Is Capitalism Just?

            The analysis of socio-economic systems and their consequences on society have always been at the forefront of philosophical debate. Whether one system, such as capitalism, can be considered more or less just than another system largely depends on what the word justice means. In order to answer the question “Is Capitalism Just?” there must be a distinction made between capitalist systems that either are currently used, or have been used at some point in the past from the philosophical underpinnings of a pure capitalist system. The latter represents the criteria for this analysis and complements any other analysis that seeks to thoroughly understand the concept of justice.

What is Justice?

John Rawls, who penned A Theory of Justice, sought to identify a standard that could be used to evaluate social institutions and reveal the ideal just society. The real benefit of Rawls’s work was that it gave its readers and students an excellent way to capture the full meaning of what justice as fairness is and how it can be used as a benchmark and starting point for the justification of socio-economic systems and their institutions. Rawls’s conception of justice, or the “original position”, identifies the conditions under which human beings must exist in order to create a just society. These conditions are that every individual is free, equal, rational, educated and impartial. The last condition, impartiality, is based on Rawls’s concept of the “veil of ignorance”, in which individuals are completely unaware of their affiliation to any group, race, or sex and are also unaware of their personal preferences. Rawls established complete equality so that no man in the original position is different from any other. By doing this Rawls rightly came to the conclusion that justice is fairness and that under the conditions of the original position there are limited choices of socio-economic systems that could be considered just.  However, any practical application of Rawls’s conclusion assumes that everyone born into this world is equally valuable to society and should thus be granted the same or similar means of subsistence. Furthermore, Rawls concedes in his “difference principle” that some socio-economic inequality is necessary to motivate people to fulfill certain duties within society (Sterba, p425). However, the necessary inequality only goes so far as to be advantageous to the bottom tier of society. Justice as fairness would certainly pose a threat to the justification of capitalism because the main focus of the socio-economic system is freedom not fairness. To justify capitalism as just or fair, the fundamental relationship between freedom and justice must be revisited. President Bush, in his second inaugural address stated that there could be no justice without freedom. Therefore, I would submit that instead of justice as fairness the phrase should read justice as freedom.

Capitalism contrasts with Rawls because it is an individual’s liberty that is used as the standard for evaluating social institutions not justice as fairness. As Ayn Rand describes in her essay “What is Capitalism?”, capitalism is “a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.”  Every individual must acknowledge that without society, he or she would exist in a state of nature. Philosopher John Locke calls this natural state a “state of perfect freedom” where no man depends upon the will of another man (Morgan, p626). Locke also identifies the existence of the law of nature that governs those in a state of nature. This law is reason and it teaches us that no one has the right to deprive another of his life, health, liberty or possessions (ibid). Locke is referring to man’s natural and free consciousness. This free mind prompts those seeking to create a society to also recognize and protect the need for voluntary, unimpeded choice as the principal reason for man’s existence on earth.

Immanuel Kant also advocated that freedom is a presupposition of reason. Kant develops the fact that a person’s individual freedom is something that is invaluable to that individual (Sterba, p289). For example, even if it could be proven what the outcome to a situation would be, such as in Rawls’s original position, the actual process of choosing is unique to each individual. The importance of this fact is that the freedom to make that choice and furthermore, follow through on that choice is fundamental to the basis for all moral reasoning, or justice. This is the relationship between freedom and justice. Man and woman require a just society to promote their freedom to choose. While this freedom is obviously restricted for the sake of private and national security, it should be noted that incidents like the shootings at Virginia Tech are the cost of living in a free society. While picking up a gun and killing someone else without cause is most certainly an example of injustice, the fact that society protects one’s freedom to do so is a perfect example of justice. If society restricts one’s freedom, even for his own benefit, it is indeed taking something from him.             Therefore, a just society would consist of one that supported the freedom to choose and for those choices to have their consequences.

Like Rawls who advocates a heavily egalitarian society, the establishment of equal basic liberties is at the forefront of capitalistic society. Without the guarantee of one’s individual rights being upheld, capitalism will ultimately fail and society under a purely capitalistic system would indeed break down. John Hospers commented that “People often defend the rights of life and liberty but denigrate property rights, and yet the right to property is as basic as the other two; indeed, without property rights no other rights are possible. Depriving you of property is depriving you of the means by which you live…” (Sterba, p429).     

Ultimately we as individuals are responsible for ourselves and it is not the position of capitalistic society to give us anything outside of the protection of our basic liberties which include property rights. Since a purely capitalistic society would give nothing else but this protection, we owe nothing in return except the pledge that we will not impose on the rights of others. The reason this protection must exist is because there are always those who seek to take our liberty and freedom away. This is the justification for society to extract some freedom from citizens in order to effectively police its population. When evaluating a social system as being more or less just than another, I find it is more valid to start this process from the standpoint that in reality, justice is not an inherent quality in all men but freedom is.  Ultimately the individual’s right to succeed or fail in life and the respective consequences of either outcome must be protected.

Capitalism, as a socio-economic system, is largely agreed upon by most to be a practical, working system. The inequalities and exploitation it breeds are not the primary functions of capitalism, but rather an expression of how the freedom it protects can be abused. Aristotle’s concept of virtue has a lot in common with the capitalist. The capitalist, who works to organize the ideas of researchers, scientists, philosophers and the like, delivers these ideas to society in the form of a product. It is indeed a complex and risky task that requires much skill and effort. The capitalist must also persuade and reason with potential clients and partners in order to make the best argument for why they should exchange their earned money for his product. The capitalist’s perseverance in these matters is indeed virtuous because society largely depends on them not only for luxuries but also for necessities. To become a capitalist, one does not have to be part of an elite class. Rather, it is free to anyone with the knowledge and determination to make it happen. Those born into affluence may have the financial resources to act as capitalists, but in order to be successful they will still require the skills and knowledge that can only be achieved through education and experience.

Under communism or pure socialism, society will fail to harshly penalize those who consistently subtract more value than they add. Instead, the redistribution of wealth under socialist communities serves to institutionalize the definition of injustice by taking what one man has earned and giving to one who has not, on the basis of it being for the good of the community. From this standpoint, socialism restricts the opportunities available to society because the added regulation of commerce needed to sustain such a society (which is forced) further restricts the capitalist’s ability to bring to society what it wants. Without demand, there is no incentive for capitalists to provide the supply.  

Karl Marx observed that the capitalist system exploited the proletariat for generations past and to come, but it should be noted that under a capitalistic system we all have to live independently and take for ourselves what we have earned. This matches the reality that none of us choose to be born rich or poor but we do choose to make good decisions or bad.  The rag to riches story is certainly few and far between but its very existence underlines this point.

The Reality Principle

The world’s problems are rapidly growing. Global warming, population growth, peak oil, etc. will all have an enormous impact on global society. Socialist and/or egalitarian societies hedge us against other problems such as disease, poverty and lack of education but leave us largely exposed to a variety of other problem. As oil supplies run thin, where is the technology going to come from that makes alternative energy sources plausible? They come from the speed at which capitalist societies can spur innovation and quick production. On a personal note, the reality of non-capitalistic societies is that it lowers the bar of human progress and achievement. The speed at which society evolves through technology may be the single most important factor for the coming crisis with global warming and with peak oil. Indeed, our very survival as a global society containing more than 6 billion people may rest on the shoulders of the capitalist.