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The impact of social justice on the economy

 3 min read / 

Following the work done by Thomas Piketty, a lot has been said on the link between wealth repartition and economic growth. The main stream idea is that wealth needs to be “well” distributed so that some do not just spare what they cannot spend and others struggle to live a decent life. It is quite common to talk about a “fair distribution” of wealth, or “social justice”, as if a single and simple definition of “social justice” even existed. Usually people define “social justice” as:

“justice in terms of the distribution of wealth, opportunities, and privileges within a society”

Oxford Dictionary

We prefer a famous definition put forward by John Rawls (A Theory of Justice, 1975), who defined two principles :

The first principle: “First: each person is to have an equal right to the most extensive basic liberty compatible with a similar liberty for others”

The second principle: Social and economic inequalities are to be arranged so that

(a) “they are to be of the greatest benefit to the least-advantaged members of society, consistent with the just savings principle (the difference principle)”

(b) “offices and positions must be open to everyone under conditions of fair equality of opportunity”.

Indeed as far as people have equal access to work position, society ensures the best possible repartition of workforce through the economy, and gives no ground to a feeling of unfairness, or social unrest. The goal behind social justice is to create a better working world. Social justice aims to support a society in which people feel free and all share the same chances to achieve the most sought for positions. Therefore without social justice, a society simply cannot life long, it will come a time when people want changes and will make these changes happen. A recent and very related example is simply the Occupy Wall Street movement claiming “we are the 99%”, meaning we are the 99% of total population who have not benefited from growth over the past years. The top 1% of US tax payer acquired 93% of total new wealth created between 2009 and 2010.

However there is one thing we need to remember about social justice, it is that we should not always do what we think the best is in behalf of social justice. At the end of 18th century, the British government put in place “the Speenhamland System”, generally referred to as part of the “Poor Laws”. The idea behind the Poor Laws and Speenhamland System was very generous and kind, it was to provide everyone with a “decent” revenue so that they could live with dignity. In The Great Transformation, 1944, K Polanyi demonstrated how badly the Poor Laws affected the English economy, by creating an environment characterized by an unfair competition.

Nonetheless, according to Marx fairness and equity are irrelevant, the real question would be what is necessary and unavoidable in a given production system. This implies that social justice is a develop country issue, and we agree with this idea. If we just have a look at how the industrial revolution happened in Europe (especially in the UK and France) and how countries like South Korea, Hong-Kong or Singapore became over a relatively short period of time wealthy places, we cannot ignore that social justice and workers’ warfare was clearly out of the scope of the question. In short, we agree with Marx on this point, even if it seems chocking to many people, but social justice is a luxury that only developed countries can afford, and for those countries, it is not really a luxury it is an obligation.

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