The time seems propitious for reconsidering a train of thought that was pursued uninterruptedly from Aristotle, through Saint Thomas Aquinas and the Doctors of Salamanca, to John Locke. The conversation centered on the topic of economic justice. And died thereafter. It has been supplanted by the doctrine of social justice.
There was much stability in the economic life throughout those millennia; but the stability was acquired at the well-known cost of stagnation that a static social cast system imposed upon the cultural, economic, and political life of most of the world. The old system was unjust; therefore, it could not be sustained—and it did not last. Yet, the ongoing “modern” system of organizing society is not too healthy either. Explanations abound, but there is near unanimous dissatisfaction with our current economic life. This is the dissatisfaction that stands at the root of the current dangerous political impasse in many countries of the world.
With the understanding that both the old system and the modern have not been consciously designed by anyone, but have grown in response to the needs of the moment, the hope arises that we might do better in the future. The pivot is participative justice. This is the third plank of the theory of economic justice that, for many reasons, was never mentioned explicitly in the literature. This plank must be treated explicitly, and translated into practice at the earliest possible moment, if we ever want to build a complete, just, and durable system of economic justice.
Many aspects of life hinge on the right to participate in the economic process, from practical politics to political science, from economics to justice, and from justice to peace—let alone industrialization, and globalization. Without any longer the restraint afforded by traditional practices of distributive and commutative justice, and with the human need for participation in the economic process heightened by the presence of robots, the organization of society—which has been none too stable during the last 300 years—is at a flash point.
The current crisis is our opportunity: Taking the dust off the ancient literature, we are able to better understand the past and to receive marching orders about the future. We will follow this outline. In Part 1, we will analyze distributive justice and commutative justice—and discover that because of slavery and privilege the plank of participative justice remained silent from Aristotle to Locke. With Locke, rather than making this plank explicit, the literature has consigned the entire field of economic justice to the dustbin of history—and diverted attention onto the issue of justice of property rights. This decision has been an intellectual mistake of gargantuan proportions. In Part 2, we will see some of the pitfalls of this intellectual mistake. In Part 3, we will see that to recover the field of economic justice we need a clear mind and knowledge of hard facts, In Part 4, we will see that participative justice can be obtained by transforming privileged access to the factors of production into rights, through the assumption of corresponding economic responsibilities, because rights do not exist without responsibilities (Gorga 2010). In Part 5, we will see that with participative justice openly joining the planks of distributive and commutative justice, economic justice for all can reign in the land.
Concluding comments point out that privileges are always under assault and a source of social, economic, and political instability. With the digital Age of Plenty at our doorsteps, privileges can be extended to everyone and thus become rights for everyone, through the assumption of corresponding responsibilities by everyone. With economic justice thus assured, peace will return to the world, because, as Pope Paul VI sternly admonished us in the not too distant year of the Lord 1972, “If you want Peace, work for Justice.”
THE THREE PLANKS OF ECONOMIC JUSTICE
The theory of economic justice has three planks. Two planks have been explicitly mentioned in the literature; the third plank, the plank of participative justice, has been passed under silence.
Two Explicit Planks of Economic Justice
From Aristotle onward, in a vast literature, explicitly, economic justice is distinguished as distributive justice and commutative justice, namely the set of rules of justice that ought to govern the distribution of income and wealth as soon as it is created, as well as the set of rules of justice that ought to govern all exchanges (the commutation) of wealth. Interestingly, the rules of both commutative and distributive justice are determined by the principle of equivalence: What is exchanged, what one gives and receives, must have an equivalent value. (This equivalence is carried over into the principle of participative justice, in which the economic value of rights is “equivalent” to the economic value of responsibilities.) Eventually, Scholastic Doctors reached a firm and revolutionary conclusion about the dictates of commutative justice. The commutation of wealth, namely the exchange, occurs in accordance with principles of justice, they discovered, only if it reflects a free market price: a price determined in a market that is not dominated by either governmental or private monopolistic forces (see, e.g., Schumpeter 1954, pp. 98-99). The principle of equivalence still governs all determinations of justice involved in market transactions as evidenced especially in anti-trust legislation (see, e.g. Gissy 2013).
Broadly speaking, it can be said that Aristotle and the Doctors of the Church left much room for discretion in the determination of distributive justice to the parties involved in the economic process. Beyond land tenancy and the notorious sharecropping system, a remnant of the traditional forms of distributive justice still exists in the fishing industry. If you go to the waterfront in Gloucester, Massachusetts, you will learn that the shares for the distribution of the value of the catch are well known in advance and agreed upon by all members of the industry: so much for the owner of the vessel; so much for the captain; so much for the crew. Provable injustices in traditional agreements about the distribution of income and wealth were rooted in the credit (read, mainly, usury) and landownership systems (read, mainly, latifundia), rather than in the specific agreements themselves. In fact, although there is a suspicion that sharecropping was exploitative, “evidence from around the world suggests that sharecropping is often a way for differently endowed enterprises to pool resources to mutual benefit, overcoming credit restraints and helping to manage risk” (Heath and Binswanger 1998). Agreements varied widely, but generally tenants and sharecroppers would keep fifty percent of the value of the crops.
This discussion might appear to have a rather quaint flavor, until it is related to some issues of distributive justice prevailing in world affairs today. It is for the lack of any agreed upon rule of distributive justice that, for instance, a May 18, 2015 CNBC report found that “The average S&P 500 company CEO made 373 times the salary of the average production and non-supervisory worker in 2014, up from 331 times in 2013” (Mullaney 2015). Is it any wonder that, because of these—and many other—malpractices in the distribution of income, to eke out a living today the working poor have to work at two or three jobs a day, and still remain poor?
Without relating such events to a theory of justice and to long term trends of economics, namely looking at these issues short term and within the ideology of “free markets,” the society of economists is not going to analyze either questions of justice or questions of fact such as whether there is any real wealth behind the accumulation of the zeros received by CEOs today or for that matter whether the growth of their corporations and the growth of the economy as a whole is sustainable.
The Silent Third Plank of Economic Justice
In addition to distributive and commutative justice, implicitly, there was another plank to the classical doctrine of economic justice. This was the plank of participative justice. Since ancient writers were mainly addressing their remarks to landowners and shopkeepers, namely people who were actively participating in the process of production and distribution of wealth, there was no objective need for them to treat the plank explicitly. The fact that the plank was not mentioned in the books is no proof that it was not practiced in daily reality. It is enough to ask a question to determine the essential need for the presence of such a plank: How does one acquire the right to the distribution of income, if one does not participate in the production of that income?
There is much that can be learned through an investigation into this plank; especially fruitful is an investigation concerning some of the reasons why this plank remained forever silent.
Why Was the Plank of Participative Justice Kept Silent?
Many reasons militated against any explicit mention of participative justice. Aristotle could not conceive of it; to do so, he would have had to overcome the cultural control that slavery—and their conception of leisure—had on Greeks’ minds. He could not conceive of participative justice because he would have had to extend the blessings of justice to all, slaves included. Obviously, Aristotle did not and could not do that. (To realize why Saint Thomas Aquinas and all Doctors of the Church equally did not and could not conceive of economic justice for all is a much more complex issue that deserves separate treatment).
Not even Jefferson, two thousand years after Aristotle—while proclaiming the equality of all people—could explicitly mention the need for participative justice. In fact, in 1776, he could not extend the blessings of justice to all human beings, because he would not have preserved the union at the same time. He had to literally cross the word “property” from the Declaration of Independence. In Locke, the ancient formula is: “life, liberty, and property”; in George Mason and his Virginia's Declaration of Rights the expression, more forcefully and purposefully, is: “life, liberty, and the means of acquiring and possessing property.” By erasing the word “property,” Jefferson broke with Tradition and pressed on toward the la la land of “happiness.” This is the land of entitlements. This is the land of “rights” and no responsibilities. The best this ideology can do is to assign rights to individuals and responsibilities to an abstract “state.”
That Jefferson could not extend the blessings of economic justice to all, becomes painfully evident in the context of the sacrifice of Abraham Lincoln. President Lincoln did extend political justice to the slaves and presumably for this courageous act he paid with his life. (There are other reports that attribute his assassination to his creation of the Greenbacks.) The American people extended political justice to the slaves and an estimated 60,000 of them—of us—paid for this courageous act with their limbs; over 600,000 of them—of us—paid for this courageous act with their lives.
The chasm between the noble demands of justice and the mundane reality of slavery was a reason that condemned the third plank of economic justice, the plank of participative justice, to remain silent all that many years. There were other reasons that concurred to create the same result.
One More Reason for the Silent Third Plank: The Protection of Privileges
Participation in the economic process did exist, of course, because the economic process has existed forever; but participation depended on privilege, and one could not openly admit to the existence of an evident conflict between the high ideals of justice and such a poor practice as evidenced in the daily reality of poverty and unemployment. The few participated as if by right, divine or otherwise; the many by favor granted by the few on a variety of specified conditions as in sharecropping, for instance; and the very poor by default: The poor preserved a traditional legal and moral access to the commons, the lands that no one wanted, up to the 16th century or so, and open access to the oceans up until recently. This relatively well-known history concerns the enclosures of the commons—a history despoiled by the relatively recent tendentious proclivity of extreme environmentalists for misidentifying the tragedy of the enclosures as “the tragedy of the commons.”
Clearly, rather than investigating in depth these messy relationships, the better part of valor suggested not to analyze the plank of participative “justice” at all. It is as if the plank did not exist at all; it is as if the need to participate in the economic process did not exist. It is as if angels were doing the “dirty” work of providing for the necessities of life and culture and leisure. Yet, in the long run, this silence exacted a heavy price. It is the doctrine of economic justice itself that logically has silently disappeared from sight.
THE DISAPPEARANCE OF ECONOMIC JUSTICE
FROM LAW, ECONOMICS, AND POLITICAL SCIENCE
With the “high” culture of Empiricism in the saddle, John Locke left behind the "abstract" and theoretical conversation on economic justice for ever. Not a single reference to this long-standing tradition is to be found in his Two Treatises of Government (1689). Especially because of its association with the Catholic tradition, economic justice was implicitly assumed to be akin to a personal subjective value that could not be “rationally” justified—or perhaps worse such rationalizations. The search for economic justice—when it is not confused with social justice—has been silently abandoned by mankind during the last 300 years. It can no longer be found in works on law, economics, or political science.
Modern popes, starting with Leo XIII (RN ## 34 and 46), Pius XI (QA # 65), John Paul II (CA ## 33-35), and Francis (LS # 157) have explicitly mentioned the term “economic” justice—all the while meaning “social justice.” Most bishops do the same: The classic publication perhaps is Economic Justice for All: Pastoral Letter on Catholic Social Teaching and the U.S. Economy by the United States Catholic Bishops (1986, esp. # 15 and Ch. 1:1). But their words have fallen on deaf ears. There are two major reasons for this condition: First, the content naturally slides into the ideology of “social” justice; second, and more fundamentally, the project of economic justice has not been related to economic theory and practice. Economic justice has been left in the stratosphere of abstract thought and high moral ground.
Pity. Pity because, as Giambattista Vico, a deep scholar of history and the inner movements of thought, recognized, economic justice was traditionally used as a common sense (pp. 10, 238), a sixth sense that unified human beings for a long stretch of history, from Aristotle to Locke—and when the chips are down, namely the veil of ideology is lifted and the deep wells of ignorance are filled to the brim, it is still found that economic justice forever beats in unison in the heart of every human being with a heart.
Double pity. Double pity because this development has led to a corruption of the language. Even in specialized treatises we are liable to use interchangeably two similar-looking expressions that technically have nothing in common: social justice and economic justice.
Triple pity. Triple pity because the human search for justice is inextinguishable, and as such it has been diverted into a cul-de-sac, from which we do not yet seem able to escape: the search has been confined to the topic of justice of property rights. The pivotal work is John Locke’s Two Treatises of Government, a work of political philosophy published anonymously in 1689. In it Locke, as one of the most influential of Enlightenment thinkers and commonly known as the "Father of Liberalism," dealt with the momentous issue of the forms of government. In the first treatise, he courageously undermined the prevailing doctrine that Kings have a divine right to govern, thus more than any other thinker he ushered in the modern age of reason. In the second treatise, he guided our modern civilization toward the democratic form of government as guarantor of “life, liberty, and property.” Notice, property.
Does everyone have property? With this question was a new chapter in the history of humanity initiated. Locke, while abandoning—without any warning—the abstract search for economic justice, concentrated the mind on the "concrete" search for the justice of property rights. Where the justice, where the legal and moral justification of existing property rights? Try as he might, the best Locke could reach is only a prescriptive arrangement. He set three restrictions on the accumulation of property “in the state of nature”: 1) one may only appropriate as much as one can use before it spoils (Two Treatises 2.31), 2) one must leave “enough and as good” for others (2.27), and 3) one may only appropriate property through one's own labor (2.27).
Most people’s minds, however, were diverted toward past experience. The observation of the past led to a focus on the fact of history that most property has traditionally been acquired through conquest and pillage. Karl Marx and the Socialists took their marching orders from this reality.
Locke, a philosopher with evident scarce understanding of economics, especially no understanding of the damage that hoarding does, proclaimed that, since money—in the form of gold and silver—does not spoil, one can hoard as much money as one wants (ibid. 2.45-50). Clearly, this was the beginning of an intellectual revolution in which we are still fully entangled: Read, all rationalizations of Individualism and Capitalism; read, as counterpoint, the greater abstractions of the solutions of Socialism and Communism.
Quadruple pity. Locke showed himself to be a faux historian, and started the separation of economics from history (read, separation of economics from reality): Locke should have at least acknowledged what Moses and Jesus thought about hoarding (see, Gorga 2011).
Quintuple pity. At the same time, Locke showed himself to be a (willful?) ignorant scholar: By not making any reference to the traditional treatment of economic justice from Aristotle onward, Locke gave permission to all subsequent intellectuals to ignore that tradition. Worse. Locke did not only give permission to Adam Smith—and all subsequent economists—to abandon the tradition of economic justice; he gave Adam Smith permission to do the same in relation to the rich tradition in monetary economics that by his time had culminated in the work of Sir James Steuart. By his own open admission, Smith made Steuart’s work disappear by not even mentioning his name once (West, p. 168). In so doing, Adam Smith condemned the economics profession to rediscover the reality of monetary economics over and over again. The main case is this. To re-establish the tradition of monetary economics was the General Theory written by Keynes (1936, p. vi-vii).
Sextuple pity. By passing the past under silence, Locke showed himself to be a morally corrupt scholar: Not acknowledging the existence of the past, the “scholar” hides from the unaware reader the existence of intellectual proofs of the falsity of what the scholar asserts—as well as the validity of past prescriptions for social, economic, and political evils. To say the least, as pointed out by George Santayana, “Those who cannot remember the past are condemned to repeat it.” Proof of Locke’s mental corruption implicit in his forgetfulness of the past? His doctrine for the acquisition of property has generally become an explicit justification or at least a cover-up for ancient methods of acquisition of property rights: conquest and pillage.
Septuple pity. This doctrine was even more of an effrontery to the common sense of justice, because it hid a naked contemporary reality: The people who at the time of Locke were especially subject to conquest and pillage were Native Americans. Nay. The same methods were used in Australia and in Africa. In India, the method was more subtle: Debt, debt known to be impossible of repayment, was issued to many a maharajah. Should one recall the opium wars and China? Should one stretch one’s moral sensitivity and connect the dots—of the hardship imposed upon human beings by the process of acquisition of wealth—all the way to the opioid tragedy engulfing us today?
Octuple pity. With the unheralded death of the economic justice project, the issue of participative justice has no longer been under consideration; but—quite apart from any theory—the fact of participation in the economic process, although silent, remains stubbornly there. How does one participate in the economic process? There are many answers; and the answers are conflicting ones. Thus, the discussion leads to confusion.
The easy answer is that, apart from investing money out of inheritance, one participates in the economic process thanks to “property rights”: Anyone can participate in the economic process, if one has property to make fruitful. The most absurd answer that inveigles us in a Catch 22 of gigantic proportions is this: Go to work, save some money (out of starvation wages)—and invest your savings in fruitful ventures. The amazing fact of human nature is that a few people manage to do just that. But at what psychological cost? What are the premeditated assaults on such a society by the strained successful few? These questions are never asked.
Then there has been a long succession of suggested solutions which are not worth mentioning, such as the call for castration (a final solution, indeed, to the tendency of the poor to reproduce like rabbits).
Nonuple pity. These are all answers on the right side of the political spectrum. On the left, there is a short-cut: Take property away from the rich—just like that. The most complex form of this approach has been the policy of changing from private to public the ownership and management of the means of production (while the social relations in between are supposed either to all change at once or all to remain the same, on command). The most common, the easiest solutions of all, in a rich variety of forms, have been calls for the redistribution of income and wealth; From the “rich,” to whom? How much wealth? How many times? Oh, let us not be bothered with details.
Decuple pity. As can be seen, Locke made room for a long succession of easy explanations and consequent easy solutions to the “social problem,” which, when not heeded, have led to a long succession of revolutions from the left that have consistently, unavoidably, been followed by counterrevolutions from the right. Indeed, major revolutions and counterrevolutions have taken place ever since the publication of Locke’s treatises, which have been largely sponsored by the opposing answers to the (not clearly asked) question: How can one participate in the economic process?
Undecuple pity. All pity does come to roost. In the long run, the shift of focus from economic justice to the justice of property rights has been a disaster, because, by neglecting the facts of the past and hiding the facts of the present, Locke has enfeebled our mind. There are no solid, workable solutions on the table.
Duodecuple (and final?) pity. These are not “historical” and perhaps abstract matters.
Too many of these “solutions” are still under discussion all over the world and tinge the current rounds of electoral rhetoric even in the politics of the United States, a most “pragmatic” of countries, the home of pragmatism and compromises. Yet, compromises cannot be brought to fruition when reconciliation calls for the sacrifice of basic values: Who can compromise compassion and charity? Who can compromise responsibility and efficiency?
This long-standing impasse must be broken. The impasse can be broken only on the basis of hard facts and clarity of mind. The following paragraphs might help to accomplish this task.
SOME FUNDAMENTAL FACTS
Since the mind controls the hand, we must above all understand what stands behind the daily reality.
A few fundamental distinctions
Here follow a few fundamental distinctions that come from a clear understanding of reality; they ask us to free ourselves of some deficient language. As pointed out in Gorga (1999),
To clarify issues concerning the definition of economic rights, it might be useful to begin with an overview of three factual distinctions between economic rights, property rights, and entitlements. These distinctions can be taken as facts at this stage of the discussion but they will be justified in the course of the argument. First, the content of these three entities is different. The object of property rights are marketable things, tangible or intangible things such as material goods and services. The object of entitlements are human needs, from food to shelter to health. The object of economic rights are economic needs. Second, the legal form of these three entities is different. Property rights are concrete legal titles over existing wealth; economic rights are abstract legal claims over future wealth; and entitlements are moral claims on wealth that legally belong to others. Finally, the quantity that they measure is variable. While both property rights and entitlements relate to existing wealth, and therefore a necessarily finite quantity, economic rights relate to future wealth, an unknown and elastic—if not a potentially infinite—quantity.
In addition to these distinctions, we have to be aware that there are four component elements to the process of production of wealth, four factors of production.
Four component elements of the production process
From the fictional la la land of entitlements, we need to come down to earth. To produce anything, in a modern economy, one needs control over (1) Land and natural resources; (2) Tools in the form of physical capital as in plants and equipment; (3) Money in the form of financial capital; and, (4) Labor in its variegated manifestations of manual labor, intellectual labor, and (spiritual?) labor as in entrepreneurial leadership. These are the modern factors of production. It is only natural that human beings should attempt to get as much control as they can over each one of these factors.
Control over the factors of production. it seems, has been forever acquired on the basis of privilege. This is the nodal point where all sorts of aberrations grow in the social system. Four of them need to be pointed out because they are related to the four factors of production and function as the four horses of the Apocalypse in the search for the accumulation of inordinate wealth in the hands of the few: a) Not paying adequate taxes on land; b) Reserving access to credit to those who already have capital assets; c) Denying to workers a share of the capital appreciation they have created by their work; and, d) Tolerating the excesses of the Pac Man Way of mergers and acquisitions. By these means we allow the few to legally acquire inordinate wealth. Then we ask them to divest themselves of their legally acquired wealth through moral suasion and compulsory taxation, namely moral and legal extorsion. Both quite shortsighted tools.
“The system,” as it has grown so far, is definitely not good for the poor; it has lately destroyed the middle class in the United States; and it is not working well for the rich either, except in an illusory and transitory way. The litany of problems engendered by existing privileges through which current participation in the economic process occurs is well known. Here we shall concentrate on solutions, just and lasting solutions.
The history of mankind is littered with vain attempts to destroy privileges enjoyed by “others.” Much ought to be said about this mischievous proclivity of mankind, and libraries are indeed full of these elocutions. Here we shall realize a simple reality: We, all of us, do not want to give our privileges away. On the basis of this simple verity, we shall proceed to a new approach to searching for solutions. Our recommendation is simple and direct. Privileges ought to be transformed into rights. The required “quid pro quo” will become apparent as we proceed.
ON THE TRANSFORMATION OF PRIVILEGES INTO RIGHTS
The transformation of privileges into rights appears to be an impossible feat, because privileges have never been given up voluntarily. Indeed, none other than Adam Smith, in a clear-eyed recognition of this reality, issued a statement so strong that it is hardly ever quoted. Adam Smith said: “All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind" (Wealth of Nations, Bk. III, Ch. 4, par. 10). We must break this chain of unwarranted accumulation of wealth.
The plank of participative justice is the pivot. This is the difference from all past proposals. No privileges need be abandoned; rather, privileges need to be transformed into rights. This is a call for sharing privileges. If privileges are so good for the few, they must be good for everyone else as well. When privileges are extended to everyone, existing privileges are automatically transformed into rights.
With the digital Age of Plenty at hand, privileges for the few can indeed be transformed into rights for all. Those who have privileges today will not lose any of their privileges; with economic rights being infinite, society can—and ought to—make them available to all, without taking anything away from anybody. This proposition relates to past wealth; and it is equally valid in relation to future wealth. Robots can be multiplied, and their ownership must be shared. Thus, can privileges be transformed into rights—rights for all.
Commitment to this program of action starts with the realization that, while privileges divide, rights unite. Rights unite because they are born out of the exercise of corresponding responsibilities, which automatically become mutual responsibilities. Ultimately, the process of discovery of mutual responsibilities turns out to be a discovery of the common good.
This might look like a dream, but there is no reason not to believe that a civilized society, a society imbued with an intellectual and moral sense of justice, will not effect this transformation voluntarily. That will happen when the three planks of economic justice are written into the hearts and minds of people. A revolutionary consequence ensues, the position of the privileged class in society will no longer be threatened. They, as anyone else, will rest assured in the exercise of their rights.
What happens then? This is the final outcome. We bring property rights from the Wild West of pillage and conquest into the realm of calm civilization. (And if this ideal set of events should not soon materialize, the usual set of “sticks and carrots” measures are to be called into action—mainly via the use and misuse of a combination of fiscal and monetary policies).
With privileges transformed into rights, we establish the theoretical right of participation in the economic process for everyone. We make the third plank of economic justice explicit. Thus, we transform the doctrine of economic justice into the theory of economic justice.
THE THEORY OF ECONOMIC JUSTICE
While the theory of economic justice, its intellectual description, can be quite convoluted, its practice is self-evident. To practice economic justice is to give the other fellow what is his or her due during the process of production of wealth, during the process of distribution of wealth, and during the exchange of one type of wealth for another.
The structure of this theory of economic justice can be diagrammed this way:
Figure 1 – The Theory of Economic Justice
Figure 1 presents an integration of the three essential planks of economic justice. There are many ways to justify this construction. The most powerful is this. The right of every human being to participate in the process of production of real and monetary wealth (participative justice) is essential, because only this right establishes the foundation on which one can assert the right to a fair share of what one produces (distributive justice), and the right to receive an equivalent value of what one gives (commutative justice). Another way to justify this construction is to point out, as the clear-eyed Saint Pope John Paul II pointed out (Centesimus Annus # 33), that if one does not participate in the economic process one is marginalized, one is thrown into the gutter.
Each one of the three planks is essential to the robustness of the construction as a whole: Quite apart from the construction of a stool with two legs, it is the entire legacy of Buckminster Fuller that comes to mind. And the integrity of each plank can be tested by this type of analysis: Each plank, systematically implemented, produces results that make the other two planks redundant. With the true equivalence of giving and receiving, one participates in the economic process fully, and one receives a fair share in return for what one gives. We are all directly or indirectly producers. Thus, if we were to receive a fair share of our contribution, there would be no need for the plank of participative justice or commutative justice. We are indeed all producers. We only need to consider that the rich do not have the numbers to consume the Gross National Product. It is the middle classes, powerfully aided by the rolls of the poor, who consume the Gross National Product. Starve the poor, you make the country less productive, less rich. This is also a powerful argument for Consumer Stock Ownership Plans (CSOPs). Can we imagine a world in which McDonald’s, Target, and Macy’s were to give a share of their profits to their customers at the end of the year? Starkly stated, It is not the rich who make us rich. The poor make us rich.
The simplest way to make use of the structure of economic justice in the complexity of the modern world is to set it as a standard for the evaluation of any existing or proposed economic policy. Three questions must be asked: Does the policy favor participation in the economic process? Does it favor a just distribution of income and wealth—while wealth is being created? Does it favor equitable exchanges? If the answers are positive, the policy can stand. If the answers are negative, the policy requires adjustments. Why? Because comprehensive economic analysis will show that unjust policies are not simply morally indefensible; they are inefficient in the long run.
To say the least, only if wealth is justly distributed while it is being created the vain call for redistribution of wealth that has already been apportioned can be allowed to die down.
Generalities are useful; specifics are essential. Here is how economic justice is going to be achieved, through four marginal changes in our economic policies. Here is how each economic right is to be matched to an economic responsibility. Is there any need to emphasize that responsibilities are shirked today to the detriment of everyone? They are indeed shirked at the cost of continuing social strife.
The actual transformation of privileges into rights
Economic justice cannot be introduced into the modern society by edict, nor by arbitrary decisions, but by suasion: by showing the reasonableness of each policy and the fairness of its implementation. The proposed economic rights and responsibilities are derived from correspondence with the four modern factors of production: land, labor, and capital distinguished as financial and physical capital. Thus, we can rest assured that no interstice of the economic process escapes our attention. Economic justice needs to be integrated into the fabric of society. The following set of economic rights and responsibilities serves the purpose:
- We are not angels. We live and work on the land, and with the land and its natural resources. In a modern society, the right of access to land and natural resources is justified by the responsibility to pay taxes on that portion of land and natural resources that falls under our exclusive control. The exercise of this responsibility does not only compensate society for its numerous contributions to the value of the land represented by physical and social infrastructures; it also reduces the price of the land, because the presence of taxes reduces hoarding of the land, and thus opens up opportunities to own land;
- We all have the right of access to national credit for capital formation. Money is created on the basis of national credit. National credit is an entity whose value is created by all the people of a nation; thus, national credit belongs to all the people of the nation. Provided it is accessed as a loan, all those who can repay the loan have a right to national credit. And since national credit is a pool of common resources, common wealth, we have the responsibility to repay loans acquired through national credit;
- We all have the right to the fruits of our labor (see, e.g., Rerum Novarum # 46) and the responsibility to contribute to the process of creation of wealth;
- We all have the right to the enjoyment of our wealth and the responsibility to respect the wealth of others. This right acquires special significance when it is used to curb the abuses of the Pac Man Way of mergers and acquisitions.
As it can be seen, not one privilege has to be given up setting a modern society straight; rather, a healthy and prosperous society requires only the exercise of economic responsibilities. Who will object to the assumption of fair responsibilities? Obviously, some will. They are the ones who do not want to realize that liberty for the few easily slides into libertinism (see, e.g., Gorga 2016). Plato knew, “Freedom isn’t the absence of control; rather, control is the essence of freedom“ (Phaedrus). Here we primarily mean, self-control.
It is for this essential reason that responsibilities give rise to rights. More. These are not abstract responsibilities. In their exercise, they end up becoming mutual responsibilities, mutual responsibilities that determine the common good. Indeed, the discovery of the common good implies something quite interesting, quite revolutionary. As pointed out above, the discovery of the common good entails the voluntary acceptance of rights and responsibility.
This is an especially important characteristic in a democracy, a political regimen in which we cannot impose our will on anyone, a political regimen in which the needs of authority must be reconciled with those of freedom.
A more extensive treatment of these issues can be found in much of this writer’s work, and especially in his 1994 article. Still fuller explanations exist in the literature by and about Benjamin Franklin, Henry George, Louis D. Brandeis, and Louis O, Kelso. These are four outstanding American thinkers who, broadly unaware of their mutual connections, pick up the discourse where the other left off. Separately, their thought is open to many debilitating objections. Together, they form an unassailable fortress, a fortress rooted not in abstractions but in the concrete needs of concrete economic agents.
Thus, we build the fortress of economic justice for all members of society; this is a totally civilized fortress. So rooted in responsibilities, the fortress is built on rights. They are unalienable rights. They are essential to life, liberty, and the pursuit of happiness. Only civilized people, people truly integrated within themselves and within society can give and receive economic justice. Justice is a virtue. A virtue is fully exercised only in the context of the exercise of all other virtues. To wit, to give and receive economic justice requires love, the highest of theological virtues. Morality is then automatically restored to markets, and both law and economics become rooted in the virtues. Morality based in the virtues is then practiced in the markets and in the land. And the exercise of morality, which is inseparable from the search and obedience to truth, shall make us free.
To have a better appreciation of the feasibility of this program of action, it is necessary to know that all these rights and responsibilities have at times been—and are now being—implemented piecemeal in many parts of the world with very satisfactory results. The literature is vast and scattered throughout many disciplines.
There is much work to be done.
No paper stands alone. To obtain a better understanding of the issues involved in this paper it is necessary to realize that Participative Justice stands at the core of Concordian economics, and Concordian economics stands at the core of Relationalism, a work in progress that calls for the transformation of linear thinking into relational thinking.
All too briefly, it suffices to realize that as a consequence of the dynamics of the implementation of the proposed four marginal changes in our current practices, economic freedom will gradually be expanded to embrace all those who want to subject themselves to the rigors of the economic process—and then the few remaining hard cases can be easily taken care of by charity. The central recommendation of the field of action that the present work proposes comes down to this, only when justice has exhausted its reach, charity must intervene—and love must always be present.
One of the most important benefits of the systematic implementation of these recommendations is this: It is only through a systematic application of economic justice that the promise of social justice can ever be fulfilled. Entitlements, recognized as essential to living a dignified life, will be paid for, not through a redistribution of other people’s wealth, but through our wealth, the wealth we receive via a fair distribution of the wealth that we create. In a sane and healthy society, each one of us will have the financial means to pay for all the entitlements we desire to acquire.
The call for a sane and sound economic policy is simply a call to have the free enterprise system truly free; it is a call to run the economy to the tune of justice. This is a call that can be heard loud and clear once the great social encyclicals of the Catholic Church are interpreted shunning aside all transient political passions of the moment.
Ultimately, it was a poet, Vincent Ferrini (2002), who caught the essence of economic rights and economic responsibilities embedded in a system of justice; it was he who identified the ability of Concordian economics to provide “the answers to universal poverty and the anxieties of the affluent.”
1. Common wisdom suggests that this train of thought was extended up to Adam Smith; see, e.g., De Roover 1955.
2. There is no theory of social justice, because no one has ever defined what social justice is. See, Gorga 2017.
3. See esp. Rerum Novarum ## 3, 4, 25; Quadragesimo Anno ## 3, 10, 14, 15, 25, 44-50, 57, 88, 101-123, 128, 131-136; Centesimus Annus # 5, infra; Laudato Si’, # 106, infra.
De Roover, R. 1955. “Scholastic Economics: Survival and Lasting Influence from the Sixteenth Century to Adam Smith,” The Quarterly Journal of Economics, 69 (2):161-190.
Gissy, W. 2013. “Do Merger Restrictions Promote Social Development?” International Journal of Humanities and Social Science 3(19): 150–59.
Gorga, C, 1994. "Four Economic Rights: Social Renewal Through Economic Justice for All.” Social Justice Review, January-February, 85 (1-2) 3-6.
Gorga, C. 1999. “Toward the Definition of Economic Rights,” Journal of Markets & Morality 2 (1):88-101.
Gorga, C. 2010. “Roots of Property Law: From the Moral Contract - and the Doctrine of Economic Justice - to the Social Contract: Is the Legal Contract Next?” Annual Meeting of the World Institute for Research and Publication - Law, June 4-6. http://www.wirp.org/law/pres/497.swf. Available at SSRN: https://ssrn.com/abstract=1600595 or http://dx.doi.org/10.2139/ssrn.1600595.
Gorga, C. 2011. “The Economics of Jubilation: Blinking Adam’s Fallacy Away.” In Albert Tavidze, ed., Progress in Economics Research, Vol. 19, pp. 1-40. Hauppauge, NY: Nova Science Publishers. Also available at SSRN: https://ssrn.com/abstract=1489570 or http://dx.doi.org/10.2139/ssrn.1489570.
Gorga, C. 2016. “Wake up America. Wake up from Your 250-Year Old Slumber.” Mother Pelican, A Journal of Solidarity and Sustainability, Vol. 12, No. 6. Available at http://www.pelicanweb.org/solisustv12n06page4.html.
Gorga, C. 2017. “Return to Economic Justice: From Entitlements to Rights. The Catholic Social Science Review 22 (2017): 203–21.
Heath, J. and Binswanger, H. P. October 1998. "Chapter 3: Policy-Induced Effects of Natural Resource Degradation: The Case of Colombia". In Lutz, Ernest. Agriculture and the Environment: Perspectives on Sustainable Rural Development (PDF) . Washington, DC: The World Bank. p. 32. ISBN 0-8213-4249-5. Retrieved 2011-04-01. Taken from https://en.wikipedia.org/wiki/Sharecropping.
Locke, J. 1689. The Two Treatises of Civil Government. Ed. Thomas Hollis (London: A. Millar et al., 1764).
Mullaney, T. 2015. “Why corporate CEO pay is so high, and going higher.” A special report to CNBC.com. Available at https://www.cnbc.com/2015/05/18/why-corporate-ceo-pay-is-so-high-and-going-higher.html.
National Conference of Catholic Bishops. 1986. Economic Justice for All: Pastoral Letter on Catholic Social Teaching and the U.S. Economy. United States Conference of Catholic Bishops, Washington, D.C.
Schumpeter, J. A. 1954. History of Economic Analysis. New York, NY: Oxford University Press.
Smith, A, 1776. An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Edwin Cannan, 5th ed. London: Methuen and Co., Ltd., 1904.
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ABOUT THE AUTHOR
Carmine Gorga is president of The Somist Institute. The mission of the institute is to foster sensible moral leadership. He is a former Fulbright scholar and the recipient of a Council of Europe Scholarship for his dissertation on “The Political Thought of Louis D. Brandeis.” By inserting Hoarding into Keynes’ model of the economic system and using age-old principles of logic and epistemology, in a book and a series of papers Dr. Gorga has transformed the linear world of economic theory into a relational discipline in which everything is related to everything else—internally as well as externally. He was assisted in this endeavor by many people, notably for 27 years by Professor Franco Modigliani, a Nobel laureate in economics at MIT. The resulting work,
The Economic Process: An Instantaneous Non-Newtonian Picture, was published in 2002 and has been reissued in a third edition in 2016.
This edition of the book has been annotated again by the Journal of Economic Literature in its last December issue.
For reviews, click here. During the last few years, Dr. Gorga has concentrated his attention on the requirements for the unification of economic theory, policy, and practice calling this unity Concordian economics. He is also integrating this work into political science, which he calls Somism, and culture in general, which he calls Relationalism.