Justice (economics)
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Justice Justice, in its broadest sense, is the principle that people receive that which they deserve, with the interpretation of what then constitutes "deserving" being impacted upon by numerous fields, with many differing viewpoints and perspective ...
in
economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...
is a subcategory of
welfare economics Welfare economics is a branch of economics that uses microeconomic techniques to evaluate well-being (welfare) at the aggregate (economy-wide) level. Attempting to apply the principles of welfare economics gives rise to the field of public econ ...
. It is a "set of moral and ethical principles for building economic institutions". Economic justice aims to create opportunities for every person to have a dignified, productive and creative life that extends beyond simple economics. Models of economic justice frequently
represent Represent may refer to: * ''Represent'' (Compton's Most Wanted album) or the title song, 2000 * ''Represent'' (Fat Joe album), 1993 * ''Represent'', an album by DJ Magic Mike, 1994 * "Represent" (song), by Nas, 1994 * "Represent", a song by the ...
the ethical-social
requirements In product development and process optimization, a requirement is a singular documented physical or functional need that a particular design, product or process aims to satisfy. It is commonly used in a formal sense in engineering design, includi ...
of a given theory, whether "in the large", as of a just
social order The term social order can be used in two senses: In the first sense, it refers to a particular system of social structures and institutions. Examples are the ancient, the feudal, and the capitalist social order. In the second sense, social order ...
, or "in the small", as in the
equity Equity may refer to: Finance, accounting and ownership * Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other value to a business ** Home equity, the dif ...
of "how institutions distribute specific benefits and burdens". That theory may or may not elicit acceptance. In the Journal of Economic Literature classification codes 'justice' is scrolled to at JEL: D63, wedged on the same line between '
Equity Equity may refer to: Finance, accounting and ownership * Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other value to a business ** Home equity, the dif ...
' and '
Inequality Inequality may refer to: Economics * Attention inequality, unequal distribution of attention across users, groups of people, issues in etc. in attention economy * Economic inequality, difference in economic well-being between population groups * ...
' along with 'Other Normative Criteria and Measurement'. Categories above and below the line are
Externalities In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced goods involved in either co ...
and
Altruism Altruism is the principle and moral practice of concern for the welfare and/or happiness of other human beings or animals, resulting in a quality of life both material and spiritual. It is a traditional virtue in many cultures and a core as ...
. Some ideas about justice and ethics overlap with the origins of economic thought, often as to
distributive justice Distributive justice concerns the socially just allocation of resources. Often contrasted with just process, which is concerned with the administration of law, distributive justice concentrates on outcomes. This subject has been given considera ...
and sometimes as to Marxian analysis. The subject is a topic of
normative economics Normative economics (as opposed to positive economics) is the part of economics that deals with normative statements. It focuses on the idea of fairness and what the outcome of the economy or goals of public policy ''ought to be''.Paul A. Samuelson ...
and
philosophy and economics Philosophy and economics studies topics such as public economics, behavioural economics, rationality, justice, history of economic thought, rational choice, the appraisal of economic outcomes, institutions and processes, the status of highly ide ...
. In early welfare economics, where mentioned, 'justice' was little distinguished from maximization of all individual utility functions or a
social welfare function In welfare economics, a social welfare function is a function that ranks social states (alternative complete descriptions of the society) as less desirable, more desirable, or indifferent for every possible pair of social states. Inputs of the fu ...
. As to the latter,
Paul Samuelson Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist who was the first American to win the Nobel Memorial Prize in Economic Sciences. When awarding the prize in 1970, the Swedish Royal Academies stated that he "h ...
(1947), expanding on work of
Abram Bergson Abram Bergson (born Abram Burk, April 21, 1914 in Baltimore, Maryland – April 23, 2003 in Cambridge, Massachusetts) was an American economist, academician, and professor in the Harvard Economics Department since 1956. Early life and educatio ...
, represents a social welfare function in general terms as any ethical belief system required to order any (hypothetically feasible) social states for the entire society as "better than", "worse than", or "indifferent to" each other.
Kenneth Arrow Kenneth Joseph Arrow (23 August 1921 – 21 February 2017) was an American economist, mathematician, writer, and political theorist. He was the joint winner of the Nobel Memorial Prize in Economic Sciences with John Hicks in 1972. In economics ...
(1963) showed a difficulty of trying to extend a social welfare function consistently across different hypothetical
ordinal utility function In economics, an ordinal utility function is a function representing the preferences of an agent on an ordinal scale. Ordinal utility theory claims that it is only meaningful to ask which option is better than the other, but it is meaningless to ask ...
s even apart from justice. Utility maximization survives, even with the rise of ordinal-utility/ Pareto theory, as an ethical basis for economic-policy judgments in the wealth-maximization criterion invoked in
law and economics Law and economics, or economic analysis of law, is the application of microeconomic theory to the analysis of law, which emerged primarily from scholars of the Chicago school of economics. Economic concepts are used to explain the effects of laws ...
.
Amartya Sen Amartya Kumar Sen (; born 3 November 1933) is an Indian economist and philosopher, who since 1972 has taught and worked in the United Kingdom and the United States. Sen has made contributions to welfare economics, social choice theory, econom ...
(1970), Kenneth Arrow (1983),
Serge-Christophe Kolm Serge-Christophe Kolm (born December 1932) is a French economist. His work in economics and related social science includes his analyses, concepts and results in Public Economics and Normative Economics (hence also social ethics and political phil ...
(1969, 1996, 2000), and others have considered ways in which
utilitarianism In ethical philosophy, utilitarianism is a family of normative ethical theories that prescribe actions that maximize happiness and well-being for all affected individuals. Although different varieties of utilitarianism admit different charact ...
as an approach to justice is constrained or challenged by independent claims of
equality Equality may refer to: Society * Political equality, in which all members of a society are of equal standing ** Consociationalism, in which an ethnically, religiously, or linguistically divided state functions by cooperation of each group's elite ...
in the
distribution Distribution may refer to: Mathematics *Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations * Probability distribution, the probability of a particular value or value range of a vari ...
of
primary goods Primary goods are presented in the book ''A Theory of Justice'' (1971) written by the American philosopher John Rawls. In the first edition of the ''Theory of Justice'', these goods are supposed to be desirable for every human being, just as they ar ...
, liberty, entitlements,
opportunity Opportunity may refer to: Places * Opportunity, Montana, an unincorporated community, United States * Opportunity, Nebraska, an unincorporated community, United States * Opportunity, Washington, a former census-designated place, United States * 3 ...
, exclusion of antisocial preferences, possible capabilities, and fairness as non-envy plus
Pareto efficiency Pareto efficiency or Pareto optimality is a situation where no action or allocation is available that makes one individual better off without making another worse off. The concept is named after Vilfredo Pareto (1848–1923), Italian civil engine ...
. Alternate approaches have treated combining concern for the worst off with
economic efficiency In microeconomics, economic efficiency, depending on the context, is usually one of the following two related concepts: * Allocative or Pareto efficiency: any changes made to assist one person would harm another. * Productive efficiency: no addit ...
, the notion of personal responsibility and (de)merits of leveling individual benefits downward, claims of
intergenerational justice Intergenerational equity in economic, psychological, and sociological contexts, is the idea of Social justice, fairness or justice between generations. The concept can be applied to fairness in dynamics between children, youth, adults, and Old a ...
, and other non-
welfarist In its most general sense, welfarism is a theory about what has value or what matters. It can be defined as the view that well-being is the only thing that has intrinsic value. ''Pure welfarists'' hold that this value is directly determined by th ...
/Pareto approaches. Justice is a subarea of
social choice theory Social choice theory or social choice is a theoretical framework for analysis of combining individual opinions, preferences, interests, or welfares to reach a ''collective decision'' or ''social welfare'' in some sense.Amartya Sen (2008). "Soci ...
, for example as to
extended sympathy Extended sympathy in welfare economics refers to interpersonal value judgments of the form that social state ''x'' for person ''A'' is ranked better than, worse than, or as good as social state ''y'' for person ''B'' (Arrow, 1963, pp. 114–15) ...
, and more generally in the work of Arrow, Sen, and others. A broad reinterpretation of justice from the perspective of
game theory Game theory is the study of mathematical models of strategic interactions among rational agents. Myerson, Roger B. (1991). ''Game Theory: Analysis of Conflict,'' Harvard University Press, p.&nbs1 Chapter-preview links, ppvii–xi It has appli ...
,
social contract theory In Moral philosophy, moral and political philosophy, the social contract is a theory or model that originated during the Age of Enlightenment and usually, although not always, concerns the Legitimacy (political), legitimacy of the authority of ...
, and
evolution Evolution is change in the heritable characteristics of biological populations over successive generations. These characteristics are the expressions of genes, which are passed on from parent to offspring during reproduction. Variation ...
ary naturalism is found in works of
Ken Binmore Kenneth George "Ken" Binmore, (born 27 September 1940) is an English mathematician, economist, and game theorist, a Professor Emeritus of Economics at University College London (UCL) and a Visiting Emeritus Professor of Economics at the Unive ...
(1994, 1998, 2004) and others. Arguments on
fairness Fairness or being fair can refer to: * Justice * The character in the award-nominated musical comedy '' A Theory of Justice: The Musical.'' * Equity (law), a legal principle allowing for the use of discretion and fairness when applying justice ...
as an aspect of justice have been invoked to explain a wide range of
behavioral Behavior (American English) or behaviour (British English) is the range of actions and mannerisms made by individuals, organisms, systems or artificial entities in some environment. These systems can include other systems or organisms as well ...
and theoretical applications,supplementing earlier emphasis on
economic efficiency In microeconomics, economic efficiency, depending on the context, is usually one of the following two related concepts: * Allocative or Pareto efficiency: any changes made to assist one person would harm another. * Productive efficiency: no addit ...
(Konow, 2003).James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," ''Journal of Economic Literature'', 41(4), pp
1188-1239


See also

*
Constitutional economics Constitutional economics is a research program in economics and constitutionalism that has been described as explaining the choice "of alternative sets of legal-institutional-constitutional rules that constrain the choices and activities of economi ...
* Cost-benefit analysis *
Deadweight loss In economics, deadweight loss is the difference in production and consumption of any given product or service including government tax. The presence of deadweight loss is most commonly identified when the quantity produced ''relative'' to the amoun ...
*
Economic inequality There are wide varieties of economic inequality, most notably income inequality measured using the distribution of income (the amount of money people are paid) and wealth inequality measured using the distribution of wealth (the amount of we ...
*
Laffer curve In economics, the Laffer curve illustrates a theoretical relationship between rates of taxation and the resulting levels of the government's tax revenue. The Laffer curve assumes that no tax revenue is raised at the extreme tax rates of 0% and ...
*
Pareto efficiency Pareto efficiency or Pareto optimality is a situation where no action or allocation is available that makes one individual better off without making another worse off. The concept is named after Vilfredo Pareto (1848–1923), Italian civil engine ...
*
Positive economics Positive economics (as opposed to normative economics) is the part of economics that deals with positive statements. That is, it focuses on the description, quantification and explanation of economic phenomena.Stanley Wong (1987). "positive economi ...
*
Poverty reduction Poverty reduction, poverty relief, or poverty alleviation, is a set of measures, both economic and humanitarian, that are intended to permanently lift people out of poverty. Measures, like those promoted by Henry George in his economics clas ...
*
Social equality Social equality is a state of affairs in which all individuals within a specific society have equal rights, liberties, and status, possibly including civil rights, freedom of expression, autonomy, and equal access to certain public goods and ...
*
Social justice Social justice is justice in terms of the distribution of wealth, opportunities, and privileges within a society. In Western and Asian cultures, the concept of social justice has often referred to the process of ensuring that individuals fu ...
*
Taxation as theft The position that taxation is theft, and therefore immoral, is found in a number of political philosophies considered radical. It marks a significant departure from conservatism and classical liberalism. This position is often held by anarcho-c ...


References

{{reflist Welfare economics Game theory Justice