Alternative theories of Justice: Libertarian theories of justice (Nozick von Hayek), Contrattualism (Rawls), Sen

1
Alternative theories of Justice Libertarian
theories of justice (Nozick von Hayek),
Contrattualism (Rawls), Sen
POVERTY, INEQUALITY AND INCOME DISTRIBUTION
(30195) Academic year 2011/2012 Second Part Prof.
Renata Targetti Lenti (targetti_at_unipv.it)

• Lecture 5 25/11/2011

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• - Alkire S., Capability and Functionings
  Definition Justification, Briefing Note, HDCA,
  2005, http//www.capabilityapproach.com/pubs/HDCA_
  Briefing_Concepts.pdf
• - Sen A.K., Inequality Reexamined, Clarendon
  Press, Oxford, 1992, pp. 2-11, 39-55.
• - Zamagni S., Efficiency, Justice, Freedom A
  Perspective from Modern Economic Theory, Giornale
  degli Economisti e Annali di Economia, N.10-12,
  1993.

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Alternative theories of Justice.

• The difficulty involved in linking individual
  preferences and the social welfare function (the
  impossibility theorems) explains the recent
  interest in theories of justice alternatives to
  Utilitarism. The theories of justice which are
  more relevant in economics are
• 1) The libertarian theories (Nozick, Von Hayeck)
  
• 2) The neo-contractualist theory (Rawls)
• 3) The Sen approach.
• In particular the social primary goods approach
  (Rawls) and the capabilities approach (Sen) are
  considered alternative metrics to utility in
  building a theory of justice. Both are regarded
  as among the most important contemporary
  theories, and are part of the standard curriculum
  not only of students in philosophy, politics,
  economics, and other social sciences, but also in
  economics.

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• Within the process-oriented perspective two
  different positions are easily
• identifiable
• minimal State theorists, excellently represented
  by Nozicks work (1974). This work influenced a
  very known economist as Friedman.
• the second position is reflected in von Hayeks
  work (1960, 1982). This work influenced the
  Tachter policies in U.K.
• According to Nozicks theory justice is defined
  in a procedural sense, i.e.
• in terms of respect for the rules and procedures
  through which individuals
• acquire resources and rights. Liberty and rights
  are the constitutive
• components of an exclusive basal space in a
  theory of justice.

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• An extensive class of rights are treated as non
  relaxable. Either a right is violated, or it is
  not
• They are constraints that must be fulfilled
  and which, accordingly, bind political action.
  They must be protected indipendently by the
  nature of their results.
• The market is the only acceptable mechanism for
  the resource allocation process because only the
  market is compatible with the enforcement of
  freedom in a negative sense (i.e. not to be
  deprived).

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• The State intervention on distributive matters is
  very limited
• i) no subject can eventually be worse off than it
  would be in absence of public intervention.
• ii) moral evaluations and assumption of
  responsibilities are limited to individual
  actions.
• Nozick expresses the principles of justice which
  characterize his philosophical position in two
  statements that protect the property right
• 1) The principle of justice in acquisition which
  concerns the initial acquisition of property
• 2) The principle of justice in transfer which
  concerns the passage of property between
  different individuals.

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• Von Hayeck views the market chiefly as a dynamic
  process of discovery and of progress.
• His central arguments is that the free
  interaction among subjects on the market develops
  behavioural rules and institutional mechanisms
  allowing the enforcement of political order and
  the pursuit of societys economic progress.
• The essential assumptions are i) perfect
  competition ii) perfect information iii) the
  evolution of institutional mechanisms controlling
  the relationships between economic agents,
  thereby playing an eminently informational role.

8

• Von Hayek clearly distinguishes the spontaneous
  order as an unsought-for consequence of many
  individual actions, from organizations which
  instead are guided by human action deliberately
  pursuing certain targets.
• The society is a spontaneous order. To think of
  society as transformed into an organization
  brings to denying the principle of freedom and of
  individual autonomy.
• The survival principle is the criterium
  justifying actual market structures. Topics like
  distributive justice can receive attention only
  within organizations.
• To redistribute initial endowments could be
  justified to guarantee individual autonomy, but
  interventions in itinere cannot be accepted.

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• The main criticism to this theory are
• i)The fact that no specific agent can be held
  responsible for the results of the market
  processes does not imply that persons or
  institutions are relieved from the responsibility
  of mitigating them, also if they are negative if
  they are too unbalanced.
• ii) The neglect of human welfare and deprivation
  cannot be accepted in a theory of justice.
• In conclusion, the outstanding theoretical limit
  of the various positions reflected in a
  process-oriented perspective is that they could
  be useful for practical purposes (Social choice)
  only if all should accept, at least to a certain
  extent, the reasons of the end-state
  perspective, according to which the final
  outcomes of the allocative mechanisms should be
  judged only on the basis of a procedural basis
  and not in a substantial meaning. Under this
  respect also very unequal distribution of income
  and wealth can be justified.

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Rawls theory of justice

• Rawls states that a distribution is just when it
  is equitable, i.e. when it offers the same
  opportunities to all the members of the Society
  or, if this equality does not exist, the rules of
  the game foresee that the allocation of resources
  favours the least advantaged groups.
• The social choice criterion which emerges from
  this doctrine is that preference should be given
  to that distribution which benefits those
  individuals who occupy the lowest place on the
  social order.

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• The priority of liberty in the Rawlsian system
  is much less extensive and less restraining than
  in the libertarian arrangements.
• The rights that have a priority in this theory
  are fewer and less demanding than those in the
  libertarian proposals (and in particular do not
  include property rights in general).
• However, these circumscribed rights (concerning
  personal and basic political liberties) have
  complete precedence over other social concerns,
  including the fulfilment of our most elementary
  needs and reasoned desires.

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• Rawlss theory of justice,Justice as Fairness,
  was gradually developed in a series of articles,
  and especially in his book A Theory of Justice
  (originally published in 1971, with a revised
  English edition in 1999) which is considered by
  many political philosophers the most important
  book in moral and political philosophy of the
  20th century.
• What are the issues that Rawls wants to address?
  Social institutions and societal practices, such
  as the constitution, legislation, the labour
  market or the institutions of the welfare state,
  can be unfair, and may provoke resentment among
  the people who must live under those practices
  and institutions.

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• Rawls is trying to provide an answer to the
  question of how we can organise society in such a
  way that the principles of societal cooperation
  are fair and therefore accepted by everyone. It
  is in this sense that Rawls regards his work as
  being in the social contract tradition, since he
  wants to investigate the basic structure of a
  fair society which is organized to each persons
  mutual advantage.
• Rawls defines the basic structure of society as
  the way in which the main political and social
  institutions of society fit together into one
  system of social cooperation, and the way they
  assign basic rights and duties and regulate the
  division of advantages that arise from social
  cooperation over time.

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• A fair society can be the result of a
  mental-experiment called the original position.
  Citizens that partecipate to the State building
  must act behind the veil of ignorance. This
  veil of ignorance takes away our knowledge of our
  actual place in society, and any information
  about our sex, the colour of our skin, our
  profession, our natural abilities like
  intelligence or strength, and so forth.
• Behind the veil of ignorance we also dont know
  what our conception of a good life is. The reason
  that Rawls does not want to develop a theory that
  is skewed in favour of one particular notion of a
  good life. We do, however, know all the general
  facts about the society, such as basic economic
  and political principles, and we hold general
  knowledge about human psychology and about the
  relations between people and their social
  background.

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• Behind the veil of ignorance, the original
  position is set up in such a way that the moral
  conditions for a just society are met. We will
  not choose principles that are biased in favour
  of people with the talents, skills and personal
  characteristics that we ourselves have, nor will
  we prefer social institutions that are in favour
  of people with the notion of the good life that
  we endorse.
• As the parties in the original position have no
  information about their place in society,
  circumstances or life plans, the agreement that
  they will reach in the original position
  regarding principles of justice will be fair to
  everyone. Rawls believes that the principles of
  justice determined in such a manner will be
  stable, since they will (hypothetically) be
  chosen under conditions of freedom and equality,
  and thus command enduring support by all.

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• According to Rawls the following two principles
  of justice will be chosen
• 1. The first principle of justice states that
  each person has an equal right to the most
  extensive system of equal basic liberties
  compatible with a similar system of liberty for
  all.
• 2. The second principle of justice states that
  social and economic inequalities are to be
  arranged so that they are both 2a) to be
  attached to offices and positions open to all
  under conditions of fair equality of opportunity
  2b) and to be to the greatest benefit of the
  least advantaged members of society (the
  difference principle).

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• Rawls stresses repeatedly that the two principles
  have to be seen as working together. The first
  principle, that of equal basic liberties, has
  priority over the second principle in addition,
  the principle of fair equality of opportunity,
  has priority over the difference principle.
• Applying the difference principle requires
  interpersonal comparisons of some notion of
  advantage. Rawls holds that a persons advantage
  should be specified by social primary goods,
  which are all-purpose means that every person is
  presumed to want, as they are useful for a
  sufficiently wide range of ends.

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• The primary goods/basic liberties are listed as
  follows
• i) The basic liberties (freedom of thought and
  liberty of conscience, etc.) are the background
  institutions necessary for the development and
  exercise of the capacity to decide upon and
  revise, and rationally to pursue, a conception of
  the good.
• ii) Freedom of movement and free choice of
  occupation against a background of diverse
  opportunities are required for the pursuit of
  final ends as well as to give effect to a
  decision to revise and change them, if one so
  desires.

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• iv) Income and wealth are all-purpose means
  (having an exchange value) for achieving directly
  or indirectly a wide range of ends, whatever they
  happen to be.
• v) The social basis of self-respect are those
  aspects of basic institutions that are normally
  essential if citizens are to have a lively sense
  of their own worth as moral persons and to be
  able to realise their highest order interests and
  advance their ends with self confidence.
• Rawls considers the social bases of self-respect
  as probably the most important primary good, and
  argues that the best way to provide these bases
  is by treating every citizen as an equal, that
  is, by giving every citizen the same rights and
  liberties.

20

• Thus, based on Rawlss assumptions on human
  psychology, if both the first principle of
  justice and the principle of fair equality of
  opportunity are met, it follows that everyone is
  provided with the same social basis of
  self-respect. As a consequence, the difference
  principle will make interpersonal comparisons
  based on estimating the life-time expectations in
  terms of income and wealth.
• Based on Rawlss first outline of justice as
  fairness in A Theory of Justice, many readers
  have interpreted the primary good of income and
  wealth as net personal income and personal
  wealth. However, Rawls later clarified that the
  primary good of income and wealth also includes
  our partial control of the property and income of
  groups and associations to which we belong, and
  the goods and services provided to us by public
  goods or government spending

21

• Two aspects of Rawlss theory of justice may
  require special attention. First, the Rawlsian
  principles of justice apply not to all
  interactions between citizens, but only to the
  basic structure of society.
• Because basic structures can differ over time and
  space, it is not possible to list all the
  institutions of the basic structure in general.
  It is possible to select some, including the
  political constitution, and economic and social
  arrangements such as the legal protection of
  basic liberties, competitive markets and the
  family.

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• 1) Thus, in contrast to much other theorizing in
  contemporary moral and political philosophy that
  focuses primarily or exclusively on the
  distribution of particular goods and thus would
  fall under what Rawls calls allocative justice,
  Rawlss theory is a theory of institutional or
  political justice, but his principles
  nevertheless have clear consequences for the
  distribution of burdens and benefits in the
  society.

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• 2) Second, because Rawls is deeply concerned
  about the possibility for people with very
  different comprehensive moral views on the good
  life to come to a reasonable agreement on the
  principles of political justice, he stresses that
  the conception of justice must be public and that
  the information necessary to make a claim of
  injustice must be verifiable by all, and
  preferably easy to collect.
• A theory of social justice needs a public
  standard of interpersonal comparisons, as
  otherwise the obtained principles of justice
  between citizens with diverse views on the good
  life will not prove stable .

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• Primary goods are means, not ends. Nor do they
  reflect the freedoms that people have to pursue
  their ends.
• Since the conversion of these primary goods and
  resources into freedom of choice over alternative
  lives and achievements may vary from person to
  person, equality of holdings of primary goods or
  of resources can go hand in hand with serious
  inequalities in actual freedoms enjoyed by
  different persons.
• For example, a disabled person with a given
  basket of primary goods will enjoy less freedom
  in many significant respects than would an
  able-bodied person with an identical basket. An
  aged person with special difficulties would have
  a similar problem

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• There remain some difficulties in seeing justice
  entirely in terms of the Rawlsian principles and
  their implications for the basal space and focal
  combination.
• In response to some of the critiques on the
  original publication of A Theory of Justice,
  Rawls stressed that it is not real persons who
  are assumed to want those primary goods, but
  rather persons in their capacity as citizens.

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Alternatives optimum positions on the frontier of
the possible utilities
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• N initial position to be maintained according
  to Nozick (Minimal State).
• Bsolution corresponding to the acceptance of an
  utility based welfare function according to
  Bentham (a straight line with a pendency equal
  to1.
• R solution corresponding to the acceptance of
  an utility based welfare function according to
  Rawls.
• E solution corresponding to the acceptance of
  an utility based welfare function egalitarian.

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The Sen approach

• An approach, alternative to Rawls and to other
  theories of justice, has recently been developed
  by Amartya Sen in the book The Idea of Justice,
  who claims in contrast with most modern
  theories of justice which concentrate on the
  just society, this book is an attempt to
  investigate realization-based comparisons that
  focus on the advancement or retreat of justice
  (p.8)..
• If a theory of justice is to guide reasoned
  choice of policies, strategies or institutions,
  then the identification of fully just social
  arrangements is neither necessary nor
  sufficient(p.15)....What is needed instead is an
  agreement, based on public reasoning, on rankings
  of alternatives that can be realized. That is
  what is needed is a comparative approach which is
  central to the analytical discipline of social
  choice theory (p. 17).

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The impossibility of a Paretian Liberal

• According to Sen it is possible to overcome the
  difficulties which arise in the process of
  reaching the social agreement abandoning the
  utility criterion as the only informational basis
  for social choices. It is necessary to abandon
  the Pareto conditions, and to introduce some
  extra-utilitarian informations as ethical values
  and individual freedom. In The impossibility of a
  Paretian Liberal shows that if people can have
  any preferences they like, then the formal
  demands of Pareto optimality may conflict with
  some minimal demands of personal liberty (p.
  310).
• This theorem show that the introduction of rights
  into the process of social choice poses new
  problems to the economist compelling to take in
  consideration the nature of the social
  alternatives at stake. A result can be reached
  taking into consideration the extra-utilitarian
  informations.
• The informational focus, in a multidimensional
  space, for a theory of justice and/or for a
  social choice theory requires to decide which
  features of the world we should concentrate on in
  judging a society and in assessing justice and
  injustice. In contrast with the utility-based or
  resource-based lines of thinking, individual
  advantage is judged in the capability approach by
  a persons capability to do things he or she has
  reason to value (p. 231).

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• The capability and functionings approach, that
  was been developed in the previous book
  Inequality Reexamined (1992), becomes the basis
  for building a theory of justice in The Idea of
  Justice. In contrast with Rawls, instead of
  looking at peoples holdings of, or prospects for
  holding, income, wealth, primary goods, Sen
  claimed, it is necessary to look at what kinds of
  functionings they are able to achieve. In a good
  theory of well-being, account would have to be
  taken not only of the primary goods the persons
  respectively hold, but also of the relevant
  personal characteristics that govern the
  conversion of primary goods into the persons
  ability to promote her ends.
• The concept of functionings reflects the various
  things a person may value doing or being, varying
  from such elementary things as being adequately
  nourished, being in good health, avoiding
  escapable morbidity and premature mortality, etc.
  to more complex achievements such as being happy,
  having self-respect, taking part in the life of
  the community, and so on (Sen, 1992, p. 39).

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• Walking is a functioning, so are eating, reading,
  mountain climbing, and chatting. What matters to
  people is that they are able to achieve
• Yet when we make interpersonal comparisons of
  well-being we should find a measure which
  incorporates references to functionings, but also
  reflects the intuition that what matters is not
  merely achieving the functioning but being free
  to achieve it.
• So we should look at the freedom to achieve
  actual functionings, that is the actual living
  that people manage to achieve. or, to put it
  another way, substantive freedoms the
  capabilities to choose a life one has reason to
  value (Sen, 1992, p.5).

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• Incomes or commodities are only contingently
  important, mainly as instruments to reaching
  ends as an human development level. This issue is
  particularly relevant in the context of the
  informational basis of social justice.
• However, even if we are primarily interested in
  measuring or evaluating income distribution as
  such, the axiomatic approach call for information
  beyond the income space (ethical values). As Sen
  reminds income like wealth, is evidently not the
  good we are seeking for it is merely useful
  and for something else.

33

• A capability metric an objective metric. It is
  superior to any subjective metric because only it
  can satisfy the demand for a public criterion of
  justice for the basic structure of society.
• It is superior to a resource metric because it
  focuses on ends rather than on means and can
  better handle discrimination against the
  disabled. It is properly sensitive to individual
  variations in functioning that have democratic
  importance, and is well suited to guide the just
  delivery of public services, especially in health
  and education.

34
The differences with the Rawls primary goods
approach.

• In his 1979 Tanner lecture entitled Equality of
  What?, Sen (1980) presented the capability
  metric as an alternative for, and improvement on,
  the social primary goods metric. Sen argued that
  the primary goods approach seems to take little
  note of the diversity of human beings.
• If people were basically very similar, then an
  index of primary goods might be quite a good way
  of judging advantage. But, in fact, people seem
  to have very different needs varying with health,
  longevity, climatic conditions, location, work
  conditions, temperament, and even body size. So
  what is involved is not merely ignoring a few
  hard cases, but overlooking very widespread and
  real differences (Sen 1980, pp. 21516).

35

• By proposing a fundamental shift in the focus of
  attention from the means of living to the actual
  opportunities a person has, the capability
  approach aims at a fairly radical change in the
  standard evaluative approaches widely used in
  economics and social studies.
• It also initiates a very substantial departure
  from the means orientation in some of the
  standard approaches in political philosophy, for
  example John Rawlss focus on primary goods
  (incorporated in his Difference Principle) in
  assessing distributional issues in his theory of
  justice.
• Rawlss focus on primary goods is more inclusive
  than income (indeed, income is only one of its
  constituents), but the identification of primary
  goods is still guided, in Rawlsian analysis, by
  his search for general all-purpose means, of
  which income and wealth are particular and
  particularly important examples.

36

• Primary goods are not valuable in themselves, but
  they can, to varying extents, help the pursuit of
  what we really value. Nevertheless, even though
  primary goods are, at best, means to the valued
  ends of human life, they themselves have been
  seen as the primary indicator of judging
  distributional equity in the Rawlsian principles
  of justice.
• In his Tanner lecture Sen asked how the disabled
  would fare under the difference principle which
  judges peoples position in terms of social
  primary goods. The answer is clear there is non
  space for disabilities. A person with a
  disability, however severe, would not have a
  claim to additional resources grounded in his
  impairment under Rawlss two principles of
  justice. Sen argues that Rawlss difference
  principle would not justify any redistribution to
  the disabled on grounds of disability.

37

• Rawlss strategy has been to postpone the
  question of our obligations towards the disabled,
  and exclude them from the scope of his theory.
  Rawls certainly does not want to deny our moral
  duties towards the people that fall outside the
  scope of his theory, but he thinks that we should
  first work out a robust and convincing theory of
  justice for the normal cases and only then try
  to extend it to the more extreme cases
• Sens critique, however, was not only about the
  case of the severely disabled. Sens more general
  critique concerned what he saw as the
  inflexibility of primary goods as a metric of
  justice. Sen believes that the more general
  problem with the use of primary goods is that it
  cannot adequately deal with the pervasive
  inter-individual differences between people.
  Primary goods, he argues, cannot adequately
  account for differences among individuals in
  their abilities to convert these primary goods
  into what people are able to be and to do in
  their lives.

38

• According to Sen we should focus directly on
  peoples beings and doings, that is, on their
  capabilities to function. Primary goods are among
  the valuable means to pursue ones life plan. But
  the real opportunities or possibilities that a
  person has to pursue her own life plan, are not
  only influenced by the primary goods that she
  has at her disposal, but also by a range of
  factors that determine to what extent she can use
  these primary goods to generate valuable states
  of being and doing.
• Hence, Sen claims that we should focus on the
  extent of substantive freedom that a person
  effectively has, i.e. her capabilities in
  converting goods in functionings. The factors
  which influence the conversion rate are
• i) subjective features as age, sex, health
• ii) householdstructure and intra-household
  relationships iii)external circustances.

39
(No Transcript)
40
The choice of the capabilities set

• The functionings on which human flourishing
  depend include such elementary things as being
  alive, being well nourished and in good health,
  moving about freely, and so on. It can also
  include more complex functionings such as having
  self-respect and respect of others, and taking
  part in the life of the community.
• There are many technical issues in the
  specification and analysis of functionings and
  capabilities, but the central idea is to see the
  basal space in terms of what people are able to
  be, or do (rather than in terms of the means they
  possess).
• In this view, individual claims are to be
  assessed not only by the incomes, resources or
  primary goods the persons respectively have, nor
  only with reference to the utilities they enjoy,
  but in terms of the freedoms they actually have
  to choose between different ways of living they
  can have reason to value.

41

• In the move from the basal space of primary goods
  to that of functionings and capabilities, there
  are two distinct steps. First, the basic shift is
  from the space of an individuals primary goods
  space (where each dimensions represents a primary
  good held by that individual) to the space where
  the dimensions stand for distinct functionings
  enjoyed by that person.
• The second step is to see the interpersonal basal
  space in terms of individual indices of primary
  of achieved functionings or capabilities.
• The possibility of practical use is limited both
  by data availability and the ambiguities of parts
  subject matter (so that the practical uses have
  tended to be confined to a limited class of
  variables which are more precisely obtainable,
  such as life expectancy).

42

• The practical value of these approaches lies in
  pointing to the relevance of some crucial
  information neglected in standard welfare
  economics as well as the main theories of
  justice, than in making great formal use of these
  spaces. The need to go beyond the income space de
  immediately translate itself into an alternative
  space of the same degree of articulation.
• Sen argues that there cannot be a canonical
  list the set of focal functionings or
  capabilities that people value will have to be
  set and re-set again and again, depending on the
  prevailing collective values. It can be the end
  of a process of social choice.

43

• Capabilities will have to be selected by a
  community, by a team, or by a researcher. The key
  questions to keep in mind when selecting
  capabilities are
• i)which capabilities do the people who will enjoy
  them value (and attach a high priority to). Often
  this must be explored directly.
• ii)which capabilities are relevant to the policy,
  project, or institution which may be affected
  directly or indirectly.

44
The Human Development Index (HDI)

• A good example of this process would be the Human
  Development Index (HDI). Its authors wanted a
  very crude index, but one that was a better
  indicator of well-being and capability than GNP
  per capita, and could be built using data that
  were available for most countries in the world.
  The resulting HDI includes income, literacy and
  schooling, and life expectancy not because
  these alone are important, but because they give
  a better indication of well-being than income
  alone.

45
Martha Nussbaum approach

• Martha Nussbaum, on the opposite, has proposed
  ten central human capabilities that should
  provide the basis for constitutional principles
  that should be respected and implemented by the
  governments of all nations. Like the Universal
  Declaration of Human Rights which is perhaps
  the most famous of lists these ten capabilities
  could draw attention within the legal framework
  to things people value.

46
Poverty

• The identification of poverty with low income is
  well established, but there is, by now, quite a
  substantial literature on its inadequacies.
• The capability approach can be very useful also
  for analyzing and measuring poverty.
• Poverty is considered as the situation in which
  the level of basic functionings is under a
  minimum value. Poverty has an absolute meaning in
  the space of functioning, and a relative meaning
  with reference to the cultural setting.

47
Disability

• A person with severe disability cannot be judged
  to be more advantaged merely because she has a
  larger income or wealth than her able-bodied
  neighbour. Indeed, a richer person with
  disability may be subject to many restraints that
  the poorer person without the physical
  disadvantage may not have. In judging the
  advantages that the different people have
  compared with each other, we have to look at the
  overall capabilities they manage to enjoy.