Abstract
The paper highlights the question: how does a cultural theory of economics contribute to a better understanding in respect to the conflict between the prevailing notions of justice and the principles of a modern market economy? For this purpose, the relationship between justice and efficiency is first analyzed from the perspective of modern constitutional economics. On the basis of the criticism of the concept of social justice, presented by Friedrich August von Hayek, we then demonstrate that the fundamental tension between justice and economic efficiency stems from cultural conditions. A cultural perspective helps broaden the reflections on that issue and thus solve the conflict between justice and efficiency. Thus, it will be demonstrated that, transcending Hayek, it is necessary to expand the concept of a more complex homo culturalis in order to deal with the “spheres” of justice and efficiency in a comprehensive way.
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Notes
- 1.
Constitutional economics focuses on the development of desirable rules for human coexistence and cooperation. In analogy to the gains from trade-paradigm of classical economics constitutional economics searches for gains from mutual and voluntary commitment on a constitutional level (see below). The ideas of this approach were developed especially by James Buchanan and Viktor Vanberg.
- 2.
Thus Hayek assumes that in the long term all participants to the market will, in the majority of cases, be positively affected by economic innovation processes. In this context he notes: “There is no need to morally justify specific distributions (of income or wealth) which have not been brought about deliberately but are the outcomes of a game that is played because it improves the chances of all”; Hayek (1976), p. 116, our emphasis.
- 3.
For an introduction to the research on social justice see for example the contributions by Jasso and Wegener (1997), Jasso (1999), Miller (1999), Liebig (2001), Montada (2001), and Ross and Miller (2002). Substantial findings are derived from the research groups of responsibility, justice, morals (www.gerechtigkeitsforschung.de/publikationen), the interdisciplinary social research project (http://www2.hu-berlin.de/isgf), and the Journal Social Justice Research (http://www.isjr.org/Journal.html). An overall view of the international research into justice is to be found in Kluegel et al. (1995a, 1995b).
- 4.
In this context, two works of experimental economics, verifying that both rules and results are viewed to be justice criteria, seem relevant: If individuals consider the rules or results as being unfair, they have strong motives to alter those structures; cf. Frey, Benz, & Stutzer (2004). Furthermore, it was possible to demonstrate that, if the ensuing outcomes were perceived as being unfair or inappropriate by the persons affected, some individuals would readily act as homo reciprocans, i.e. they would alter their strategies in favor of the losers even though they would have derived greater material profit from the previous situation; cf. Fehr and Gächter (2000).
- 5.
The fact that the ensuing outcomes have to be taken into consideration with regard to the establishment of constitutional rules is also emphasized by Buchanan and Bush (1974), page 156f: “In any real-world setting, of course, the discussion of institutional rules affecting income-wealth distribution must take place in recognition of existing legal definitions of property rights, of existing political decision-making mechanisms, and of predicted patterns of income distribution as well as predicted positions of persons within these predicted distributions.”
- 6.
Thus from the perspective of a cultural theory of economics, one of the crucial problems of transformation in Eastern Europe is due to culturally practiced patterns underlying the thinking and acting of economic actors that have to be adapted to a rapidly altered formal framework cf. Zweynert and Goldschmidt (2006).
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Goldschmidt, N., Lenger, A. (2011). Justice by Agreement: Constitutional Economics and its Cultural Challenge. In: Kals, E., Maes, J. (eds) Justice and Conflicts. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-19035-3_18
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