Hossein Hooshmand's essay “Hayek or Rawls? The Challenge over Social Justice”

Hayek or Rawls? The Challenge over Social Justice

Hossein Hooshmand

Source: Mashq-e Now

More than forty years ago, Friedrich Hayek declared his belief that the theory of social justice is a "mirage."[1] To dispel any ambiguity about his view, Hayek describes social justice with expressions such as an "empty formula," "purely, logically, and entirely hollow and meaningless"; "a quasi-religious belief that has no substance or content" and a kind of superstition or "superstitious belief" akin to a belief in sorcery or alchemy. Hayek adds that social justice is a dangerous superstition; like a "nightmare that today, by stirring tender emotions, causes the ruin of all the values of a free civilization," and also causes the "destruction of the very ground in which moral values, such as individual freedom, emerge and grow." In Hayek's view, the term social justice is the source of "confused thinking and even intellectual treason." [2]

Since the 1980s, this view of Hayek's has had a significant influence on a number of economists, government economic advisors, and social policymakers in some countries (including Iran). However, Hayek's points of view on social justice have often been met with indifference by political philosophers. In contemporary political philosophy, under the influence of the works and thought of John Rawls, social justice has become central. Hence, in the literature of this group of philosophers, no reference is made to Hayek's view on social justice. Even Robert Nozick, whose political philosophy conclusions align with Hayek's, did not rely heavily on Hayek's intellectual premises. There is no room here for a comprehensive assessment of Hayek's claims, but through a critical analysis of his fundamental claims, we will show that, contrary to what appears from Hayek's words, the philosophical foundations of his views do not entail the meaninglessness of the theory of social justice or distributive justice.

Despite Hayek's controversial and polemical expressions about social justice, it is quite astonishing that in the same book he says the differences between his view and John Rawls's theory of justice are "more verbal than substantive,"[3] and that he agrees with Rawls on the "fundamental point" that principles of justice apply to the rules governing social institutions and processes, and not to the distribution of specific goods among individuals.[4] Hayek believes that many of Rawls's readers have not correctly understood his intent and have therefore overlooked his theory that the distribution resulting from institutions—regardless of its nature—is rightful and just. However, there is no doubt that in Rawls's theory, the justice governing institutions is explained by the concept of distributive justice: "The principles of distributive justice explain the rightful allocation of benefits and the burdens of social cooperation."[5] Moreover, Rawls considers justice the most important virtue of social institutions. Therefore, the question arises as to what plausible interpretation can be offered for Hayek's claim of agreement with Rawls.

Some experts believe that the most reasonable justification for the convergence claimed by Hayek is to say that he simply did not read Rawls's work.[6] But some writers belonging to the leftist current say that if Hayek claims to agree with Rawls, there must necessarily be a flaw in Rawls's intellectual framework.[7] Contrary to the two preceding groups, it is claimed here that, at the theoretical level and normatively, Hayek can be considered a Rawlsian political philosopher. To this end, the following ideas will be briefly examined:

The importance of “pure procedural justice,” the irrelevance of merit in the theory of justice, the theory of the veil of ignorance, and the principle that entails that inequalities must be to everyone's advantage.

Before we briefly explore the aforementioned points, it is necessary to take a closer look at Hayek's critiques of social justice; critiques that appear to have been made largely on the basis of some debatable empirical claims but are, theoretically and conceptually, unwarranted and insignificant. And perhaps this is why Hayek's critiques of distributive justice theory—unlike the critical theories of Robert Nozick—have not been taken seriously among contemporary political philosophers.

The starting point of Hayek's argument is that “only human conduct can be called just or unjust,” and when we apply this concept to an event (i.e., a state of affairs), it is meaningful only if we hold that an individual is responsible for bringing about that event or has provided the opportunity for it.[8] Thus, Hayek holds that an event such as the distribution (of resources) can be just or unjust if we ascertain the existence of a human agent involved in its emergence and continuation. But from Hayek's perspective, human societies have formed based on a regular order that was initially the product of evolution rather than intelligent design. In the evolutionary process, human societies undergo their developmental course by rejecting rules that weaken social life and by selecting rules that sustain collective life. Hayek assumes that social justice or distributive justice is impossible within the heart of a spontaneous (or self-generating) order in large, free societies, that is, a market-based society.

Obviously, a theory of social order based on evolution does not necessarily lead to the negation of social justice. Although, no reason can be adduced that an evolutionary theory is oriented toward justice either. Hence, it is necessary to examine which conception of justice is incompatible with what Hayek calls a spontaneous order (an order based on evolution). Hayek's critique of social justice or distributive justice pursues a very limited aim. His claim is that in a spontaneous market-based social system, distribution according to an individualistic pattern based on merit is impossible. The theory of justice based on merit—which reflects utilitarian ethics—determines the criterion for individuals' deprivation or enjoyment solely based on their beneficial or harmful behaviors toward society. In other words, according to this theory, the fundamental rights of individuals depend on their degree of merit or desert, but Hayek says that the rewards individuals receive in a market economy do not correspond to their merit or natural endowment. The market is an arena for the play of skill and chance (or luck), and individuals' skill is in itself part of their constitutive (or hereditary) luck. But the important point is that Hayek acknowledges that

As we saw, Hayek’s critique of social justice concerns the concept of distribution based on individual merit. On the other hand, we know that Hayek’s fundamental assumption is that society is a system based on social interaction that secures a wide sphere of individual freedoms within the framework of specific laws. By considering Rawls’s theory of pure procedural justice and his denial of merit as a fundamental principle of justice, one can understand the reasons for Hayek’s agreement with Rawls in this area. Rawls says that the principles of justice apply to the rules governing institutions, not directly to distribution. The basic structure of society consists of a system of general laws, such as the rules governing contract and property. The issue of distribution among individuals arises from the fact that, within the framework of the freedoms that these rules provide, individuals engage in different choices. Individuals’ choices differ depending on various rules, and thus will lead to different systems of distribution. Rawls says that if a set of just rules governs the basic institutions of society, any distribution that takes place based on the voluntary interaction of individuals within the framework of these rules will be just (regardless of the nature of that distribution). In this way, distributive justice is one of the components of pure procedural justice. Just rules are not a means to achieve specific ends and results. Distributive justice is more like a gamble; if the lottery is conducted under free and fair conditions, the result, whatever it may be, is fair. One cannot deem a distribution just or unjust by fixating on the basket of goods distributed among specific individuals, independent of the institutional system from which it originates. [12]

Nevertheless, although Rawls’s theory of pure procedural justice implies that the principles of justice apply primarily and essentially to the rules governing institutions and not to distribution, he explains just institutions mainly through the concept of distribution, that is, through fair equality of opportunity and the advancement of the position of the least advantaged. So, can it not be said that the main and primary subject of discussion here is the matter of distribution? Of course it can; but it must be noted that here we are no longer talking about distribution among specific individuals. Rather, the fundamental issue is the distribution of social positions and statuses. In principle, individuals choose the lawful systems or institutions based on which the distribution of social positions becomes possible; then they interact with one another within the framework of the said laws; in this case, whatever the distribution resulting from such a system may be, it is just.

Rawls emphasizes that because each person’s life depends on interaction with others, individuals should not, by virtue of luck and good fortune, claim a greater share of the collective product. Rawls says it is necessary to evaluate the economic system (or institutions) from the perspective of the lowest social position. The meaning of this proposition is not that we should act to maximize the income of irresponsible and idle individuals—that is, those who do not engage in work and do not obey the laws. Rather, the purpose is that economic institutions should be evaluated from the viewpoint (that is, considering the situation) of the hardworking and law-abiding individual who, by fate, was born into a family that occupies the lowest position in the system of wealth and income distribution.

Inequalities Must Benefit Everyone

Thus, Rawls absolutely rejects the theory of distributive justice based on merit. But the question is, which theory of justice can be used in regulating social institutions? We know that from Hayek’s point of view, speaking of regulating institutions is generally an error and is, in fact, an instance of what he calls the “constructivist fallacy.” Hayek believes that constructivists mistakenly think that the social system is the product of the will and plan of a deliberate agent (for example, a ruler), and they neglect the fact that an evolved order may be more coherent and more compatible than artificially designed human systems.[13] Despite this, Hayek never claimed that spontaneous social evolution is always desirable and ultimately optimal. In principle, Hayek accepts that rules arising from evolution may need to be corrected through legislation.[14] Perhaps it is for this reason that he does not consider himself a conservative.

A more important point is this: the method Hayek proposes for measuring and evaluating social institutions has a distinctly Rawlsian tenor:

We should regard as the most desirable kind of society one that individuals, knowing their initial place in it would be determined entirely by chance, would be able to choose. (The obvious example of this is being born into a particular society). Given that the attractiveness of such a random selection for any adult individual depends on their innate personal skills, capabilities, and tastes, it is better to say that the best society is one in which we would prefer our children's place to be determined solely by chance. [15]

Although Hayek does not use the term "the most just society," there is no reason it could not be applied in this context. These sentences, which imply uncertainty about social status and inherited abilities, as well as a lack of knowledge about individuals' specific tastes and interests, are entirely akin to and consistent with Rawls's theory of the veil of ignorance. Under the veil of ignorance, individuals are unaware of their place in society: they have no knowledge of their class position or social status, nor of their fortune in the distribution of natural capabilities and endowments such as intelligence and physical strength.

Hayek also offers a specific principle for evaluating institutions, namely that any system which accepts inequality based on lack of merit for the sake of benefiting the general public is just, or at least not unjust.[16] This statement is entirely consistent with Rawls's general conception of justice: "All social values are to be distributed equally unless an unequal distribution ... is to everyone's advantage."[17]

Of course, Rawls's theory implies that for inequality to be to everyone's advantage, it must necessarily benefit those who are least advantaged. Hayek also implicitly acknowledges, "it may be reasonable to design the rules so as to tend to improve the chances of those who are relatively less fortunate." He does not deny this in principle and at the theoretical level, although he considers it unfeasible in reality. Hayek emphasizes that improving the chances of the least advantaged "can rarely be achieved through general rules."[18] But—as we said earlier—contrary to what Hayek supposes, this is precisely what is done through public income and subsidies in the education system.

Interestingly, Hayek himself admits that if he were to choose a society for his children to live in, he would not choose an aristocratic one, because in such a society, a large number of children would have no chance of joining the aristocratic class. Instead, he would seek to "choose a thoroughly industrialized society that does not allocate all the sweet fruits to a small number of individuals, but provides better possibilities and hope for the majority of the people in society."[19]

In any case, the aforementioned similarities in theoretical foundations bring Hayek closer to Rawls's egalitarian liberalism. Nevertheless, it must be acknowledged that Rawls's theory possesses a more pronounced egalitarian character than Hayek's view. To demonstrate this superiority, at least two reasons can be cited: the first reason concerns the importance and priority of equal political liberty (i.e., the first principle in Rawls's theory of justice).

Rawls was well aware that the inequalities legitimated by the difference principle (in his theory of justice) might increase to such an extent as to jeopardize the principle of equal political liberties.[20] Rawls believes that as long as we do not take steps to limit (or reduce) socio-economic inequality, or do not purge the political process of such inequality, enterprises and individuals of superior status will—despite formal equality in the electoral system—hold control over society. Hayek had no such concern; instead, he worried that individuals who have failed in the competitive market process (or competitive market) would resort to the instruments of state power to compensate for their defeats and failures, thereby intervening in the market mechanism. However, Hayek expresses little concern about the other side of this reality, namely the exploitation by wealthy enterprises and individuals of their extraordinary influence within the socio-political structure to alter the rules of the game in their own favor.

The second reason for Rawls's superiority rests on his theory according to which it is necessary to strive to maximize (or, more precisely, to maximally elevate) the lowest social position. In this principle, Rawls emphasizes that we must endeavor to divide what we have collectively produced equally, unless an unequal distribution benefits everyone.

The upshot of the present note is that Hayek's fundamental claim against social justice lacks a conceptual and theoretical basis. Essentially, Hayek's philosophical presuppositions do not necessitate or support his conclusions regarding the regulation of laws and the devising of policy. The origin of these inferences is a set of vague empirical evidence and claims, particularly concerning the impossibility of principles of justice in the external world. Hayek's critique of social justice and his defense of a market-based society is directed at minimizing the risk of tyranny; from Hayek's perspective, granting governments the power to regulate economic exchanges leads to the concentration of power, and market regulation—due to the corruption arising from concentration—constitutes the first steps on what he calls "the road to serfdom." The more governments' hands are free to control economic life, the more they will be able (or will desire) to oversee all aspects of people's lives. Hence, the freedoms of the capital market are essential for preserving political and civil liberties. [21]

Therefore, according to Hayek's view—which offers an instrumentalist defense of capitalism—the free market system is a socio-economic system for defending political and civil liberties.[22] Hayek—unlike Nozick—does not defend the economic system based on the free market on the grounds of an inherent right to private property; rather, he says that the right to property is an instrument serving the consolidation of democracy. Thus, it can be claimed that if the realization and stability of a democratic system requires it, the right to private property can be legitimately limited.

In this way, Hayek, by resorting to inconsistent reasons to demonstrate the impossibility of a stable political system that is an intermediate between a minimal state and a totalitarian regime—which he deems necessary for achieving full equality—and also through vague and ambiguous statements about fundamental normative concepts, has made great efforts to avoid egalitarian consequences.

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Endnotes

[1] See:

Friedrich A. von Hayek, Law, Legislation, and Liberty: A New Statement of the Liberal Principles of Justice and Political Economy (London: Routledge and Kegan Paul, 1982).

[2] Ibid., Vol. 2, pp. 33-80.

[3] Ibid., Vol. 2, p. xiii.

[4] Ibid., Vol. 2, p. 100.

[5] John Rawls, A Theory of Justice, Revised Edition (Harvard university Press, 1999), pp. 4, 8, 179, 50, 39 .

[6] Antony Flew, Equality in Liberty and Justice (New Jersey: Transaction Publishers, 2001), pp. 172-174

[7] Lawrence J. Connin, “On Diquattro, Rawls and Left Criticism”, Political Theory, 13, no. 1 (1985): 138-41 .

[8] Hayek, ibid., vol. 2, 31.

[9] Hayek, ibid., vol. 2, p. 87. For a scholarly critical analysis of this view of Hayek, see:

Steven Lukes, “Social Justice: The Hayekian Challenge,” Critical Review of International Social and Political Philosophy 11, no. 1 (1997), 73 .

Adam James Tebble, “Hayek and Social Justice: A Critique”, Critical Review of International Social and Political Philosophy 12, no. 4 (2009), 582-90 .

[10] Hayek, ibid., vol. 2, p. 87.

[11] Ibid.

[12] Steven Lukes, “Social Justice: The Hayekian Challenge,” pp. 73-74 .

Elizabeth Anderson, “So You Want to Live in a Free Society”

[13] Rawls, ibid., p. 76.

[14] Hayek, ibid., vol. 1, pp. 8-35.

[15] Ibid., vol. 1, pp. 88-89.

[16] Hayek, ibid., vol. 2, p. 132.

[17] Ibid., vol. 2, p. 70.

[18] Rawls, ibid., p. 54.

[19] Hayek, ibid., vol. 2, p. 131.

[20] Ibid., vol. 2, 132.

[21] Rawls, ibid., pp. 197-8; 247.

[22] The contemporary political philosopher Will Kymlicka says: Hayek's defense of capitalism is a contingent defense. Kymlicka adds that in the modern world, a necessary link between capitalism and civil liberties is not seen. In some countries governed by an unrestricted capitalist system, human rights violations were evident, such as the capitalist military dictatorships in Chile and Argentina, and also the McCarthy era in America. In contrast, countries like Sweden, which are based on a welfare state system, have an excellent record in guaranteeing and securing political and civil rights.

Will Kymlicka, Contemporary Political Philosophy (Oxford University Press, 2001), p. 102-103

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