When fair is not just and just is not fair.

• Author: de Jasay, Anthony
• Position: Viewpoint essay

The dramatis personae animating this article are two ideas that exert an immense influence on human affairs but whose names are too often taken in vain. They are justice and fairness. Both, especially the latter, are employed freely to convey a wide variety of meanings and to characterize heterogeneous events or states of the world--a latitude that impairs their quality and usefulness as concepts and renders them apt for abuse. Between the lines that follow, I use the case of trade to explicate these ideas with the principal object of helping to distinguish between clear and unclear usage of each as well as to distinguish between the two (for they are sometimes treated as synonymous).

I limit the use of the words just and justice to such relations between human acts or the states they bring about, on the one hand, and rules (having certain defined properties as to origin and content) and distributive agreements free of force or fraud, where the acts or states do not breach the rules or agreements, on the other. (1) This manner of proceeding to an explicatum should commend itself to those who wish justice (or, of course, injustice) to be relatively easy to identify by virtue of the factual, ascertainable nature of rules and agreements, without recourse to some theory of justice.

Contrary to the idea of just and justice, the idea of fair and fairness can probably be explicated, if at all, only in terms of subjective sentiments that may be shared by many people, but rarely by all. The term fair is employed for the most part, though far from exclusively, to express approval of the relation between a consequence and the cause to which it is imputed. A reward is flair for any impartial observer if he finds that it properly relates to the act it is meant to recompense. The relation must satisfy some intuition; it must be a pleasing one. The word fair, of course, may signify aesthetic as well as moral pleasure. However, lest matters should start to look simple, the pleasure may be less than hearty; fair is quite frequently a grudging acquiescence in the "less than good." Whether rewards or punishments, gains or losses distributed among similarly placed individuals, are fair--that is, are pleasing to the impartial spectator--is in all likelihood a matter of whether the variables in question depend on such other variables as are deemed relevant to them by the spectator. Pay, for example should be some function of work or pains, not of nepotism or intrigue. Such a functional view of what is deemed fair favors distributions based on sharing rather than on excluding, and it may converge in the limit to strict egalitarianism. Finally, notice that notions of fairness are also applied to compromises between contradictory views of true or false and good or bad.

Justice and Fairness in Trade

It is pertinent to ask whether the insistent and recurrent demand that international trade--indeed, all trade--must be fair instead of merely free, is a just demand. Pondering the question, one is struck by the formless, elusive character of the notion of fairness and the near-universal practice of talking and writing about it as if it were clearly defined and commonly understood. It now seems to me that the right way to seek answers to the contested justice of trade or, for that matter, of any practice claimed to be unfair and in need of rectification, should pass through a scrutiny of the notion of fairness itself and an examination of the rivalry between it and justice. Among the four possible combinations of the two concepts--just and fair, unjust and unfair, just and unfair, unjust and fair--the last two need resolution.

A little more than half a century ago, the factor-price equalization theorem was enunciated. Since that time, its manifestation in international trade has become massive and conspicuous. The world did not wait for the theorem's enunciation to start whittling down factor-price differences; the process is presumably as old as exchange. However, for the lay spectator, the convergence of factor prices has become spectacularly obvious only recently. It has been brought along by the fast container ship, electronic mail, the rise of a sort of English as the world language, and wide-ranging inroads into tariff and nontariff barriers. As if this process were something novel, it has a little naively been given a name of its own, globalization. By and large, globalization has been conspicuously good for sellers of Asian light industrial goods and their Western consumers. It has raised Asian wages sharply and is still raising them; it has helped to keep measured inflation rates down the world over; and it seems to have enhanced the return on capital everywhere. Perhaps less noticeably, it has slowed down or stopped altogether the increase of the real wages paid for unskilled work in the Western world. Much of the equalization of productivity-adjusted labor costs is taking the form of Asian wages rising and Western ones standing still to let the former catch up. Thus, free trade does produce some immediate nongainers; and the Western producers of light industrial goods who are driven by Asian competition to seek new livelihoods are clear losers, at least in the short run.

Because globalization generates not only gains but also losses, a debate is provoked about whether it is a good or a bad thing. If it is bad, the further question is what, if anything, ought to be done about it.

Derived in terms of some measure of total income or output, the answer is plain enough. Subject to the problems of aggregating different goods and services into a homogenous sum, world income is higher if trade is freer. However, a rise in the total, a good thing, may well involve changes in its distribution, some of which may be bad; the relative stagnation of Western wages for low-skilled workers and the serious predicament of many Western light-manufacturing industries under free trade are widely judged to be bad things.

Conducting the debate in terms of utilities rather than of income aspires to make allowance for such distribution effects. Instead of netting out income losses against income gains, the utilitarian approach seeks to strike a balance between utility losses and gains by overcoming the lack of a common measure of the utilities of different persons. Because there is no scientific, objectively ascertainable way of doing so, this approach resorts to methods that have at least some irreducible subjective element, such as various "compensation tests" or the construction of hypothetical "social welfare functions." Stripped to its core, the utilitarian attempt to strike a balance between various distribution effects is tantamount to a subjective judgment that the good effects outweigh the bad ones, a judgment that an individual cannot make for others or justly impose on others. (2)

In terms of the globalization debate, free traders judge the gains of the gainers to matter more than the losses of the losers, and protectionists argue the contrary. I feel perfectly justified in siding with the free traders without having to pretend that my choice has any more support in modern welfare economics than does its opposite.

A different strand of the debate avoids the divide between good and bad. It runs instead along the divide between just and unjust. If it is the case (and we must...