Anthony de Jasay

The Fat Cats, the Underdogs, and Social Justice

Anthony de Jasay*
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Except the stars of "showbiz" and spectator sports to whom all is forgiven, fat cats do not have a good press. Even those who have done great things, built and run vast and vastly productive organisations employing thousands of men and women who are all at least a little better off as a result,—even captains of industry are widely blamed for their income and wealth that is regarded as ranging from the provocative to the obscene. When, by a combination of gross collective misjudgment, ill luck, mass hysteria fostered by the perverse incentives governing the panic-mongering media and equally perverse solvency and accounting rules the fat cats of finance got themselves in deep trouble, the jubilant public all but cheered. Admittedly, as the music stopped, many bankers displayed singularly bad taste, but even perfect discretion would not have saved them from the detestation owed to fat cats.

At the other extremity of society, the underdog enjoys general sympathy. There is a presumption that he must be in the right and the top dog (or should it be overdog?) is in the wrong.

This is so not because of what either may have done, but because one is now beneath the other. The top dog may be blameless, but sympathy goes to the underdog and sympathy is easily mistaken for an imperative of justice.

All these sentiments and attitudes spring from deep-seated emotions that cloud cooler judgment. One such may be the shock and fear at the sight of gross inequalities of any kind that hurt what Isaiah Berlin called the "love of symmetry". Another may be the emotive appeal that playing Robin Hood holds for most of us (and hang the Sheriff of Nottingham). Half emotion and half calculation inspire the gut feeling that rich-to-poor redistribution enhances the common good (the "aggregate utility" of superannuated textbooks) while incidentally also raising the income of the person advocating it. Finally, pure emotion excites good old-fashioned envy; do down the fat cats, chop off the tall poppies even if the person feeling that way expects to reap no profit from it.

 

For more on the within-government rivalry, see Rent-Seek and You Will Find, by Mike Munger, July 3, 2006, and Rent Seeking, by David R. Henderson, Concise Encyclopedia of Economics.

Emotions are joined by expediency and both pull policy the same way. Under a democratic form of government, (though in a less overt fashion probably under any form of government), competition among leaders and their supporters for the capture and tenure of government takes the shape of an auction ring. Rivals seek to outbid each other by offering to buy enough support to form a majority coalition. They can pay for it by redistribution through both the revenue (taxation and deficit financing) and the spending (public goods and services) side. For obvious reasons, rich-to-poor redistribution can always beat poor-to-rich one. The auction ends for the time being, and a winning coalition is formed, when its marginal member cannot be bribed by a better offer to join a rival coalition. Normally, this will be the case when the winning coalition comprises half the voters plus one person, and its redistributive offer exhausts politically tolerated taxable capacity. Politics, of course, is less orderly than the tic-tac of this precision machinery, but they keep to the same beat.

Having got this far in setting out the emotional and the opportunistic springs of using political power to help the needy at the expense of the better-off, the scene is exposed in all its brazen moral nakedness. Emotion and expediency may fully account for what goes on, but is it ethically admissible, let alone mandatory? Is it in any rigorous sense just?

Redistribution has needed at least a fig-leaf of respectability. In social justice, it has been handed a moral garb offering more ample cover of irreproachable virtue.

The name—or might we say the brand?—"social justice" alone is of tremendous effect, a superb specimen of the successful semantic fraud. For by thus calling itself, social justice it is disguised as just one branch of justice, like commutative, civil or criminal justice, each dealing with a different subject matter but enjoying the same legitimacy and respect. Honourably opposing social justice is just as impossible as being against justice in general. All its branches are protected by the same shining armour.

 

For more on redistribution, see "Redistribution", by Dwight R. Lee, Concise Encyclopedia of Economics. For more by Anthony de Jasay on social justice, see his two-part article, "Economic Theories and Social Justice".

Social justice also calls itself distributive justice. The word "distributive" is supposed to point directly to its subject matter as "civil" or "criminal" point to theirs, whilst "social" points to everything and nothing and is just an almost meaningless decorative adjective. Perhaps because of that, social science writers prefer to use the word "distributive". However, that usage gives much of the game away. For any distribution of valuable things among individuals in a group is a result of property relations and contracts agreed on, and in the last analysis it is the result of the exercise of their freedoms. Protecting freedoms and barring unfreedoms is, in turn, the subject matter of all justice. Whether adjudicating property or liability claims, enforcing contracts or handing down verdicts and sentences, justice always distributes. Talking of "distributive" justice is like talking of wet water. Pretending that it is a distinct branch of justice is another form of the verbal fraud the advocates of social justice, mostly unbeknown to themselves, are putting across. But it is a less invulnerable form.

For what social justice, also known as distributive justice, does is to condemn and override the distribution that results from the operation of the rules of justice itself. It is not a branch of justice fitting harmoniously into its whole and enjoying its legitimacy; it is instead its antagonist seeking to undo what justice has done. It is frank and matter-of-fact to speak of this as redistribution, but fraudulent or at best question-begging to claim that it is social or distributive justice. The latter implies a moral claim superior to the moral claims of justice in general.

Social justice does appear to imply one moral claim that is distinctly its own, namely the obligation of charity to relieve absolute poverty, and hence the legitimacy of coercive taxation to that end. This supposes that voluntary charity is inadequate, that compulsory charity is preferable to it because it gives a right to charity to the poor, and that there is general agreement on where absolute poverty ends and relative poverty begins. It is a pity but a fact that no such general agreement is in sight and hence the obligation of charity is open-ended. In any event, however, only a small part of the practices of social justice can be imputed to it, for much if not most redistribution has little to do with the relief of poverty and a great deal with compulsory insurance against life's contingencies and evening out inequalities of many kinds.

In fact, social justice is identified in the public mind with concern for equality, and though the relation is not so straightforward as that, the prima facie dependence of social justice on some egalitarian warrant invites a closer look.

It is albeit sloppily and superficially but confidently treated as self-evident that an equal distribution of good (and also of bad) things among a given set of individuals is morally better than an unequal one. However, there is nothing self-evident about this proposition. There is not even a presumption of equality based on some asymmetry between equality and inequality in the same way as there is a logically derivable presumption for liberty, for title to possessions and for innocence. All the latter are based on claims to the contrary being verifiable but not falsifiable, hence on the burden of proof lying squarely with the accusation that can verify and not with the defence that cannot falsify the accusation.

No such asymmetry favours an equal distribution of goods, nor an unequal one. You can say that the distribution is to be equal unless sufficient reason is brought why it should be unequal. But you can no less sensibly say that it should be unequal unless sufficient reason is brought why it should be equal. The two statements are formally equivalent.

There is equivalence in form, which does not do much for social justice, but in substance the argument actually favours inequality. Real-world situations abound with reasons for inequality that explain why a given distribution is unequal. On a company payroll, some employees receive more pay because they worked longer hours, are more skilled, produce more, have served for more years or bear more responsibility. Some of the variables responsible for different pay scales may themselves differ as between persons, e.g. one skill or one responsibility may be greater than another. The payroll will show much apparent inequality and many naturally occurring reasons for it. It would have to be shown that they are insufficient and that simple equality ought to prevail instead. On the other hand, there are few or no real-world distributions, apart perhaps from small army units or prison camps, where simple equality reigns and sufficient reason for it occurs as a matter of course. For the egalitarian cause, there should be an overriding sufficient reason for equal distributions that is stronger than all the naturally occurring reasons for inequality and one that would justify political action to level them out.

 

Social justice is discussed in The Mirage of Social Justice, volume 2 of Law, Legislation and Liberty, by Friedrich A. Hayek. U. of Chicago Press, 1976, available through Amazon.com.

Yet it is hard to see where such an overriding reason could come from if not from high-flown rhetoric. Perhaps differences among men and their endowments are "morally arbitrary" (as Rawls as it), but what if they are? Perhaps "all men are created equal", but if they were, why are they manifestly unequal? People have by and large grown out of looking for the philosopher's stone. Why do they still keep looking for the self-evident moral truth of equality and its satellite, social justice?


* Anthony de Jasay is an Anglo-Hungarian economist living in France. He is the author, a.o., of The State (Oxford, 1985), Social Contract, Free Ride (Oxford 1989) and Against Politics (London,1997). His latest book, Justice and Its Surroundings, was published by Liberty Fund in the summer of 2002.

The State is also available online on this website.

For more articles by Anthony de Jasay, see the Archive.
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