[In Nozick’s theory]

Is Social Justice Just? A Review

Before one can answer the question posed by this excellent book’s title, one needs to ask what social justice is, and answering this proves to be no easy task. As Robert Whaples says, “For many, the term social justice is baffling and useless, with no real meaning. Most who use it argue that social justice is the moral fairness of the system of rules and norms that govern society.”

The book contains nineteen essays by distinguished scholars favorable to the free market. The essays attempt to determine what social justice is and to assess its merits. It contains, as well, a foreword by the famous psychologist Jordan Peterson, a preface by the eminent philosopher Nicholas Rescher, and a helpful introduction by Whaples in which he describes the main essays. The book has two parts, “How to Do (Social) Justice Wrong” and “How to do (Social) Justice Right” The latter part has two divisions, “Use the Insights of Philosophers and Theologians” and “Let People Build a Just Society on Their Own—and Reform Flawed Public Policies.”

Several of the contributors devote attention to Friedrich Hayek’s criticism of the notion of social justice in his book The Mirage of Social Justice (1976), and just as there is much disagreement among them about social justice, so is there also much disagreement about what Hayek meant and whether he was right. But though the authors differ on these points, they converge on the view stated in the second division of the second part. In what follows, I shall comment on one of the many interesting arguments contained in the book.

Pascal Salin quickly, and I think correctly, states the fundamental consideration that should govern our thinking about social justice. People own themselves and have the right to acquire unowned resources. They can also acquire resources through exchange, gifts, or inheritance. Claims that the outcomes of these transmissions of property are unfair do not suffice to justify coercion to compel property owners to transfer resources. In Salin’s words:

The basic principle of ethics consists in claiming that individuals are free, which means they are not subject to constraint by other people; that is, they are the owners of themselves. But one does not own himself if ever he is not the owner of the goods and services he creates by using his mind and physical labor. Therefore, it must be considered that legitimate property rights are those obtained by acts of creation (and, obviously, by exchanging goods and services that have been created by parties to the exchange).

Salin takes social justice claims to be demands that resources be transferred from property owners to others on the ground that those others are more deserving of them. For example, it might be said that members of certain minority groups have been discriminated against and should receive compensation for this. Salin does not object to people’s holding this view, but he opposes policies by government to implement it:

But someone who steals goods from a person to give the loot to another person—because his personal morality induces him to help the latter—violates the property rights of the first person and therefore universal morality. Now it is exactly the same with “inequality policies,” statesmen (politicians and bureaucrats) levy, thanks to coercion, resources from some people (known as citizens) to give them to others. In doing so, they undermine universal morality, and therefore we must accept the idea that a policy aimed at reducing inequalities is immoral in principle.

In a characteristically erudite essay, Jacob T. Levy raises an objection to the theory of rights just discussed, though his target is not Salin but Robert Nozick. Levy would object on the same ground to Murray Rothbard’s Lockean account of property rights. Levy adapts insights from Hayek and Joseph Schumpeter to formulate his complaint, which in essence is this: Nozick’s theory of rights, and theories similar to it, account for only a small amount of the economic value created in a market economy. Individuals who trade goods and services expect to gain by these trades, but often they have no way to estimate the future economic value of what they have exchanged. As Hayek has argued, the results of the market’s spontaneous order cannot be foretold. This unpredictability is exacerbated by the process of creative destruction stressed by Schumpeter, in which successful new enterprises produce vast amounts of increased economic value. This objection rests on a misunderstanding.

Levy says:

[In Nozick’s theory] Either I have mixed my labor with the world and produced a new thing to which I have an entitlement, or I have reached voluntary contractual relationships with others . . . to do so on my behalf, retaining for myself the entitlement to the new good. This cannot be, however, all there is to say about the matter, in part precisely because a market economy is a spontaneous order and, like all such orders, is very much more than an aggregation of its component microscale elements. To put it in different terms, it has been well known at least since Joseph Schumpeter that entrepreneurial innovation and technological development throw off tremendous positive externalities, creating much more wealth than the entrepreneur himself or herself will capture.

Lockean theories in the style of Rothbard and Nozick do not argue in this way: someone who appropriates resources has added to their value and thus owns that value. If the argument were of this sort, then Levy would have a point: What about value the appropriator did not create?

But the rights theories of Rothbard and Nozick is different. In this theory, once someone rightfully acquires an asset, this leaves no room for any questions about who owns the asset’s value. The value of an asset depends on the market demand for it, and this can rise or fall in unpredictable ways. If the owner of the asset sells it, he will get the market price for it, whether higher or lower than its value when he appropriated it. Thus, as Schumpeter posits, some people will gain “tremendous positive externalities” and those whose businesses have lost out will lose economic value; but neither of these facts raises a problem for Lockean accounts of property acquisition. Levy may respond that he has not sought only to point out an internal weakness in these accounts—namely, that they leave important questions about the ownership of economic value unaddressed. He could claim also that a good theory of ownership should not deal with economic value in the way I have suggested the theories of Rothbard and Nozick do. If he said that, though, he would owe us some arguments for this contention, and I do not see that he has provided any in his essay.

The book contains a very large number of other interesting arguments, and everyone interested in rights and justice should read it.