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Social v. Economic Justice

by Carmine Gorga

Once upon a time there was a doctrine of economic justice, which ruled long-term government policies as well as daily business practices. It was created by Moses, Aristotle, and Jesus. It lasted three millennia nearly intact, at least in theory. It was destroyed, for his own good reasons, by Adam Smith and the Enlightenment.

The doctrine of social justice, instead, was created in the middle of the 19^th Century. If by the fruit you shall know the tree, I say categorically that this doctrine is no longer acceptable.

At the end of my presentation, you will know why I am so firmly opposed to this doctrine. Its acceptance prevents us from seeing the accumulated evidence of the damage that it does to society, to the understanding and administration of justice, and to the understanding and implementation of economic policies. Floating on these vast expanses of influence, the doctrine has helped create a society in which love has been reduced to sex and justice has been made an instrument of destruction of our political freedom and personal dignity.

If my points are not self-evident, allow me to explain.

In the process, please keep in mind that the certainty of my beliefs is always at 99.99%. Show me where I am wrong, and I will change my beliefs. I and my beliefs are not one; we are not an indivisible unit, whereby you destroy one and you destroy the other. No. My beliefs are one of my products. Destroy one of my beliefs, indeed, destroy all of my beliefs, and I am still left with the rest of my life intact.

So, allow me to explain. Those who believe in social justice, whether in full awareness of the consequences or not, separate love from justice, and make both these forces impotent. Love and justice are two virtues. They are strictly related to each other. One cannot exist without the other—and without the rest of all other virtues at the same time. The construct of social justice expunges love from the realm of societal relations—in practice, as distinguished from sentimental theory—and makes it a private toy for joy. Love means charity, charity toward those who are in need—in need of love, above all; and in need of money most of the time. Instead, many people despise the poor.

On the assumption that the government is taking care of the needs of the poor, too often we close our eyes and hearts and minds to the millions of people who need financial assistance in every part of the world these days. We overlook them most at dire moments in the business cycle, because their needs are the highest when our financial resources are the lowest; and we overlook them most in the richest countries of the world, because here all relationships have been reduced to financial relationships. Clearly, not much barter exists any longer in modern societies.

And since the poor are in the millions, governments are always powerless to help them. Indeed, the number of poor increases when governments have less power—at the bottom of business cycle. Then the poor increase the fastest and political games are most divisive.

So, how are governments supposed to take care of the poor? Frankly put, by robbing the rich. Government as thief does not provide a good example. When that occurs, most every citizen feels entitled to become a thief. Well, cheating on the payment of income tax is the lowest form of stealing, but it is stealing. You steal from the poor toward whom the tax revenue is supposed to be directed (the verification of this supposition calls for an entirely different discourse) and, in some proportion, you steal from your friends and relatives whose tax burden correspondingly increases.

Let us look closely at the mechanism through which governments, unavoidably, though with notorious exceptions take money mainly from the rich. Who else has more money? The most subtle and in the long run most damaging consequence is that in the process you frustrate the wealthy, because, even if they were to divest themselves of their last penny, they would barely make a dent in the mass of poverty.

Are the wealthy supposed to take it on the chin? No, of course the rich fight back. You would, too, if you were rich.

Where does the battle take place? In the halls of all three branches of the government. Let us first talk of the judicial halls, because it is the simplest case. Justices will not strike down laws that incorporate the stealing of money from the rich; no, they will uphold them. Yet, is not overtly approving of stealing a corruption of justice?

The most complex case is that of the executive. The executive enforces the laws at the point of the gun. The most painful, but unavoidable (yes, Virginia, unavoidable), case of the abuse of executive power is that of preventing street demonstrations from gaining power for We the People. Preservation of law and order is one of the highest responsibilities of government. (Of course, these are judgment calls).

The most talked about case of corruption, which is discussed every time everywhere, is that which occurs in the halls of the legislative power. It is there that most important decisions are made. It is there that the circle is closed: Legislators, the day after the election, extend their hand in search of campaign contributions for the next election cycle. That is the euphemism. The reality is this: Legislators tell the rich “Bribe me”. And rich people oblige them (what options do they have?). They give campaign contributions; they bribe them on the promise of getting a lower tax rate or a special tax loophole or even an outright grant of money as soon as decency allows and coalitions coalesce.

Are our elected representatives fully aware of these relationships? Perhaps, not! They must repress the vision of the reality. One of the most noble ways of serving society, that of evaluating the wisdom of laws and making laws, has helter-skelter been allowed to become at times one of the most degrading forms of earning a living. The “broken branch”, the most important branch of our government, is broke.

Perhaps it is members of the U.S. Congress who need to be liberated most.

Is this a wise way of governing society? Is there love in allowing our Representatives to be so frustrated, to be so prostrated to the whims of the wealthy? There must be a better way. And there is. This is the way of economic justice. This is a way of making each one of us fully responsible for our own actions.

Economic justice

All too briefly, since I have treated of it elsewhere at various levels of complexity, economic justice is composed of three planks: participative justice; distributive justice; and commutative justice. We all have the right to participate in the economic process; we all have the right to a distribution of the wealth that we have just created in proportion to the contribution we have made. In all exchanges (commutations) of wealth we all have the right to receive something in proportion to the value of what we have given.

How are we going to accomplish all this in the extraordinary complexity of a modern economy?

We are going to accomplish it day by day through the exercise of these four economic rights and responsibilities. Please, notice that rights and responsibilities stem from the use of the factors of production: land, labor, financial capital, and physical capital.

First set. We all have the right of access to natural resources. We all have the responsibility to pay taxes as compensation to the rest of the community for the exclusive use of those resources.

Second set. We all have the right of access to national credit, the power of the state to create money. We all have the responsibility to repay the loans—not grants—issued on the basis of national credit.

Third set. We all have the right to own the fruits of our labor. We all have the responsibility, if working with and for others, to offer services commensurate with the value of the reward received in the form of stocks—shares of ownership of corporations in which we work.

Fourth set. We all have the right to protect our wealth. We all have the responsibility to respect other people's possessions. See this especially in the buying and selling whole corporations.

If we implement these four marginal changes each day in all our own private and public actions, we are going to live in a regimen of economic justice. Is this not a regimen of political liberty and personal dignity for all—rich, middle class, and the poor? I bet all that is dear to me it is going to be so.

A Minimalist state

These recommendations make full economic sense in the context of a minimalist state. This is a conception that either is accepted at face value or requires much explanation. Its elaboration has to be left for another time. But its essential core can be enunciated here:

Get out of business, America!

Mr. Gorga would like to acknowledge the invaluable editorial assistance received from Peter J. Bearse and David S. Wise.

Carmine Gorga, a former Fulbright Scholar, is president of The Somist Institute, a research organization in Gloucester, Mass. Through The Economic Process, To My Polis, and numerous other publications in economic theory and policy, he has transformed economics from a linear to a relational discipline. Dr. Gorga blogs at www.a-new-economic-atlas.com and www.modern-moral-meditations.blogspot.com.