What, then, is justice, why do we get angry about injustice, and what is it that makes a social or economic arrangement unfair?
Uncovering a Traditional Model
In 1987, after presenting my first paper on fair withdrawal benefits from pension funds, I proposed a motion at the annual meeting of the Actuarial Society of South Africa that it set up a committee to define fair withdrawal benefits. I found a seconder for my motion before the meeting, but was surprised to get no other support. I was told that it was not possible to define what was fair.
Some profound changes had apparently occurred since the Actuarial Society had been founded in 1948 with the motto Aequitas (Latin for justice or fairness), which was in 1987 still prominent on its crest. Forty years earlier, at least some of the founders of the organization had believed that fairness was important. I cannot but refer to the “disquieting suggestion” made by philosopher Alasdair MacIntyre. He imagines a world where scientists have all been murdered and their laboratories and resources largely destroyed, but then people try to revive science. They know the words, but do not really understand the meaning. His suggestion is that the language of morality is currently a bit like this. Some of my actuarial colleagues had come to believe that fairness (or justice or equity) had no real meaning.
I was going to write that no one murders philosophers or lawyers like MacIntyre’s imaginary scientists, but this is not true. In particular, prophets or activists (depending on your perspective) who speak out against injustices are often silenced, ridiculed, or ignored. Many of those murdered by dictatorial regimes would surely fall into this category. Western democracies are not immune, as witnessed by Italian magistrates murdered by the Mafia. Working in finance does not usually make us vulnerable to physical risks, but we should not be surprised to face opposition when raising moral questions.
When I made my proposal to the Actuarial Society, I did not appreciate the extent to which the standard education of business professionals in the English-speaking world omitted consideration of economic justice. My own view of justice, formed by my Christian experience that emphasized the importance of the poor, was relatively unusual. I had thought everyone would have the same sense of the desirability of fairness.
It took me some while to get to a satisfactory definition of fairness that could apply to withdrawal benefits. I had the notion from my earlier reading of C. S. Lewis and G. K. Chesterton (both popular Christian writers) that there could be no innovative values. Values had to be both old-fashioned and universal because they identify personal and social flourishing irrespective of time and place. We will come back to this question later, but there is obviously no point in developing new theory when there might be a perfectly adequate one already. In fact, a lot of what I was looking for can be found in a good law course in Jurisprudence, and in the western philosophical tradition that goes back to Aristotle, but I had not been exposed to either. I blame this lack on having chosen a business degree, which left me ignorant of a great deal of useful and clear thinking on these subjects.
My philosopher friend, Graeme McLean, directed me to a book by J. R. Lucas, who provided the following encouragement to my quest:
Justice is the bond of society … We have … neglected the cardinal political virtue of justice, which, together with liberty, is the condition under which I can identify with society, feel at one with it, and accept its rulings as my own (1980, 18).
Lucas also points out that our feelings of indignation at injustice give the energy to do something about it, and help us identify what is at stake. Empirical surveys by sociologists confirm that this is not just philosophical speculation. (Although I can hear my classically trained friends retorting that recent research has only just brought the social sciences to insights that have been obvious for at least as long as humans have been writing!) Tyler and Smith put it:
People’s actual behavior is also strongly linked to views about justice and injustice. A wide variety of studies link justice judgments to positive behaviors such as willingness to accept third-party decisions; willingness to help the group; and willingness to empower group authorities. Conversely, other studies link the lack of justice to sabotage, theft, and on a collective level, to the willingness to rebel or protest. In other words, how people feel and behave in social settings is strongly shaped by judgments about justice and injustice (1998, 595).
Justice is the standard against which we measure the exercise of power by individuals, as well as the agreements and laws that exercise power over our lives. We use it also to measure the effect of our own actions on others, and to evaluate all elements of government action. It is consequently concerned with protecting the powerless against the powerful, or as Desmond Tutu has put it in his speeches: “concern for the poor, the hungry, the oppressed and the voiceless.”
The ancient consensus defines justice as giving to each his or her due. What is due to people subjected to the power of others? For a start, we owe others a measure of respect that arises from their essential dignity: to their ubuntu (an African word meaning humanness), flowing, if you are a believer, from our resemblance to the Creator.1 One can also argue from reciprocity: we need to be prepared to give others their due if we hope to receive what is due to us. The decision maker must hear all the parties and act reasonably, not capriciously (arbitrarily).
Acting reasonably requires a set of criteria against which to make judgments. The major criteria can be seen as aspirations, and are set out below. They may need to be traded off against each other, and trade-offs may vary. It is counter-productive to try to define them too tightly; there is no universal agreement as to definitions or relevance. Jesse Graham and his colleagues have usefully summarized psychological and sociological research showing the differences between people’s acceptance of these criteria and the links to personality traits, other beliefs, and culture. Most importantly, they report that most people do not take extreme views, and that views can change. I suggest that we should all see value in each of them. They are as follows:
• Liberty. Justice aspires that everyone be free of interference by others, including governments. Liberals (and libertarians) place a particular value on liberty and they are right in doing so. If we feel we need, for good reasons, to intervene in the lives of others, we should be especially conscious of our tendencies to arrogance, and scrupulously consider whether it is a cloak for furthering our own interests.
• Physical and social needs. If people cannot look after themselves, there are universal aspirations—set out in international agreements and, sometimes, in constitutions—that governments should seek to ensure basic needs are provided. The logical necessity is especially obvious for young children and the severely disabled. Obviously, there are differences of opinion about the level of basic needs, the extent to which some people cannot provide for themselves, and sometimes whether to protect people against themselves.
• Equality. Justice aspires to treat people equally unless there are good reasons for differential treatment. This is horizontal equity. Equality recognizes and even maximizes each person’s dignity. Democracy recognizes equality in that everyone has an equal vote, and almost everyone recognizes equality of opportunity as desirable. Vertical equity means that any difference in treatment ought to be proportionate to differences in the characteristics of the people concerned. It is inconsistent for the tax on income, for instance, to double when someone earns an extra 1 percent income. Differences arise over whether the reasons for the unequal treatment are valid or not. Equality of outcome, which requires differential treatment, is a fundamental value of those who would incline to the political left. There are, however, those on the right who seem at times not to recognize the desirability of equal economic and social outcomes. If you are in this camp (as many finance professionals and managers seem to be), let me ask you to take time out for reflection. Read the next paragraph, but then ask yourself what has led to your enjoying a higher income than those on whom you would look down?
• Just deserts.2 Justice desires that all people get what they deserve. This criterion covers both the rewards that follow our own efforts or sacrifices, and the penalties that follow destructive or malicious act, or making good the harms suffered by others. Ensuring the latter is the function of the courts in most societies. It does however go further. If I recognize the true dignity of every person, I must also recognize their right to choose and take their actions seriously. If they make a meal, it should be theirs to eat or share. If they break a window, they ought to fix it. Restorative justice and forgiveness, which requires an acknowledgment of desert on the side of perpetrator and the victim is discussed further in Chapter 10. For those on the left politically, perhaps you could consider how to fully deal with irresponsible decisions by people who are poorer—partly as a consequence of their decisions. In thinking about desert as a principle, we also need to recognize the tendency to see our own successes as entirely deserved (rather than incorporating at least an element of luck), and our failures as occurring when we are victims of external circumstances.3
• Efficiency. Efficiency includes lower costs and higher productivity, and recognizes materiality and avoidance of waste. Justice is often contrasted with efficiency, but I suggest that it is helpful to consider efficiency explicitly when evaluating alternatives. It seems fair to suggest that people might be prepared to make some sacrifices of the other criteria for greater output.
Figure 2.1 A Traditional Model of Justice
My understanding is that these criteria have absolute value: absolute because the virtuous person always aspires to meet them. Of course, compromise of some sort is often necessary. Justice is process-based; the just judge aspires to, carefully and reasonably, understand and address the rights, interests, and needs of every party.
Figure 2.1 shows the criteria with the Lady Justice, the image that for centuries has been placed outside law courts to personify the objective of justice, which illustrates the model being described here.
To illustrate the model, we can use it to consider the design of pension benefits. Justice may be irrelevant if the power of employers and employees are equal, but it is often the case that one group is able to exercise some collateral power over the others. To be fair, each of the criteria needs to be given weight:
• Liberty. Employees are free if they can resign whenever they want, and employers are free when they can hire and fire at will. If employees lose pension benefits when they resign, they are not fully free.
• Need. The benefits should match people’s needs, so it makes sense to include insurance for early death and disability.
• Equality. Equal pay for equal work and equal pensions for equal service. All other things equal, it would be good to given everyone equal pensions.
• Just deserts. From the perspective of actuarial equity, the discounted present value of the future benefits should be equal to the discounted present value of future contributions.
• Efficiency. Defined benefit funds, where the benefits were based on a simple formula, were more efficient than more complex defined contribution funds, where contributions had to be accumulated at the rate of return on investments.
The model allows for relatively a wide range of benefit design, as can be seen in different companies and countries. I was able to use the model of justice to satisfy myself that I was right to be indignant at the withdrawal benefits from pension funds I have described earlier. They were unfair because they offended against just deserts and vertical equity, without promoting any of the other criteria.
Comparing the Model
Graeme McLean organized for me to present my model to his colleagues in the Philosophy Department at the University of Witwatersrand, where I was then teaching. The challenge they gave me was to try to apply it widely and see if it worked. Over the years, I have applied it to benefit design and taxation questions, to considering the fairness of charging people different insurance premiums, to whether the new South African constitution was fair, and how to compensate managed fund investors for errors in their unit prices.
One interesting use arose from a submission I made to the South African Commission on the Remuneration of Representatives. The new ANC government had set up the Commission to determine the rate of pay of public representatives, including members of parliament. Press opinion was that their pay was too low, and many people were arguing that it should be significantly increased. There may have been some lobbying to this end. I felt that this opinion was unreasonable. They were already earning more than 96 percent of South Africans with jobs, let alone those unemployed. I used the model to argue—from equality, need, desert, and efficiency—that their salaries were, if anything, already too high. The Commission was sufficiently interested in the idea to pay me to fly down to Cape Town to explain my reasoning in more detail. It was gratifying that their recommendations for a relatively small increase appeared to have been influenced by my submissions to them.
The traditional model I have presented can be helpful, but how does it compare against alternatives? The best known modern academic model is that of John Rawls. The first difference is that Rawls does not accept just deserts. He wants to “distinguish between moral desert and legitimate expectations,” which is fair enough. But he goes further to suggest that “conscientious effort” could be seen as arising from moral desert and then makes the extraordinary assertion that:
it seems clear that the effort that a person is willing to make is influenced by his natural abilities and skills and the alternatives open to him. The better endowed are more likely, other things being equal, to strive conscientiously, and there seems to be no way to discount for their greater good fortune. The idea of rewarding desert is impracticable (1971, 312).
I find this patronizing as it implies that some poor souls cannot help themselves because they are naturally lazy.
The second difference is that Rawls uses a maximin criterion rather than the traditionally broader view of equality. The principle is to maximize the wealth of the poorest (those with the minimum). But maximin misses those in the lower middle part of the income distribution, who do not have the time or ability to speak up for themselves, and are ground down by low-paid jobs or extra family responsibilities. The many poverty traps in our often complex social security systems create difficulties for them. Poverty traps are high marginal rates of clawback of social security benefits or tax. Clawback rates in a number of countries can exceed 100 percent of earnings, so that lower income people go backward financially if they earn any money!
Academics other than Rawls have difficulties with the concept of just deserts. Some are mistakenly repelled by the idea because it is used to argue against the redistribution of wealth. Amartya Sen questions whether we can actually determine what people really deserve, and points out that the powerful people often “blame the victims” of bad luck and even of oppression. I have sympathy with this. The concept of just deserts also cannot justify the accumulation of large amounts of wealth if it impinges on the liberties of others. Nor should it be used as an argument for excessively harsh punishments for crime. Sen’s focus on people’s capabilities and their freedom to exercise their capabilities, presupposes, however, that they will enjoy the benefits of their capabilities. He therefore recognizes desert at some level.
On the other hand, there are those on the right who deny equality, and are reluctant to acknowledge special needs. They recognize freedom, desert, and efficiency as criteria, and they frequently see the preservation of property rights as critical to protect each of these. Ayn Rand is a favorite for some of this group. They seem reluctant to acknowledge that much of our wealth arises from good fortune, from common goods, or by the exploitation of others. Ayn Rand and her supporters argue that virtue consists in a proper concern for one’s own interest, and that modern societies’ apparently altruistic support for the poor undermines the development of true, generally capitalist, greatness. They may be partly right in wanting to protect property rights, but they seem to miss the logical necessity that everyone must occupy some property to live, and have some access to the economy if they are to survive—and seem to show little understanding of the difficulties faced by the poor.
Another approach to justice is the rights-based approach to social objectives, which uses the declaration of human rights, preferably embodied in a national constitution, as the basis for government action. This position is often taken by lawyers, especially those inclined to a more positive view of the law. They argue that there is no agreement on what constitutes natural justice so we should conform to current law, particularly as it is the embodiment of the opinion of the people as expressed through their elected representatives. I do not find this approach at all convincing, having first heard it from defenders of apartheid. There are times when laws are obviously unjust, and when they ought to be disobeyed. We should however do so reluctantly, not just because of the risks to ourselves, but also conscious of the possibility that we may be blind to our personal interests, and concerned not to disturb the peace of society by breaking legitimate laws.
Rawls’s and Sen’s criticism of the traditional model of justice do not add additional criteria, but raise questions to correct what they see as bias, which is fair enough. It is disturbing, however, that some critics of the traditional model of justice seem to be in danger of defending their personal interests. For instance:
• Academics, who tend to the left, are frequently supported by the taxes they argue for.
• Business people are most against higher tax rates in principle because they are the targets of the additional taxes in practice. They can be supported by Academics who hold value-neutral or right wing views and to whom they pay consulting fees.
• Lawyers are more inclined to raise the status of law.
• From right and left, there are those who seem not particularly concerned about freedom and are too quick to suggest intrusive regulation.
This is a call for us to examine our own motives. While I am not particularly challenged by those who would reduce the scope of the traditional model of justice, I am personally challenged as to the extent to which it falls short of the virtue of love, which Christian doctrine holds to be of more value than justice. I do want to challenge Christian readers who may tend to take the more comfortable line that the commandment to love replaces the imperative of social justice. They could also read John Howard Yoder’s The Politics of Jesus. Love has to act, “If anyone has material possessions and sees his brother in need but has no pity on him, how can the love of God be in him?”4 The criteria other than need are also present in the New Testament in practical terms. Paul argues that he would deserve a reward for preaching,5 that he wants generosity to lead to equality,6 while in his letter to Philemon he asks for the liberty of his slave. Other major religions are also sympathetic to this view of justice and love.
This brings us to the question of whether the concept of virtue, and justice, are universal and timeless. Do the virtues and justice apply to us as well as ancient Greeks, Chinese, and modern lawyers?
Universality?
I have referred to the positive psychology research on the universality of the virtues in the introduction. C. S. Lewis makes the case for the universality of many justice-related values in his little book The Abolition of Man. He includes the prohibition of murder and theft, and ways of enforcing promises. These justice-related values are obvious in the principles of professionalism that the International Actuarial Association recently produced for all its members. The Association has affiliates in 92 countries and says that they agree on ethical standards of integrity, independence, trustworthiness, and the obligation to act in the public interest. While recognizing differences in emphasis,
There do not appear to be material or cultural differences in views on what is ethical. No such differences have emerged during discussions in the Professionalism Committee, nor has anyone challenged this assertion … (2014, 7).
Other professions may not be quite as coordinated internationally as the actuaries, but we would probably be surprised if their standards were diametrically opposed to the actuarial standards.
People do place legitimately different personal and cultural weights on the elements of justice. Europeans appear to place a greater value on equality and a lower value on liberty than North Americans do. Trade union members usually place more emphasis on equality than managers do—and less on just deserts.7 Alisdair MacIntyre identifies a number of different intellectual traditions of justice within western philosophy, and more in other cultures. But there is probably universal agreement in all societies with a developed financial sector—as to what constitutes gross injustices, such as corruption, theft, and exploitation. There is also widespread agreement on the procedures required to attain justice as is evidenced by similarities in legal processes and structures.
Timeless?
G. K. Chesterton has the great line about timelessness of values (which he refers to as dogmas):
Some dogma, we are told, was credible in the twelfth century, but is not credible in the twentieth. You might as well say that a certain philosophy can be believed on Mondays, but cannot be believed on Tuesdays (1909, 135).
I must admit that I do not see this argument as conclusive as it once was. The last century has seen huge developments in technology and society that have changed, in some ways, the nature of our relationships with one another, and perhaps even our psychology. How much communication occurs through telephone and now video, through letters, e-mails, texts, and posts on blogs and personal sites? Interestingly, Chesterton also saw this coming in a prophetic lecture he gave in 1930. As described in a biography of him by Joseph Pearce:
The coming peril … was not Bolshevism because Bolshevism had now been tried and ‘the best way to destroy a Utopia is to establish it.’ … nor was the Coming peril another world war, although the next war ‘would happen when Germany tried to monkey about with the frontiers of Poland’. The coming peril was ‘the intellectual, educational, psychological and artistic overproduction, which, equally with economic overproduction, threatens the wellbeing of contemporary civilisation. People are inundated, blinded, deafened, and mentally paralysed by a flood of vulgar and tasteless externals, leaving them no time for leisure, thought, or creation from within themselves.’ The astounding perception of this speech, delivered three years before the Nazis came to power, nine years before the outbreak of war and many years before the final downfall of Communism’ … (1997, ix).
I think Chesterton was right on both counts. Values are timeless, but the “flood of externals” does mean that we face many more distractions from what is important. To go further: when the flood comes in the form of regulation it creates physical limitations on our freedom to flourish.
Evolutionary Arguments
This is perhaps the point to consider justice from an evolutionary perspective. If organisms evolve to better survive in an environment, surely societies evolve similarly. If so, there is a case that a belief in justice is necessary for people to identify and contribute willingly to society. Societies with a stronger general belief in justice may then prosper. One would expect unjust societies, where corruption, theft, and exploitation become rampant, to fail and be replaced by arrangements that are more just. This is difficult to prove because of the many variables to consider. Economic research does, nevertheless, tend to confirm that the elements of justice have a positive impact on society and the economy.8
That just societies are wealthier and happier does not provide a reason as to why we should, as individuals, aspire to act justly. In fact, if we were to take a narrow view of our own self-interest, we might well promote the view that others must be just (honest, and preferably trusting) so that we can more easily exploit them. We have to believe that integrity, justice, and the other virtues are worth more than pure material interests, which is why this chapter makes a case for the traditional model of justice without using arguments from narrow self-interest.
Chapter summary: Justice is the virtue that governs our power over others. It consists of giving everyone their due as much as possible: liberty, basic needs, equal status and happiness, and their just deserts. Justice is universally applicable as we only grow to our full stature when we contribute to communities which are places where the virtues flourish. It is required for societies to flourish.
1Philosopher and Theologian Nicholas Wolterstorff makes this argument.
2This criterion can be defined as being identical to justice or equity, and can be contrasted with equality—as in Graham et al.
3If you need convincing, read Daniel Kahneman’s Thinking, Fast and Slow.
4 John 3:17 (New International Version).
5 Corinthians 9:4ff.
6 Corinthians 8:13.
7See work by Sidney Verba and Gary Orren.
8Robert Barro’s papers provide a widely quoted evaluation of the effects of different factors on economic growth. He finds positive effects for economic freedom and the rule of law, but no real relationships for political democracy and equality, although he does find that economic growth may contribute later to democracy. I refer to both papers for anyone interested to note that the different mathematical models can ascribe different effects to the different variables. Models of this sort look at short periods and normally explain a small percentage of such variables as economic growth or democracy. Peter Swann warns that there is often more noise than signal in economic models, and the nature of the relationships can even reverse when you add further variables. They may well be missing important factors that could completely change the relationships reported.
Even if equality does not encourage growth, it is found to improve health (Wilkinson); to contribute to the development of mutual trust and social capital so discouraging crime (Uslaner); and because it leads to greater happiness (Layard)—although Alesina et al suggest that this does not apply universally. Tyler and Smith refer to extensive documentation of how feelings of relative rather than absolute deprivation underlie much social unrest: inequality seems to provide the spark.