Freedom and Economic Order

by Linda C Raeder

  Altruism

  We have seen that both distribution and redistribution of material resources in society entail governmental control and direction of resources, that is, government, and not private individuals, possesses ultimate decision rights over the resources under its control. We have also seen that government in a free society possesses few if any resources of its own, which means that funding for its activity must be obtained from private citizens in one manner or another. In a pure communist society, government simply abolishes private property and appropriates all the citizens’ resources to itself. In both socialized and mixed-economies such as the United States government typically acquires resources by taxation, borrowing, and/or money creation. In all cases government obtains the bulk of the resources under its control from private citizens, either directly or indirectly, whether through outright confiscation or the other methods previously discussed.[104] Pure communism, as we have seen, involves the distribution of such acquired resources by a central political authority; socialism and mixed economy involve the redistribution of such resources from one group of citizens to another via the political process. Our present concern is the morality of redistribution in a mixed economy, by far the most prevalent means of realizing socialist or quasi-socialist aspirations in modern Western society, including the United States. Few contemporary persons, as noted, openly advocate pure communism on the Soviet or North Korean model.

  The morality of socialism is often cast as a morality of altruism, a term coined by Auguste Comte, previously encountered in our discussion of early socialism.[105] Altruism (“of or to others“) was a central element of the novel morality constructed by Comte and other ideologues of the era as a substitute or replacement for traditional Judeo-Christian ethics. Morality in the West is of course traditionally conceived as originating in the God of the Bible. Comte and fellow travelers relentlessly castigated such theologically based morality as selfish and egoistic, morally suspect and base, springing not from purity of heart but rather venal expectation of heavenly reward. The novel morality of altruism, by contrast, was portrayed as sublime and unselfish, concerned not with the individual’s personal welfare but rather the welfare of “others.” The putatively selfless morality of altruism was sometimes referred to as “social” morality and aligned with a correlative novelty of the era—the so-called Religion of Humanity, the “social” or “Positive” Religion also constructed by Comte and whose adherents were exhorted to “Live for Others.”[106] The moral and religious aspirations embodied in altruistic Humanism achieved wide currency throughout the course of the nineteenth century. Indeed, over time, the concept of the “moral” came more or less to be identified with or supplanted by the concept of the “social.” Such is evident, for instance, in the decline of what the nineteenth century called the “moral sciences” (economics, political economy, and related disciplines) and correlative rise of the so-called “social sciences” of the twentieth century and beyond. The triumph of “social” over traditional (personal) morality in Western society is further evidenced by contemporary usage, which often employs the term social to convey implicit moral praise. Individuals who are “socially responsible,” guided by a “social conscience” and concerned with “social” problems are typically held in high esteem, associated with noble and high-minded purpose, indeed with the pursuit of “social justice.”

  The majority of persons who champion contemporary “social” values, however, are probably unaware of their origin, namely, as deliberate moral constructions intended to replace traditional Judeo-Christian ethics. The new virtue of altruism and related moral obligation to “live for others” arose as rivals to and substitutes for traditional Western morality, historically grounded in the transcendent God of the Bible. Altruism and related virtues were intended to form the basis of a naturalistic morality—non-theological, “terrestrial,” or “strictly human”—that was henceforth to serve, as J.S. Mill explained, as “the law of our lives.” The social morality crafted by Comte and disciples, like the ethics of socialism proper, was portrayed as a decided moral advance over the purportedly selfish and individualistic personal morality associated with the Judeo-Christian tradition. Marx’s assertion of the moral superiority of socialism would prove enormously influential, but he was neither the first nor the only advocate of the social morality that captured minds and hearts of the era. The ground for the Marxian evangel was well prepared by the St. Simonian and Comtean prophets of altruism and Humanity, among others.

  Socialist aspirations of all kinds, Marxist or otherwise, are not only wedded to the notion of a superior social morality but also imbued with profound moral expectations. The replacement of Judeo-Christian with social ethics will replace selfish concern for the mere individual with altruistic concern for the good of the whole. They further involve profound political consequences. It seemed apparent to carriers of such aspirations that their social goal—selfless concern for the welfare of society as a whole—could only be realized by means of expanded and activist government. Such was certainly the conclusion drawn by Comte and Marx, as well as American champions of the novel social ethos, in particular, the so-called Social Gospelers and Progressives of the era who will be extensively discussed in Volume III. Both groups were important carriers of naturalistic social morality in the American context, and both assumed that only government possesses the broad perspective and necessary means to ensure the social good, that is, to ensure social justice.

  Justice of course is a prime moral virtue. Thus it is not surprising that the concept of justice, like morality more generally, would undergo transformation under dispensation of the Religion of Humanity and the social morality it embodied. Traditional justice—capitalist justice—and especially its valorization of individual rights to life, liberty, and property, was denigrated as a relic of the selfish and individualistic Judeo-Christian worldview, in particular, Christianity, the very Religion of the Selfish. [107] The moral advance putatively represented by social morality and justice would transcend the egoism regarded as intrinsic to the biblical worldview, especially its specifically Christian dimension. Justice would no longer serve mere self-regarding interests—individual property and profits—but rather secure an altruistic sharing among the whole. Justice, in other words, was transformed into social justice. The term was (and is) rarely defined with precision but, as we shall see, the demand for social justice invariably involves the demand for greater equalization of material wealth across members of society, to be achieved by means of expanded government. The market process, as we have seen, inevitably results in an unequal pattern of material distribution, and only government possesses the means—the coercive sanction of law—to override such results. Only government, therefore, is capable of rectifying the social injustice allegedly intrinsic to capitalism. Such a conclusion leads back to the central moral question raised by any ethic of redistribution: Does the end—greater equalization of wealth, whether in pursuit of the communist paradise or an altruistic social justice—justify the means?

  The Demand for Social Justice

  The demand for social justice, however vaguely conceived or articulated, is invariably a demand for a fair or just distribution of material wealth or resources across society. Any such demand, whatever its particular form, stems from the belief that the existing distribution of income or wealth in a given society is unfair, unjust, wrong from a moral point of view. The first problem that arises from any demand for social justice is the difficulty of determining the constitution of a “fair” or “just” distribution of wealth. According to philosopher Immanuel Kant (1724-1804), such a problem is insoluble. “Welfare,” he observed, “has no principle,” in other words, there is no objective standard by which to determine the substantive content of a “just” distribution of material resources (“welfare”). Every individual will hold a subjective view of what might constitute a “fair” pattern of material distribution. One person may believe that fairness demands radical material equal
ity; everyone should be provided with identical amounts of rice, milk, oil, shoes, electricity, and so on. Another person may think it “fair” that individuals who have earned doctoral degrees be provided with greater resources than individuals with a grade-school education. Yet another person may think the opposite—fairness demands that the less educated be provided with more than the better educated. A person who loves animals may think it “fair” that he be provided with a hundred cans of cat food and two hundred pounds of birdseed each month to feed his beloved cats and ducks. Who is to say that he or any of the others are wrong? By what objective measure can such competing conceptions of fairness be evaluated? The simple but decisive answer is that no such measure exists—“welfare has no principle.” Human beings possess no means of objectively determining which of competing conceptions of material distribution better serves “social” fairness or justice. Such a conclusion follows from the fact previously discussed in another context: economic value, the value of material goods and services, is always, like beauty, subjective value; the value of any economic good is never inherent to that good but always imputed by a human perceiver. Every demand for social justice is thus ultimately and inescapably subjective, that is, a demand for the particular distribution of material goods and services favored by the person making the demand.

  Nevertheless, all demands for social justice, however substantively particular or unique, do share a universal attribute, namely, the aforementioned demand for a pre-determined concrete pattern of resource distribution. Moreover, while such patterns will vary according to personal subjective preference, their achievement can be accomplished in one and only one way—governmental control of resources. The market, ordered through voluntary exchange, does not and cannot produce a pre-conceived pattern of material distribution, whatever its particular substantive content. For that reason, whether apprehended by its advocates or not, the demand for social justice is always and inevitably a simultaneous demand for governmental direction of resources, whether achieved by outright command-and-control or taxation, regulation, or other forms of legislative enactment. Social justice and political distribution or redistribution of material resources are two sides of the same coin.

  We have discussed the problems that plague every form of centralized economic decision-making, in particular, the fact that government officials or planners have no means of acquiring the knowledge that would be necessary to meet the subjective needs and desires of millions of people in the absence of the information embodied in a prevailing structure of relative prices. Central planners must work in the dark, merely guessing or, worse, imposing their personal subjective preferences on society as a whole. Such, however, is precisely what is demanded by advocates of social justice, however well their subjective preferences are veiled behind the cloak of “justice” and however unaware they may be of the implications of their demands. If successful, that is, if certain individuals or groups obtain political power sufficient to impose their subjective conception of social justice on their fellow men, then all persons who hold different conceptions of justice, traditional or social, will find their individual freedom curtailed or even eliminated. They will be forced to implement the vision of the politically successful advocates of social justice, which means they will be required to serve, not their own values and purposes, but rather values and purposes chosen and imposed upon them by others. The advocacy of social justice thus raises a profound moral concern. The question is whether individuals are morally obligated to obey the commands of a political authority intent on imposing a particular vision of social justice, a vision that can never be more than merely subjective or arbitrary preference.

  Social Justice in Practice

  A concrete example may further clarify the moral issues involved in the pursuit of social justice. Let us assume the existence of an individual, say, a professor of political philosophy, who is fervently committed to the realization of social justice. The professor, like most other people, is fully aware that basketball players in the United States earn much higher salaries than scholars who write philosophical treatises on freedom. The professor is firmly convinced that such a situation is unjust. Philosophy, he maintains, is far more important to society than basketball, and the enormous disparity of income between scholars and basketball players is wrong; it is unfair. The scholar devotes decades of his life to the pursuit of learning, years of sacrificial solitude spent in study and writing, contributing his abilities to society at great personal and financial cost. The income he earns for such prodigious effort, however, barely enables him to pay the rent.

  Basketball players, by contrast, generally have little education; indeed many have simply been born with a talent that others, such as scholars, do not possess, but for which they earn many millions of dollars in the market. Is it fair than an accident of birth (genetic endowment) should provide such enormous material advantages to some persons, advantages denied to others? Indeed, is it fair that basketball, a mere recreational activity, should be financially rewarded so much more highly than scholarship, the discovery of knowledge? The professor does not think so. He demands that justice be served—social justice. The achievement of social justice, in this case, will require redistribution of wealth according to the professor’s preferred pattern of distribution: scholars should receive more, basketball players less. The fairest way to achieve such an outcome, the professor believes, is to transfer a portion of the players’ income to scholars. The scholars deserve it, considering not only their hard work but also the value of their contribution to society, which, the professor maintains, is far greater than the value of mere basketball. Such is the professor’s vision of social justice, and it is impossible to convince him otherwise.

  Further suppose that the professor’s passion for social justice inspires him to make common cause with a charismatic politician who also believes the prevailing pattern of material distribution is unfair. The politician campaigns on a platform of social justice and manages to persuade a majority of voters of the justice of redistribution as proposed by the professor. He wins the election and is instrumental in the passage of legislation that limits the maximum salary of any basketball player to, say, $200,000 a year. The legislation further establishes a maximum price (“price ceiling”) that may be charged for admission to any basketball game. Such a provision aims to prevent the organizers of such games from making “excessive” (unfair) profits or perhaps to make basketball affordable for lower-income people. Finally, the legislation also increases tax rates on income earned through basketball and creates a new entitlement program for scholars and professors; the tax revenue so obtained will be transferred, redistributed, from basketball players to scholars and professors. The professor and politician can claim a moral victory; they believe social justice has been achieved, as does the majority who supported the legislation. The basketball players and organizers may have a different view.

  Every act of political redistribution of wealth raises issues concerning both justice and freedom. Such is more clearly perceived by recalling the manner in which income is determined in a market economy. It is true that successful basketball players in a capitalist economy typically earn higher income than scholars or philosophers. As we recall, however, the income of both groups is determined not by the personal decision of any human authority but rather impersonal market forces, that is, the voluntary choices of consumers of the two goods—basketball games and scholarly treatises. The fact that basketball players earn more than scholars results from the fact that many market participants place a higher value on basketball than philosophy or scholarship. More buyers voluntarily choose to spend their income on basketball games than philosophical expositions. This and this alone—the difference in the value subjectively imputed by the consumers to the two goods—is the “cause” of the disparity in income between basketball players and scholars. No human authority decided that basketball players should earn a greater income than scholars. The consumers of basketball games mere
ly aim to enjoy the performance, not determine the players’ income. Consumers who shun the professor’s books and lectures do so for lack of interest, not to determine his income. The income disparity between basketball players and scholars is an impersonal and unintended consequence of the simple fact that many Americans prefer basketball to philosophy.

  The professor’s demand for greater equalization of wealth between basketball players and scholars, then, is a demand that the voluntary choices of consumers be overridden by political power. It is implicitly to assert that consumers are wrong to prefer basketball to philosophy. The professor obviously believes that their consumption choices are in error, that consumers should value philosophy more than basketball, as he himself does. But he obviously does not believe in individual liberty. His action—his pursuit of social justice—demonstrates his willingness to use the force of law to coerce other people to adopt his values and purposes rather than allowing them to pursue their own. Those who do not value scholarship over basketball will be forced to do so by the political transfer of wealth from basketball players to scholars. Part of the income that would accrue to basketball players in a free market will be taken from them and redistributed to the professor and his colleagues.

  Demands for redistribution of wealth always involve the presumption that some people know what a proper or moral distribution of wealth in society should be. We previously noted the similarity between such an assumption and that implicit in central economic planning. In a communist society, government planners decide what will be produced and who will receive it, plans that embody the planners’ subjective vision (“knowledge”) of the proper pattern of material distribution. In a mixed economy such as the United States, policies of redistribution embody a similarly subjective vision. In either case, comprehensive central planning or a more limited redistribution of wealth, the voluntary choices of consumers are overridden by political will, a will that embodies the planners’ or legislators’ vision (“knowledge”) of what material distribution should be, that is, their subjective and arbitrary vision of social justice.