Social Justice, Public Goods, and Rent Seeking in Narratives.

• Author: Geloso, Vincent J.
• Position: Viewpoint essay

Social justice, as a concept, has long been considered inimical to the classical liberal tradition (Nozick 1973, 1974; Hayek 1976). To be fair, there is much to criticize about the concept. The definitional fluidity of the term social justice and its frequent deployment for "activist" political endeavors cast doubt upon its scholarly rigor (Hayek 1978). However, where there is chaff, there is wheat and thus the possibility of salvaging some parts of the social justice concept to serve both normative and positive ends (Tomasi 2012, xvii-xx). Sorting the wheat from the chaff is the aim of this paper. To do so, we introduce the concept of "rent seeking in narratives," which, as we argue, takes the best concepts from the literature on social justice to make it a relevant tool for social science and classical liberal thought.

Throughout the article, we assume that abstract and general rules that apply equally to all are the most conducive to improvements in all forms of liberty and living standards (Hutt 1966; Hayek 1976, 1988; Schmidtz and Brennan 2011). General rules constitute a form of open orders that are normatively superior to closed-access orders (North, Wallis, and Weingast 2009). The concept of rent seeking in narratives starts with the assumption that the creation of rules of cooperation is a public good. The rules fall on a spectrum between the extremes of open-access orders and closed-access orders. However, we argue there can be competition for the production of a certain set of general societal rules in a way that favors a given coalition of interest. The more this practice occurs, the more opportunities will exist for rent seeking. Once a given set of rules is established, narratives can then be built to increase the cost of replacing the given set of rules or acting in ways that fully dissipate the existing rent for the beneficiary group. (1)

This structure in part salvages the idea of relational equality (Anderson 1999) and fully conserves its close cousin "euvoluntary exchange" (Munger 2011, 2017; Guzman and Munger 2014). Because these concepts are taken to be equals of F. A. Hayek's claims that we need general and abstract rules that apply equally to all so as to permit welfare-enhancing social cooperation, deviations from these rules reduce well-being. Rent seeking to shape rules in ways to benefit one group is by definition a deviation (Tullock 1967b; Krueger 1974). The rent-seeking groups can see their rents dissipated by other groups who push either for general rules or for rules to their own benefit. They must thus resist this push by increasing the cost to others of contesting the established rules. One way of doing so is to shape social discourse so as to increase the cost of holding views that fall outside of the existing general rules (Roback 1989; Kuran 1995; Grynaviski and Munger 2017).

Distributive Justice, Relational Equality, and the Generality Ideal

When during the 1960s and 1970s classical scholars criticized the concept of social justice, they equated it with distributive justice in the sense of greater equality of outcomes (Nozick 1973, 1974; Hayek 1976). This distributive justice, they argued, would generate the seeds to its own destruction as agency on the part of individuals would create deviations. The criticisms assembled were deemed convincing to a degree sufficient to warrant a restatement of what social justice meant (Sen 2000, 68-69). The reply that has emerged is that social justice is about relational equality (Anderson 1999; Schemmel 2012). Simply put, relational equality holds that the way in which one individual is treated ought to extend to all other individuals. Differential treatment, positive or negative, invites stigma that may have persistent effects (Kim and Loury 2018). The main value of this restatement is that relational z we quality can persist in spite of legal equality even if there are interconnections between the two (Reeves 2018). Thus, invisible forces at play lead to lesser outcomes for certain groups (e.g., de jure racial equality accompanied by de facto inequality in practice). Moreover, because relational inequality fosters stigma, it discourages the development of self-respect (i.e., independence) (Reeves 2018).

Described as such, relational equality resembles Hayek's generality principle whereby rules ought to be abstract and general and apply to all (Hayek 1988; see also the restatement in Martin 2017). It also bears great similarity to the "open-access" orders described by Douglass North, John Wallis, and Barry Weingast (2009). In open-access orders, "all citizens have access to the political and economic systems, and they have the right to form organizations," which in turn sustains "impersonal exchange and allow[s] all citizens to compete for political control and for economic rents, which are continuously eroded as a result of this political and economic competition" (van Bavel, Ansink, and Van Besouw 2017, 111). In contrast, in "limited-access orders" relations are between the powerful, who create a hierarchy in which they, at the top of the hierarchy, extract rents that cannot be dissipated by political and economic competition. Both the generality rule and the open-access orders are conducive to widespread improvements in living standards. Limited-access orders and discriminatory rules are less conducive to economic growth (see notably Mahoney 2001 for an empirical example). "Relational equality" entails, at the very least, a legal equality to contest arbitrary hierarchies--thus a similarity with the open-access orders. At the very least, it also shares similarities with the generality rule because all must receive equal treatment.

Relational equality does not necessarily entail redistributive efforts, however. To be fair, most of those who invoke the concept do so to justify some redistribution. (2) Thus, it does differ modesdy from Hayek's generality principle and North, Wallis, and Weingast's "open-access orders," on which classical liberals rely. However, there are steps that generate a marginally more equal society in relational terms but do not require redistribution and would allow classical liberals to follow in a similar direction until a crossroad is reached. Relational equality can fit within a classical liberal policy course of "first, do no harm" with regard to inequality (Geloso and Horwitz 2017; Geloso 2018; Novak 2018). This type of policy approach requires the removal of any form of regressive redistribution whereby one group is treated differentially in a nefarious way (e.g., through tariffs, regressive taxation and regulations, corporate welfare, and also directly oppressive measures such as racial segregation). As a consequence, a policy that eliminates an existing regressive redistribution will marginally move us closer to more relational equality. Thus, there is some mileage to be done between those who are reluctant to adopt redistributive policies but want relational equality and those who argue for relational equality as the end of redistributive policies. The very first step toward relational equality is the elimination of the policies that formalize relational inequality. There is some...