Hayekian Social Justice.

• Author: Vallier, Kevin D.
• Position: F.A. Hayek - Critical essay

Despite F. A. Hayek's apparent rejection of the very idea of social justice, this essay develops a theory of social justice from entirely Hayekian components. Hayek recognizes two concepts of social justice--local and holistic. Local social justice identifies principles that can be used to judge the justice of certain specific economic outcomes. Hayek rejects this conception of social justice on the grounds that specific economic outcomes are not created by moral agents, such that social justice judgments are a category mistake, like the idea of a "moral stone" (Hayek 1978, 78). But if one understands social justice as the principles that ought to govern the social order as a whole, as John Rawls ([1971] 1999) did, then Hayek is on board. Hayek agrees with Rawls that we cannot use contractarian principles to evaluate particular economic outcomes, and he supports Rawls's attempt to identify the general principles that should govern social systems (Hayek 1978, 100). (1)

I argue that Hayek can be understood as adopting a principle of social justice that Rawls respected but rejected--namely, the principle of restricted utility (Rawls 2001, 120). Restricted utility combines increasing a society's average utility with establishing a utility floor below which no one will fall. So the Hayekian principle of social justice is this:

Society should be governed by the system of general rules that we can predict will maximize average utility with a utility floor. Hayek does not seek to restructure all of a society's rules at once, however, so Hayekian social justice does not license us to reconstruct society from the ground up.

Rather, the principle is a guide for engaging in "immanent criticism" of particular rules (Hayek 1973, 94-123). We should improve on our present order by asking whether particular rules are ones that we can predict will maximize average utility with a floor. So the application of Hayekian restricted utility is much more limited than the application of Rawls's justice as fairness. Yet it has considerable merit as a principle for just social reform. Hayek's commitment to immanent criticism thus leads to the following principle of reform:

Social and legal rules should be reformed by asking whether a new rule will predictably increase average utility and/or secure a utility floor for all members of the public. (2) Restricted utility thereby provides a principled basis for feasible social improvement, which we can use to approach, but perhaps never reach, a fully socially just society.

I begin by reviewing Hayek's critique of social justice to identify the form of social justice he embraces. I examine some passages in Hayek's corpus that suggest a contractarian framework for selecting principles of justice. I then advance a Hayekian contractarian argument for restricted utility and address a tension between the principle of restricted utility and Hayek's commitment to immanent criticism. I end by examining which political and economic institutions are socially just. Hayek's arguments for liberal constitutional rights, free-market capitalism, constitutionally limited democracy, and a modest welfare state help to show that these four institutions satisfy a principle of restricted utility. Thus, Hayekian contractors should endorse them. This means that Hayekian social justice requires liberal democratic welfare-state capitalism, and we should accordingly reform social and legal rules with the aim of establishing that politicoeconomic regime.

Hayekian Social Justice

Principles of social justice, Hayek argues, are meant to evaluate particular economic outcomes as just or unjust. But evaluating outcomes as just or unjust implies that these outcomes are produced by moral agency, either exercised well or poorly. Valid principles of social justice therefore imply that we can judge, say, particular distributions of income as just or unjust because one or more moral agents deliberately ordained the outcome. However, if, as Hayek thought, particular economic outcomes are not deliberately produced by moral agents, but rather by spontaneous order, then particular economic outcomes cannot be evaluated as just or unjust in principle. Such evaluations of justice and injustice are incoherent, like evaluating a stone as moral or immoral. The notion of a "moral stone" is absurd because a stone can be neither moral nor immoral (Hayek 1978, 78).

Let's assume for the rest of the essay that this critique of social justice succeeds. Interesdngly, even if the critique succeeds, Hayek allows that we can morally evaluate the justice of rules that govern society as a whole. As John Tomasi notes, Hayek thinks "[a] commitment to the ideal of a free society as a spontaneous order is compatible with the affirmation of some external standard of holistic evaluation, including a standard that expresses distributional concerns" (2012, 160, my emphasis). To illustrate, consider Hayek's assessment of Rawls's approach to identifying principles of justice:

[T]here unquestionably ... exists a genuine problem of justice in connection with the deliberate design of political institutions.... I have no basic quarrel with an author who ... acknowledges that the task of selecting specific systems or distributions of desired things as just must be "abandoned as mistaken in principle, and it is, in any case, not capable of a definite answer. Rather, the principles of justice define the crucial constraints which institutions and joint activities must satisfy if persons engaging in them are to have no complaints against them. If these constraints are satisfied, the resulting distribution, whatever it is, may be accepted as just (or at least as not unjust)." This is more or less what I have been trying to argue. (1978, 100, my emphasis, quoting Rawls 1963, 102) Hayek is explicit that we can make justice judgments about the rules governing the system as a whole. That is unquestionable. My aim here, then, is to develop a Hayekian conception of holistic social justice rather than particularistic social justice.

I should caution that Hayek rejects the Rawlsian approach to deliberately designing political institutions, as discussed later in this essay. Holistic social justice furnishes a method of improving the rules of social systems piece...