus on the allocation of rights in capacities. The present chapter will conclude that two types of rights in capacities should be self-owned – owned by their holder, or “naturally” allocated. They are the rights to use and benefit from the use because of process-freedom, and all the rights in eudemonistic and consumptive capacities for the specific issue of global distributive justice in macrojustice. These are the respective topics of Sections 2 and 3. The distribuand will then be restricted to the rent of productive capacities, whose allocation is considered in Parts II and IV of this study.

RIGHTS IN CAPACITIES

Types of rights in assets

The analysis of process-freedom has shown that it has specific implications as concerns the allocation of rights in capacities. The consideration of possible rights in capacities to begin with rejoins this conclusion.

A person's capacity is a set of characteristics of this person. It has the nature of an asset. Rights concerning an asset can be divided into several categories defined by the permitted use of the asset or by advantages derived from it. The relevant distinction considers four types of rights in an asset: the right to destroy; rights to use (without destroying) or use-rights rights to receive the benefits from this use or benefit-rights and rights to the value of the availability of the services this asset can provide or rent-rights.

THE GENERAL THEORY

Presentation and summary

Two states are “individualistically equivalent,” or, for short, “equivalent,” when all individuals are indifferent between them (unanimous indifference). The “principle of equivalence” consists of considering properties in states equivalent in this sense to the actual one. Given that the actual state has to be possible, and may be required to have some desired properties, some other properties may be better satisfied in other, equivalent states, or may be satisfied, or even defined, only in such states. These other properties may for instance be lower inequalities in goods or in freedoms, or equalities, or the highest sum of some valued item, and the actual state is often required to be Pareto efficient. The present chapter considers this theory and its applications (and in particular possible applications to global distributive justice). Section 1 presents the general theory and Section 2 the applications.

The philosophy of the equivalence principle, and notably the limit and possibility of its justification, are first considered (Section 1.2). One then notes the previous cases of application of this theory (Section 1.3), and the important property that non-Pareto-efficient states equivalent to a Pareto-efficient one have to be impossible (Section 1.4). The general theory of equivalence is then outlined in Section 1.5 and formally worked out in Section 1.6. The basic idea consists of taking, as specification of the levels of individual ordinal utilities, parameters for which some required properties are meaningful, such as equality, highest sum (in surplus theory), or lower inequality.

MACROJUSTICE AND MORAL ECONOMICS

The fifth and last part of this study compares the obtained result with normative principles that have been or can be proposed in the framework of economics. These principles are either aspects or cases of the obtained result (e.g., market liberalism, self-ownership, income egalitarianisms, social maximand functions), complements to it (for applications in the fields of microjustice or “mesojustice”), or, possibly, alternative proposals. Hence, the scope of the considered ideas is extensive. The focus here, however, is on their meaning, rather than on technicalities whose relevance fully depends on this meaning in the first place. The resulting survey of meanings of normative economic ideas, principles, or criteria probably has an interest in itself. There is, for instance, a close consideration of the various aspects of freedom (social, defined by a priori domains of choice, “natural” as socially unruly, or as various concepts and types of opportunity, rights, desert or merit from action, or responsibility); of the various meanings, uses, and properties of the concept of “utility” (happiness, satisfaction, lower pain, preference, choice, transitivity, comparabilities of various types); and of the rationally necessary structures of distributive principles (permutability, prima facie or ideal equality, lower inequality, benevolence), with their scope of application. Indeed, each principle or criterion should be accompanied by a clear and justified statement of the assumed meaning of the concepts it uses and of their properties, and of the proposed scope of application.

PRESENTATION: TWO POLAR VALUES AND INTERMEDIATE ONES

Chapter 23 emphasized the general structural properties of distributive principles. The present chapter focuses on issues concerning their “substance,” their material, or their basic concern. For individualistic principles, this material belongs to one of two broad families: freedom and possibilities, on the one hand, and happiness, satisfaction, or just preference, on the other hand. Both have held a central place in the normative side of economics for centuries, and, on the whole, freedom, with liberalism, has probably been the most important. Freedom is directly relevant – and, indeed, essential – for macrojustice. It has thus been discussed in Part I of this study for this application, and more broadly in Chapter 22 for comparison with various brands of economic thought. The present chapter is thus restricted, for both fields, to briefly pointing out the main applications, and to discussions of critical points, notably the interpersonal comparisons of freedom and of happiness that are, by logical necessity, required by the corresponding principles.

Indeed, we have seen that principles of justice require the interpersonal comparability of their basic concerns, whether they are the items or their variations, by logical necessity. Equality across individuals has to be considered across states for defining the basic property of nondiscernable permutations, in the same state for defining the ideal equality, and in comparing various states when differences in individual items across states are relevant.

PROCESS LIBERALISM

“This is mine because I made it or bought it with well-earned money”: This view expresses the common sentiment about distributive justice that underlies and founds the moral theory of process liberalism. There, legitimate ownership results from action, basically from free action. The “well-earned” qualificative indicates the time-regressive structure of the theory. Note, however, that people have neither made nor bought their own given capacities with which they produce or earn.

Process liberalism is a moral theory in social ethics, which is the moral valuation or hypostasis (or moral secular enshrinement) of process-freedom; that is, it consists of holding that individuals should be free to act and benefit from the consequences of their acts without forceful interference. Process liberalism has an important place in almost all societies because it defends a basic freedom and right. Moreover, process liberalism is the basic and central social-ethical theory of the modern world, a place and role it has been holding for the last couple of centuries. It is demanded by the classical “basic rights”, notably under the form of the respect of property. The full process-freedom it wants amounts to social freedom, although in focussing on some aspects and some applications, notably in the field of the economy. It will shortly be reminded that a consequence of process-freedom is the legitimacy of property rights acquired according to its rule, and of the corresponding free exchanges and free markets.

DIALOGICAL ETHICS

Consensus, information, communication, dialog

Endogenous social choice endorses the views common to the members of the considered society provided they are sufficiently informed and reflective (and other people's rights are respected). When these people disagree, they usually begin by discussing, trying to convince one another in exchanging information about facts, reasons, and values. This sometimes suffices to produce a consensus; at least, it often makes views and preferences closer to one another. Moreover, full relevant information is necessary for an ethical view which cannot rest on ignorance, mistaken beliefs, confusion, and misunderstanding. And, for social and notably distributive issues, full relevant information of an individual implies information about others that a priori only these others have. This may include knowing others' interests and situations, but it also includes information about others' views: formative information is about the reasons and other causes of others' social and ethical preferences, and empathetic information is about knowing others' corresponding feelings including feeling how they feel (Chapter 18). This essential information about others generally has to come directly or indirectly from them. Hence, communication involving society members has a basic role.

Therefore, the information transmitted is about facts, reasons, and also sentiments and feelings. The communication has to be mutual and reciprocal. It also generally takes an iterative form. Indeed, the information individuals want to transmit to others depends on what they know about others' information and judgments, as well as on their own information and judgments.

THE GENERAL CASE

The formalization of labour and productivity set up in Chapter 8 permits the precise presentation of the logic of the properties discussed in Chapter 7, in cases more general than those where labour is representable by a quantity or duration (possibly adjusted for differences in other characteristics) and output is proportional to it, which were the focus of Chapter 9. This is the topic of the present section, whereas Section 2 comes back to the case of unidimensional labour, but with a general production function, a case which will find an application in the treatment of involuntary unemployment in the next chapter.

The solution

Individuals in number n indexed by i each have a labour denoted as a set ℓi of chosen characteristics. Individual i working ℓi earns pi(ℓi, where pi is her production function. We have pi(0) = 0 (ℓi = 0 means that there is no labour: its duration is zero and the other characteristics are undetermined).

The obtained distributive justice consists of the equal sharing of the rent-rights in given productive capacities, that is, of the value of the production functions pi(). The value of these functions consists of the fact that they yield both income for labour and leisure for the labour necessary for obtaining a given output or income. This distributive allocation can only be in terms of the goods considered in the problem: income (or consumption goods) and leisure.