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Category: Economics

Economics / Work

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Is the Market Wage the Just Wage? (Just Wages Series)

Peter Boettke, Rosolino Candela, and Kaitlyn Woltz’s post is the second in our four-part series on “Just Wages.” It offers a reassessment of factor pricing and distributive justice. 

Does the market generate just wages? This question has plagued the minds of those concerned with justice for centuries (Aquinas, 1485). In his recent (open-access) article, “On the Very Idea of a Just Wage,” Joseph Heath argues that the market does not generate just wages. Instead, he argues that factor pricing is irrelevant to normative issues like distributive justice. Heath argues that market forces will produce efficient wages, but not just wages.

We challenge Heath’s argument, arguing that his conclusion, while not invalid, is misplaced. His critique is of a model of the market and not the market itself. In particular, his critique is of equilibrium models of the market. (more…)

Economics / Work

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Talents and Wages (Just Wages Series)

Andrew Lister’s post is the first in our four-part series on “Just Wages,” which will be running this month. 

Gregory Mankiw argues that those who are more productive should get a higher income not only as an incentive, but because this income is rightfully theirs (295). In a competitive market, factors of production are paid the value of their marginal product (32), which is the change in output associated with adding an extra unit of that input. Firms hire workers of a given type up to point at which the revenue the firm gains from hiring an additional worker is equal to the cost of that worker. Thus, in competitive equilibrium “each person’s income reflects the value of what he contributed to society’s production of goods and services.”  In this way, the theory of “just deserts” gives “a new normative interpretation” to the economic theory of competitive equilibrium (295).

Joe Heath responds that wages in a competitive market aren’t intrinsically fair. Wage-setting is not a unidirectional process from unequal skill and effort to unequal contribution to unequal wages. Where workers of a given skill-level are more abundant, they will be cheaper, and so hired for lower-value tasks, and so less productive even if equally skilled and diligent. The rationale for pricing labour according to supply and demand is that it directs people’s talents to where they can best be used, generating prosperity that can benefit everyone. As Heath says, “[t]he market has one job to do, and it does that job very well [allocating resources efficiently]. Producing ‘just’ wages, however, is not that job” (31). (more…)

Economics / Work

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On the Very Idea of a Just Wage (Just Wage Series Introduction)

In this post, Huub Brouwer and Thomas Mulligan introduce a four-part Justice Everywhere series on the question: What is a just wage? Over coming weeks, this will feature posts by Andrew Lister, Peter J. Boettke et al., Peter Dietsch, and Joseph Heath. 

In the aftermath of the 2008 financial crisis, smoldering questions about what just wages are, and whether markets are providing them, have erupted again. Some charge that unprecedented inequalities in income and wealth threaten national comity and are injustices in themselves. For others, regulation and egalitarian transfer policies are the real culprits, hampering efficiency and treading on property rights. Still others would like a world where people get what they deserve, and income and wealth come not through inheritance or social connections but effort and skill.

These are debates in the public sphere, but, of course, philosophers have discussed the nature and the possibility of a just wage for millennia. Plato, Aristotle, Thomas Aquinas, and Adam Smith—among many others—all grappled with the issue. But despite this timelessness, it seems to have new relevance now. (more…)

Economics / Gender / International

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Technological Justice

Relaxed senior adult wearing eyeglasses works on a laptop computer at home.

At least in the developed world, technology pervades all aspects of human life, and its influence is growing constantly. Major technological challenges include automation, digitalisation, 3 D printing, and Artificial Intelligence. Does this pose a need for a concept of “technological justice”? If we think about what “technological justice” could mean, we see that the concept is closely connected to other concepts of justice. Whether we are talking about social justice, environmental justice, global justice, intergenerational justice, or gender justice – at some point we will always refer to technology. It looks as if a concept of technological justice could be useful to draw special attention to technology’s massive impact on human lives, although the respective problems of justice can also be captured by more familiar concepts. (more…)

Distribution / Economics / International

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Why central banks must change before the next crisis hits

Our recent book Do Central Banks Serve the People? sheds a critical light on the actions of central banks in the wake of the 2007 financial crisis. Using the US Federal Reserve, the European Central Bank, and the Bank of England as examples, we show how they have stretched their mandate beyond their traditional tasks of price stability and financial stability. This short introduction to the book summarizes the argument that the expanded role of central banks has three serious drawbacks.

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Democracy / Distribution / Economics / Governance

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From the Vault: Good Reads in Left-Wing Politics

While Justice Everywhere takes a break over the summer, we recall from our archives some of our memorable posts from 2017-2018.

Here are three good reads on issues commonly associated with left-wing politics that you may have missed or be interested to re-read:

Lisa Herzog’s interview with Isabelle Ferreras on ‘Workplace Democracy‘

Lasse Nielsen’s ‘Sufficiency on Political Inequality‘

Miriam Ronzoni’s ‘On Striking as a Privilege‘

Democracy / Economics / Moral values

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Values in Science & Science in Normative Theorising

Last year, Kevin C. Elliott published three new books on ‘values in science’:

                        

Given that empirical research is often used by moral, social, and political philosophers in scholarship on questions of justice, we thought it would be interesting to chat to Kevin about his recent work and its implications for moral, social, and political philosophy.

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Democracy / Economics / General / Work

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Workplace Democracy – a proposal for saving democracy

This is an interview with Isabelle Ferreras, who has just published a book on workplace democracy – to my knowledge, it’s the most detailed argument and proposal for a specific form of workplace democracy that has been provided in recent years. To get a sense of what it is all about, check out the animated trailer at www.firmsaspoliticalentities.net. We asked Isabelle to tell us more about her book, and we are very happy that she immediately agreed to do so.

Q: How did you get interested in the topic of workplace democracy?

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Academia / Democracy / Economics / Education / Work

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What, if anything, is wrong with private money in political philosophy?

Recently, there have been increasing worries about the role of private money that funds libertarian political philosophy (see e.g. here or here). The role of private money in academic research is not precisely a new problem; it has plagued other fields for decades (see e.g. here for a study of some of the more problematic forms). But it seems to be rather new for political philosophy, or at least it seems to have gone to levels it has not had in the recent past. But what exactly is wrong with it? Isn’t it simply an exercise of freedom of expression to use one’s money to sponsor scholarship one is interested in?

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Distribution / Economics

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Sufficiency on Political Inequality

If you consider yourself a political philosopher, it seems that you must be doing political philosophy. What does this political constraint imply? To me, it does certainly not imply that you are not allowed to used farfetched hypothetical thought-experiments, or that you take a specific stand on ideal contra non-ideal theory. Nor does it imply that it is morally impermissible for us to raise certain philosophical questions, if we foresee a reasonable chance that answering these questions could make the world worse or more unjust, as some activists claim. What it implies is that you should acknowledge the political relevance of your philosophical work, and that you have a commitment to make this relevance explicit.

For an excellent example, see Lisa Herzog’s recent post on the blog. But I wish here to briefly present an analysis of my own on the reasons for concern with political inequality (“What is Our Real Concern with Real Inequality?”, Policy Studies Journal).

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