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The Idea of Justice in Political Economy

by Gustav Schmoller

1881




Annals of the American Academy of Political and Social Science
Volume 4; (1893…4)

German edition: Jahrbuch fur Gesetzgebung Verwallung; und
Volkswirtschaft。
volume 1; new series 1881。
Translated by Ernest Halle and Carl Schutz


    Is there a just distribution of economic goods? Or should
there be? This is a question which is raised again to…day; a
question which has been asked as long as human society and social
institutions have existed。 The greatest thinker of ancient
history asked the question and thousands after him have repeated
it; sages and scholars; great statesmen and hungry proletarians;
thoughtful philanthropists and enthusiastic idealists。
    To…day the question seems less opportune than ever。 Even
those who pride themselves on their idealism declare it to be one
of the useless questions which nobody can answer。
    Aristotle's ideas of distributive justice are looked down
upon as antiquated and set aside by the progress of science。
Comparing superficially the phenomena of nature with the social
processes; Darwin's theory of the struggle for existence; which
permits the strong to oppress the weak and excludes all
possibility of a just distribution of earthly possessions; is
brought into play。 Many political economists also disregard the
question; the more so the father they are removed from
philosophical inquiries; and the more they delve into special
questions remaining; despite many concessions to modern schools;
in their fundamental views in the beaten paths of English and
German dogmas; which know no other categories than demand and
supply。 They have; as a rule; a vague; half…conscious feeling
that socialism demands a juster distribution of goods; and hence
the conservative citizen and friend of order has no choice but to
oppose this idea。 Those who harbor such thoughts and feelings
place themselves; it is true; in the sharpest contrast to the
great founders of modern social science。
    No one was ever more convinced that his proposed reforms
would effect a more just or indeed an absolutely just
distribution of goods than Adam Smith or Turgot; or their sincere
followers。 Faith in the justice of its demands was the backbone
of the economics of natural law。 As a consequence of 〃natural
freedom and justice;〃 Adam Smith requires freedom of migration
and trade。 To the greatest disciple of Adam Smith; for thus have
Ricardo's ideas been recently correctly summarized; free
individual competition appears to be truest justice to all
laboring humanity。 This is not accidental。 No great social or
economic reform can conquer the sluggish resistance which opposes
it by merely showing its utility。 Only when it can be made to
appear that what is demanded is the demand of justice; does it
inflame and move the masses。 For years I have watched in public
discussions and in economic publications hen and where the
question of justice was drawn into economic matters; and I have
found that involuntarily it occurs almost everywhere。 In
discussing the bank question; the opponent of unsecured notes
declares them to be an injustice; when duties are proposed; the
free…trader claims first that they are unjust; then immoral; and
only in the third place that they are economically harmful。 In
all discussions about the change in the German customs policy of
1878; both sides tried to prove that what the opponent desired
especially injured the working man and the small capitalist; and
thus affected in the most unjust way the distribution of income
and wealth。 A well…known politician; who declares the discussion
of justice in the distribution of income and wealth to be
superfluous; falls into the same mistake with which he reproaches
his opponents; in his polemic against Marx。 He declares the
present distribution of wealth in Germany to be legitimate;
because it was not the possession of colonies; not the work of
slaves; but the honest labor of German citizens which created
this wealth。 He thus unconsciously calls attention quite
correctly to the central idea which to…day governs the popular
mind in regard to the just distribution of wealth。 A leading
speaker of the free…traders; in the Reichstag; said that to…day
the naive advocacy of low wages dare no longer venture into the
light。 To…day we consider conditions economically sound only when
they guarantee to each participant in the work a just
participation in the earnings。 And he adds: 〃The economic ideal
is reached when the greatest production and the most uniform
distribution among the participants of the profits earned
coincide。〃
    Whether a just distribution of goods exists in reality or
not; a question which for the present I will leave unanswered;
still it is always spoken of; there is a general belief in it;
this belief is speculated upon; and it has its practical
consequences。
    This brings us to the correct formulation of the question
with which we must begin。 We would not from any principle
whatsoever logically deduce a formula whose strict application
would at all times produce justice; we would simply and modestly
put the question; How does it happen that economic transactions
and social phenomena so often bring forth a favorable or adverse
criticism which asserts that this is just; that unjust? When we
have a correct answer to this; then it will be easy to draw
further conclusions and to decide what force; weight and
influence this approving or disapproving judgment will exercise
retroactively on the social and economic phenomena。

                        I

    Even he who reduces all human impulses and actions to the
feelings of pleasure and pain must admit that; as far as we know
human nature; there are; besides lower impulses; higher
intellectual; aesthetic and moral ones。 They give to life those
ideal aims; from them grow those conceptions which accompany and
influence all human life; all actions; all institutions; as ideal
visions of what ought to be。 Should we call the essence of what
ought to be; the abstract Good; the abstract Just would be part
of it。 Justice is a human virtue。 It has been called the virtue
of virtues。 It is the permanent habit of mankind to adapt its
actions to the ideas which we call the abstract Just。 The Just
per se; anything absolutely just; is found in reality as little
and as seldom as anything absolutely good。 The Just is always an
ideal conception; to which reality may approach; but which it
will never attain; the ethical judgment that an action or the
deeds of a man are just always affirms only that his deeds
correspond to an ideal conception; and one single action may
perhaps completely do this; but a man's whole life; society as a
whole and its actions can only approach it。 What kind of an
action do we call just? The word is used in different senses。 We
often use it merely to indicate that the individual is conforming
to the laws of the whole; that his actions are in accord with
positive law。 We use it also in the much broader sense to
describe his actions; not so much as corresponding to positive
law as to its ideals。 We oppose a right that ought to be … as the
just … to the positive law; judge the latter by the former; and
call actual law unjust in so far as it does not correspond to
this ideal。 The conceptions which guide us herein; and from which
we derive our idea of the just; are by no means simple; on the
one hand the peculiar nature of legal prescriptions; being
certain formal rules of social intercourse; and on the other the
ideal aims of social life which determine the material contents
of law; combine to create this ideal。 Conceptions of the perfect
commonwealth and of the perfect individual are associated in it。
When we speak of what is just in a narrower sense; when we use
the word not as it is used in schools; but in the daily usage of
common speech; we consider only one of these conceptions; or
better; only one of these co…operating spheres of conception。
When we speak of a just judge; a just punishment; or just
institutions; we usually conceive of a society; a number of
people; a comparison of them; and a fair distribution of good and
of bad; of that which causes pain and pleasure; measured by
uniform objective standards。 The specific conception of justice;
the one which principally interests us here; is that of justice
in distribution; it always presupposes the proportionality of two
opposite quantities; one of human beings and one of goods which
are to be distributed。 We necessarily classify in series;
according to objective characteristics; every multiplicity of
persons which appears to us in some respect as a unity; and the
ideal conception of what ought to be; demands the distribution of
goods and evils according to this classification。 By this
standard our ideal always measures reality。 Our moral judgment is
always active in estimating the actions of men; their vices as
well as their virtues and their achievements that is in comparing
and classifying them。 Our social instinct is ever active in
fixing the relation of the individual and his doings to the whole
of the community; of the State and 

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