Commutative Justice

A Liberal Theory of Just Exchange

Carl David Mildenberger

• Publisher: Routledge
• Year: 2020
• Print ISBN:
  9780367346799
• eBook ISBN:
  9781000046731
• Topic: Philosophy
• Subtopic: Philosophy History & Theory

This book develops a liberal theory of justice in exchange. It identifies the conditions that market exchanges need to fulfill to be just. It also addresses head-on a consequentialist challenge to existing theories of exchange, namely that, in light of new harms faced at the global level, we need to consider the combined consequences of millions of market exchanges to reach a final judgment about whether some individual exchange is just.

The author argues that, even if we accept this challenge, the effect of it is minimal. For different reasons, normatively problematic collective market outcomes like externalities, monopolies, violations of the Lockean proviso, inequality, and commodification do not pose particular problems to the justice of market exchanges. He outlines the various conditions a market exchange needs to fulfill to be considered just from a liberal background and in light of the new harms. Ultimately, he shows, it is not the market which is to blame; if we want to tackle issues like global warming or global economic injustice, we should not blindly follow the intuition that we best restrain and regulate markets.

Commutative Justice is unique in its focus on justice in exchange rather than on end-state distributive justice, and the way in which it addresses the new harms we are facing today. It will be of interest to researchers and advanced students in philosophy, politics, and economics who are working on questions of economic justice.

1 Introduction

We exchange things on the market day in, day out. Food, housing, labor, transportation, you name it. Market exchanges have become the predominant form of economic transaction in contemporary Western societies. But how can we tell whether these everyday exchanges are just? Here is a troubling thought. Maybe it is not enough that nobody is deceived or exploited in such exchanges, or that the parties to the exchange act freely and voluntarily. Maybe we also need to take into account the combined effects of millions of individual exchanges. For is it not true that our seemingly harmless exchanges, if taken together, collectively cause things like global warming or economic inequalities, furthering “market imperialism”, or the overexploitation of our planet?

What, then, is a just market exchange? This is the central question of this book. In order to answer it, I develop a liberal theory of justice in exchange. More precisely, I develop a conception of commutative justice – for commutative justice is that kind of particular justice whose subject matter is market exchanges. A conception of commutative justice proposes a set of conditions a market exchange has to fulfill in order to be just.¹ Therefore, the main theme which runs through the individual chapters of this book is to identify those conditions exchanges need to fulfill in order to be just. And if we find a given market exchange to fulfill all proposed conditions of commutative justice, then we can rightly call this market exchange just.

What drives this book is to address a consequentialist challenge to existing theories of justice in exchange – notably to liberal and libertarian ones. This challenge is best understood in light of what Lichtenberg (2010) calls the new harms. She explains this notion as follows. Traditionally speaking – or when talking about “old harms” – there always was a rather tight connection between those who harm, the harms they cause, and those harmed. The general theoretical idea of how to evaluate harming behavior was that individuals are primarily responsible for the harm which their actions are sufficient to produce (Hart and Honoré 1985). The resulting picture works rather well for cases in which, say, Judith breaks Tony’s nose by punching him in the face. This idea of how harming generally speaking works also underlies important normative principles, like the liberal harm principle.

Unfortunately, Lichtenberg continues, things sometimes tend to be more complicated today. Take the example of climate change. It seems fair to say that no individual’s action is the cause of global warming. Rather, an individual’s action “makes at most a causal contribution to an overall effect that may be large and significant” (2010, 561). It is harms like these, which are collectively caused, but for whose emergence no individual’s actions seem to make any difference with respect to whether they emerge and how big the harm caused is, which Lichtenberg refers to as new harms. The main problem we face is that new harms do not seem properly reducible to individual wrongdoing, which makes it so difficult to correctly evaluate them from a normative perspective.

Now, market exchanges – the millions and millions of market exchanges we effect each day, like buying airline tickets, and fuel for our cars, and oil for our heating, and so forth – often seem closely linked to new harms. Does not this somehow morally corrupt them? Might we not conclude that even individual market exchanges are unjust in light of the overall effects of millions of market exchanges taken together? This is one way to formulate the consequentialist challenge which drives this book. In light of collectively caused problems like global warming, global economic injustice, market imperialism, and overexploitation of natural resources, it might be insufficient to consider a market exchange just as soon as it is non-coercive, non-deceptive, non-exploitative, and so on. Put differently, when faced with new harms, it seems like when determining whether an exchange is just, we cannot exclusively focus on the act of exchanging itself, as traditional liberal theories of justice in exchange do.

This book acknowledges that the consequentialist challenge is legitimate. Acknowledging new harms acts, so to speak, as the spark which forces us to move beyond existing theories. I explicitly tackle the new harms we are facing today and examine their impact on theories of justice in exchange. In this sense, my conception of commutative justice updates existing theories.

From a classificatory standpoint, commutative justice is a subspecies of justice in exchange, which in turn is a subspecies of justice in transfer (cf. Nozick 1977, 150–53). That is to say, there are many ways to transfer goods other than by exchange (e.g. gifts), and there are ways to exchange goods other than by market exchange (e.g. barter). What commutative justice has in common with justice in exchange and justice in transfer is its focus on determining the justice of procedures. Unlike distributive justice, commutative justice is not concerned with judging whether a given outcome is just and how we are to tell. By contrast, commutative justice is about whether a particular kind of procedure is just.

Commutative justice also is distinct from justice in acquisition or from rectificatory justice. Justice in acquisition deals with questions of whether the appropriation of previously unheld things is just. By contrast, commutative justice is about the redistribution of held things. This is a characteristic it shares with rectificatory justice. But whereas rectificatory justice has the particular goal of rectifying injustice by a redistribution of held things, commutative justice does not aim to rectify.²

A brief comparison to Nozick’s (1977, 160–64) approach to justice in transfer might help to further clarify how I delimit commutative justice from other kinds of particular justice, my chosen emphasis within the domain of commutative justice, and how it shapes this book. As I am exclusively interested in commutative justice, I by and large ignore what leads up to the market exchange in question, and notably whether the situation right before the market exchange is just or unjust. This is done for analytical purposes. As I try to isolate what is just or unjust about the market exchange, I am not interested in whether the situation right before the exchange is just or unjust. Such a judgment would belong to the sphere of distributive justice.

Compare this to Nozick’s approach in his Wilt Chamberlain example. He invites us to assume that we start out in an initial situation which complies with our favored principle of distributive justice. This move likewise excludes considerations of distributive justice with respect to the situation right before the exchanging from influencing his subsequent analysis of justice in transfer. This methodological stance also underlies this book. I am asking the following type of question. If we assume that we start out from a just situation – what could still go wrong with the subsequent exchanging?³

However, unlike Nozick, I do not also ignore what comes after the exchange. Nozick basically holds that a voluntary (i.e. non-coercive and non-deceptive) exchange is just no matter what consequences it brings about (1977, 150). That is to say that executional considerations – that is, considerations related to what is done during the establishment of the terms of exchange and in the course of exchanging – are sufficient to determine whether an exchange is just. By contrast, what motivates this book precisely is the idea that we cannot determine whether a market exchange is just irrespective of its consequences. I argue that consequential considerations matter for commutative justice. And I show which consequences of market exchanges are apt to render an exchange which brings them about unjust. Put differently, I argue that even if all of Nozick’s conditions for a just exchange are fulfilled (and many more executional conditions alike), the consequences of a market exchange may still render that exchange consequentially unjust. And the purpose of this book is to work out which consequential conditions a complete conception of commutative justice also encompasses alongside executional ones.

The focus on consequences is what makes this book stand out from other treatments of commutative justice (e.g. Aristotle Nicomachean Ethics V.5; Cohen 1995, chap. 2; Hayek 1973; Nozick 1977, 149–82; Rawls 1971, 74–75, 239–42). Whereas a lot of work has been done on issues like coercion, deception, or voluntariness and how they affect the justice of market exchanges, I feel not enough work has been done with respect to how the consequences of market exchanges influence their justice.⁴ In turn, I will not have much to say on how to distinguish, say, coercive from non-coercive exchanges. I touch on executional conditions – and readily admit that a just market exchange must not feature the use of force, coercion, or deception, and has to be consensual and non-exploitative. But this is mostly for reasons of completeness and to have such considerations, as it were, out of the way.

Besides the fact that talk of consequences is suspiciously absent in existing theories of justice in exchange, there is at least one other, more general, reason why we should care about an answer to this book’s central question of what a just market exchange is. This is because it is also central to a crucial concern of ours. Namely, the concern of what a just system for administering the economic benefits and burdens in a society looks like. If we are to judge the justice of such an overall system, we cannot do so without judging the redistributive procedures employed within this system. To be sure, our main concern might be the distributive outcomes a system brings about. But whatever the distributive outcome of a given system may be, if it is brought about by redistributive procedures like, say, violence and theft, there seems to be something deeply wrong with that system.

Market exchanges are a procedure employed in most contemporary systems of this kind. Arguably they are the most important redistributive procedure nowadays – given the frequency with which they are effected, the amount of value redistributed, and their truly global, transboundary bearing. For market economies, a particularly widespread kind of system in contemporary Western societies, they are the characteristic, even the eponymous procedure employed.⁵ This is why I am interested in what a just market exchange looks like.

Given the impetus of the move of fully acknowledging that consequences matter, one might expect that, by the end of the book, I will have identified all kinds of new consequential conditions for market exchanges. Prima facie, granting that the consequentialist challenge is legitimate seems to possess the potential to “open the floodgates”. But this is not what I find. Broadly speaking, I find that externalities, monopolies, violations of the Lockean proviso, commodification, and inequality are not reasons of commutative injustice. For different reasons, these normatively problematic collective market outcomes do not pose particular problems to the justice of market exchanges. Thus, while I argue that the consequentialist challenge is legitimate, I also find that it can be overcome. Overall, the effect of the challenge on a liberal theory of justice in exchange, surprisingly, is minimal.

This also means the following thing. Many theories and arguments simply imagine away phenomena like, for instance, externalities. Footnotes reading “I assume that no externalities are present” or “In my model market power is absent” are legion. This is a decidedly anti-realist take. But even if we do not imagine away complicated new harms, and if we open our eyes to all kinds of potential consequences and emergent properties of market exchanges, a liberal theory of justice in exchange may remain simple. A more realist conception of commutative justice is not a drastically enlarged one. I find an expansion of the domain of commutative justice to be appropriate – especially in light of thereby taking the new harms seriously and granting them the attention they deserve. But this does not lead to an inflation as regards the conditions market exchanges have to be fulfill in order to be just.

Plan of the Book

Structurally speaking, the book is divided in two parts. In the first part (Chapters 2 and 3), I will lay the foundations for the analysis of consequential commutative justice in the second part. Notably, these foundations include a definition of what a market exchange is (Chapter 2) and an argument as to why we cannot judge whether a market exchange is just completely irrespective of its consequences (Chapter 3).

Besides these main functions, both chapters in the first part also have subsidiary roles to play. Chapter 2 not only defines market exchanges, but also discusses their function (Section 2.3). Knowing this function will, among other things, be important for understanding why we can never judge whether a market exchange is just irrespective of its consequences. Chapter 3 not only argues why consequential considerations form a part of the domain of commutative justice but also establishes which particular consequences we should focus on in the second part and why (Section 3.3). It also gives a brief tour d’horizon as regards the more traditional, executional conditions of commutative justice (Section 3.1).

Taken together, Chapters 2 and 3 establish what exchanges are, how they are traditionally evaluated from the perspective of justice in exchange, and what the new challenge to this traditional understanding is. In the second part of this book, which comprises Chapters 4 to 9, individual aspects of this bigger challenge are addressed one by one.

The overarching question of the second and main part of the book is which consequential conditions a market exchange has to fulfill (on top of the classical executional ones) in order to be just. What unifies the chapters of this second part is the methodological approach used. It is characterized by four aspects. Throughout the second part I wi...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Contents
• Acknowledgments
• List of Figures
• 1 Introduction
• Part I Foundations of Commutative Justice
• Part II Commutative Justice and New Harms
• Index