The rule of primary distribution in social justice stipulates distribution according to contribution. It is an important part of the system of rules in social justice. This rule enables its “upstream” rule, the rule of equal opportunity, to be fulfilled. It also provides its “downstream” rule, the rule of social adjustment (social redistribution), with the basic foundation of material wealth. Clearly, the rule of primary distribution plays an indispensable role in supporting a just society, and in a certain sense, it also directly embodies social justice.

People tend to think that primary distribution focuses on efficiency and redistribution focuses on justice. In actuality, primary distribution also is involved with the issue of justice. Although primary distribution does attach importance to efficiency, it must also follow the principle of social justice; otherwise, it will not be able to achieve real and sustained efficiency, and only receive an abnormal efficiency.

1 The Basis of Primary Distribution Rules in Social Justice

Primary distribution refers to the direct “income” obtained by members of society through their own labor or the input of production factors that has not been deducted by items such as taxes.

In the process of the accumulation of social wealth and other resources, the quantity and quality of labor invested by each member of society is different, and similarly the factors of production they invest may also not be the same. Therefore, their specific contributions to society are different. Primary distribution rules aim at direct and differential distribution in accordance with the people’s different contributions. “With a sprinkling of appropriate assumptions, it can be demonstrated that a competitive market will pay workers and investors the value of their contributions to output” (Okun 1975). Of course, “contributions” here refer to not only material products in the economic field but also people’s contributions to society, politics, culture, and corresponding products. In a certain sense, these rules can most directly and intuitively reflect to what degree the principle of social justice has been fulfilled.

Broadly speaking, factors of production include labor, capital, land, raw materials, energy, technology, management, education, and other factors related to the production process. Among them, labor, capital, and management are the most important; others can be directly or indirectly subsumed into the three factors. “By Labor is meant the economic work of man, whether with the hand or the head. By Capital is meant all stored-up provision for the production of material goods, and for the attainment of those benefits which are commonly reckoned as part of income” (Marshall 2013). However, business management, “this purely coordinating work we shall call the entrepreneur’s function…it consists entirely in the establishing and maintaining of efficient relations between the agents of production” (Clark 1899).

Among the factors of production, labor plays the most important role, and its contribution even exceeds that of capital. Take American society as an example: “The United States is considered the country with the most abundant capital in the world, but 70% of its gross national product is still distributed on ‘the basis of labor.’ In the era of knowledge economy, the factor of technological innovation ability plays a greater role, so the proportion of income has increased; but in essence, this factor is still a kind of ‘labor’ rather than capital” (Expert Group 2002).

Labor is divided into simple labor and complex labor. Both require different costs and abilities, so the income they generate must also be different. What needs special mention here is that education plays an extremely important role in forming different levels of labor and, thus, income. With the advancement of modernization, the scale of production has expanded rapidly and labor has become more complex day by day. More and more workers are required to have specific professional knowledge and specialized skills. Education is no longer regarded as a consumption investment without economic benefits, but as a productive investment with positive significance. “Economic growth makes enormous demands for skills of many kinds. It is associated with a great increase in specialization, and therefore in the range of skills” (Lewis 2003). Generally speaking, different levels of education will lead to the difference in people’s incomes. On the one hand, people who receive different levels of education will obtain different abilities, which will lead to differences in their economic income. On the other hand, receiving different levels of professional education will enable people to acquire different levels of professional knowledge, so as to enter different professional fields and obtain different incomes. According to the 1991 World Development Report, every additional year of education can increase the wages of white men by 6% and white women by 7% in the United States. In Malaysia, it can increase the salary of a man by 16% and the salary of a woman by 18%. In South Korea it can increase someone’s wages by 6% (World Bank 1991).

Capital is a necessary condition and factor for the development of modern production. For the production process, all kinds of factors have certain functions and divisions of labor and are indispensable. Therefore, the owners of all factors involved in the production process should be qualified for and entitled to distribution. When analyzing the controversial issue of capital, we need to pay attention to the following two points: First, unlike the nature of capital in the “primitive accumulation” period, in a standardized and stable society with a market economy, capital is often accumulated by means of contribution rather than by deprivation, opportunism, or other abnormal means. Second, the influence of private capital on society is weakening. In developed countries, due to the separation of ownership from the management rights of means of production, the emergence of new economic forms such as shareholding system and cooperatives, and the high-intensity tax policy, the influence of private capital on the entirety of society has decreased. From the above, we can see that, in a modern and regulated market economy, the exploitation caused by capital may continue to decrease, while the positive effects it brings expand.

From the perspective of social justice, the rule of primary distribution according to contribution embodies the idea of equality (especially equal labor rights). Additionally, the rule embodies the idea of liberty, fully respecting and recognizing the individual’s different contributions to society.

First, the rule of primary distribution reflects the individual’s free choices. In traditional society, the strict hierarchy system meant that members of society could not have an independent personality. The majority of people could enjoy neither equality nor liberty, and they thereby had no independent choices. Most members of society had a strong personal attachment; their lives were decided by those with high status. In a modern society with a market economy, however, people have developed a sense of autonomy, and there is an equality between them. Members of society become “individuals” in the truest sense. Everyone is free, has an independent personality, and can be responsible for their own destiny without being controlled by others. “Freedom meant always the possibility of a person’s acting according to his own decisions and plans, in contrast to the position of one who was irrevocably subject to the will of another, who by arbitrary decision could coerce him to act or not to act in specific ways… Whether he is free or not does not depend on the range of choice but on whether he can expect to shape his course of action in accordance with his present intentions, or whether somebody else has power so to manipulate the conditions as to make him act according to that person’s will rather than his own” (Hayek 1987). The precondition of the primary distribution rules is that individuals can exist equally and make free choices. Otherwise, it is impossible for members of society to properly participate in the distribution of social resources according to their specific contributions to that society. Furthermore, the rule of primary distribution recognizes and guarantees the individual’s free choice in an institutionalized way.

Second, the rule reflects the differences among people. Unlike traditional society where all of its members were treated in a single and unified way, in modern society, people’s personalities are recognized and protected to the maximum extent. We should recognize that there are significant differences between individuals. It is in this sense that everyone is not only born equal, but also born different. “However important the environment may be, we must not overlook the fact that individuals are very different from the outset. As a statement of fact, it just is not true that ‘all men are born equal’” (Hayek 1987). These differences are manifested in many aspects. “These differences consist not only in the variation of talents of the same kind (variation in strength and imagination, and so on) but in the variety of talents of different kinds” (Rawls 2001). Different people have different abilities, endowments, ideas, interests, behaviors, goals, choices, etc. Ability, choice, behavior, and other factors are closely related to income status. Therefore, these differences among individuals will further cause differences in their income. “Not everyone can be a concert pianist or a center for the Lakers, nor do they have, as Madison noted, equal facilities for acquiring property” (Fukuyama 1992). The rule of primary distribution recognizes the people’s differential contributions, which means that it also respects and protects individual differences.

Third, the rule recognizes and guarantees personal development. It has been widely recognized by members of society that development should be people-oriented. The people-oriented concept implies that the potential of countless individuals will be fully developed. As stated in the Communist Manifesto, in an ideal society, “we shall have an association in which the free development of each is the condition for the free development of all” (Marx and Engels 1995a). Without the free development of each individual, the people-oriented concept will not be realized in social development. This can be understood as follows: freedom not only allows one to avoid inappropriate and excessive intervention by others, but also promotes active participation and positive creativity. Berlin divided liberty into two types: positive liberty and negative liberty. “For if to be free – negatively – is simply not to be prevented by other persons from doing whatever one wishes, then one of the ways of attaining such freedom is by extinguishing one’s wishes.” As for the latter, “the sense of freedom entails the absence of obstacles to possible choices and activities – absence of obstructions on roads along which a man can decide to walk” (Berlin 2002). Undoubtedly, both are necessary conditions for individuals to develop and improve. More specifically, the primary distribution rule of social justice guarantees the liberty condition necessary for individual development, and it recognizes and protects their full development. At the same time, this rule also provides a necessary standard for measuring each individual’s specific development, which, to a large extent, is the status of their specific contributions.

Fourth, the rule of primary distribution recognizes equal competition results and self-motivated efforts. In contrast to the distribution rule of traditional society, the primary distribution rule of modern society excludes the interference of pre-endowed factors such as origin, privilege, race, and gender in the field of distribution. It emphasizes that members of society should make different contributions to the social economy through self-motivated efforts and equal competition and take this contribution as the basis for participating in the primary distribution. Only in this way can it conform to the principles of equality and liberty and the basic spirit and rules of a market economy. “Let us consider why we all agree in rejecting the view that differences in race, sex, IQ, or social ‘rank’ are the grounds of just differences in wealth or income. Part of the answer seems obvious. People cannot by their own voluntary choices determine what skin color, sex, or IQ they shall have, or which hereditary caste they shall enter. To make such properties the basis of discrimination between individuals in the distribution of social benefits would be ‘to treat people differently in ways that profoundly affect their lives because of differences for which they have no responsibility’” (Feinberg 1973).

The rule of primary distribution in social justice is of vital importance to the normal operations and development of society. In a market economy, based on the idea of liberty and equality, the rule of primary distribution can greatly activate social potential, develop human resources to the maximum extent, and improve social and economic efficiency and sustainable development. This rule also has guiding significance for every member of society. It reminds many individuals that specific contributions to society should be taken as an important goal when determining their development path. The rule of primary distribution is a crucial part of the just system of rules, directly affecting all aspects of social justice. It has not only fulfilled people’s efforts based on the equal opportunity rule by solidifying equality of opportunity in modern society but also provided the material accumulation needed for the implementation of the rule of social adjustment (social redistribution).

2 The Characteristics of Primary Distribution Rules in Social Justice

The rule of primary distribution has the following fundamental characteristics:

2.1 Emphasizing the Symmetry Between “giving” and “receiving”

The rule of primary distribution is just because it emphasizes the symmetry between the quantity and quality of the production factors invested by individuals (members of society) and their gains (benefits). That is, there is an appropriate correspondence between “giving” and “receiving.” When talking about the principle of distribution according to work, Marx stated that “the individual producer receives back from society – after the deductions have been made – exactly what he gives to it. What he has given to it is his individual quantum of labor” (Marx and Engels 1995b). This not only determines whether the primary distribution rule of social justice can be established, but it also determines whether the corresponding social system is “legitimate.” “To each agent a distinguishable share in production, and to each a corresponding reward – such is the natural law of distribution… The right of society to exist in its present form, and the probability that it will contribute so to exit, are at stake. These facts lead to this problem of distribution its measureless importance…Having first tested the honesty of the social state, by determining whether it gives to every man his own… The right of the present social system to exist at all depends on its honesty” (Clark 1899).

If there is asymmetry between the contributions and benefits of members of society, and this asymmetry is sustained and stable, it means that there are some flaws in the distribution system of that society or even in that society itself. If some people give less and receive more but most people give more but receive less, there must be different degrees of “exploitation” in the society. If people receive the same no matter how much they give, there must be egalitarianism in different degrees in the society. This phenomenon is also a kind of “exploitation”; people with weak abilities and who make small contributions exploit those with strong abilities and who make great contributions. Therefore, the entire society should be on high alert to any sustainable and stable asymmetry.

2.2 Highlighting the Rewards That Individuals Receive Through Their Own Achievements

The reason why members of society can make different contributions to the social economy is due to both personal efforts and social cooperation. However, the primary distribution rule emphasizes that the rewards people obtain are based on contributions through their own efforts. It recognizes the existing abilities and contributions of individuals and respects their differences. Obviously, the rule of primary distribution is indispensable to the complete justice system. It does not deny the vital importance of social cooperation; instead, the significance of social cooperation is manifested in the other two rules in the system of justice, namely, the guarantee rule of basic rights and the dignity of human beings and the social adjustment rule.

2.3 There Is a Relatively Large Gap Among Members of Society in the Distribution of Social Resources Such as Income

The primary distribution rule is actually a logical extension of its upstream rule—the equal opportunity rule. As mentioned earlier, the differences in people’s personality such as natural endowments and the differences in factors of production owned by different people are relatively large. Under the condition of equal competition in a market economy, without any tax deduction, the differences between individuals will be directly transformed into a large gap in the distribution of social resources such as income. American society in 1970 illustrates this case. “Transfers are the big equalizer, flowing principally to families whose earned incomes are low. By one statistical measure of income inequality, the degree of inequality of family incomes in 1970 would have been more than double its actual size in the absence of any government transfers” (Okun 1975).

The obvious gap in income or other social resources formed in primary distribution does not violate the spirit of social justice. On the contrary, if we consider how to narrow the gap here, there will be more advantages than disadvantages, which will cause many negative effects. It will directly lead to the egalitarian distribution, damage the equal competition and free development that is compatible with the market economy, and then seriously inhibit the vitality of social development. It will not only make the downstream rules of primary distribution unable to be implemented due to the lack of necessary material accumulation, but also produce a harmful “echo effect” to its upstream rules—equal opportunities rules. It must be noted that egalitarianism is most likely to appear at this time. The historical lessons of 30 years before China’s reform and opening up have repeatedly confirmed this point.

It should also be noted that if the obvious disparity in income or other social resources caused by the distribution is not adjusted or alleviated, it will have many adverse effects on the normal operations and development of society. An excessive gap between the rich and the poor will definitely weaken the people’s awareness of social cooperation, aggravate the estrangement and conflict between social groups, and even endanger the safe operations of society. The serious rich–poor divide will also damage the basic purpose of social development, which everyone shares and benefits universally, thus leading to the situation of growth-without-development. “Excessive inequality must diminish the sum total of human enjoyment, by subtracting from the masses of happiness of the greater number” (Thompson 1850).

Clearly, the primary distribution rule does not represent the complete system of rules of justice, and it is impossible to solve all social justice problems. Social justice is a system of rules (an organic whole), which includes guaranteeing people’s dignity and basic rights, equal opportunities, distribution according to contribution (primary distribution), and social adjustment. Each has its own functions. The main function of primary distribution is recognizing and guaranteeing individual differences of members of society and different contributions they make. We should also note that whether every rule of social justice can function normally depends on the complementarity of other rules, so social justice cannot just stay in the stage of primary distribution. This rule must be combined with its upstream rule (equal opportunities) and its downstream rule (social adjustment), so that it can play a comprehensive and positive role in society; otherwise, the justice of the society as a whole cannot be established. It is in this sense that the primary distribution rule reflects both the vitality of the market economy and its defects. As for the income gap caused by the primary distribution rule, that should be left to its downstream rule (social adjustment) to solve.

2.4 The Rule Becomes Less Important with the Improvement of Modernization

The development history of developed countries reveals that, with the advancement of modernization, the role that social adjustment plays in a society becomes larger, as does social redistribution. Under such conditions, the importance of the primary distribution rule is decreased relatively. Of course, the “relative decrease” mentioned here will not be an endless decrease. When its “decreasing” trend approaches a certain critical point—that is, the equilibrium point between the primary distribution rule and the social adjustment rule can effectively function—it will stop.

The material (social wealth) foundation directly determines the distribution mode. In the era of material scarcity, primary distribution and redistribution were almost integrated. If there existed any redistribution, it was only used to maintain the simple functioning of society. At this point, the status of primary distribution is naturally crucial. Because of this, the problem of primary distribution has become the focus of people’s attention, as well as the venting of their dissatisfaction. Because we only rely on the primary distribution mode, we can only solve a series of drawbacks caused by the unreasonable distribution mode in a more drastic way. In the agricultural society, when the resulting contradictions intensified, people tended to destroy the existing social structure and then copy the original distribution model, but this would cause the original contradictions. People also made new attempts with egalitarian schemes in order to build a just society that was acceptable to all members of society. However, at that time, the material standard was very low, and this practice only replaced the old injustice with new injustice, which was not in line with human nature. Moreover, egalitarianism seriously inhibits the progress of productivity, so it will eventually be abandoned by the people. Even in the early stage of large-scale industry, there was still no possibility for social redistribution. Therefore, people pay no less attention to the problem of primary distribution. At the same time, some thinkers with a great sense of justice proposed utopian schemes of utopian socialism, but their schemes could not be realized as egalitarianism was in agricultural society. In the 30 years before China’s reform and opening up, due to the extreme backwardness of productive forces and the extreme scarcity of material wealth, in order to quickly change the previous distribution mode, the alternatives adopted by Chinese society were still the familiar egalitarianism and asceticism. Clearly, it is only with the development of productive forces and the continuous improvement of modernization that social wealth can accumulate in large quantities and the scarcity of social goods and services can be relatively reduced. Only under such conditions can society have goods and services for redistribution and adjustment, and social redistribution can become another important area of attention. Correspondingly, the importance of primary distribution may be relatively reduced.

In modern society, social adjustment—that is, social redistribution—not only becomes possible, but it also becomes a reality, thus making the primary distribution rule less important in society. If the society is designed and operated completely according to the rules of market economy, then the inherent defects of the market economy will have many negative effects on social life, which then leads to many unavoidable major defects in society. “We have no reason to think that incomes will be fairly distributed under laissez-faire capitalism. Market incomes might produce acceptable differences or enormous disparities in income and wealth that persist for generations” (Samuelson and Nordhaus 2010). This has gradually become the consensus of society. With the progress of social civilization, safeguarding the people’s basic dignity and rights, improving the quality of the entire society, ensuring social unity, sharing the fruits of social development, and realizing the healthy development of society have become the concepts that are generally accepted by all groups in modern society. Under this background, social redistribution and social adjustment have become comparable to the primary distribution rules of social justice. Therefore, solid tax policies, effective transfer payment policies, and a systematic social security system have become the integral components of modern society. In this regard, Japan has been successful; the gap between the rich and the poor in Japanese society has been controlled to a reasonable range (See Table 5.1). Britain, France, Germany, and the Nordic countries have also been successful in this respect. The rising status of the redistribution issue in society will inevitably lower the status of the primary distribution rules.

Table 5.1 A Comparison of the primary distribution and redistribution of income in Japanese society
Full size table

3 Several Related Issues

Whether the primary distribution rules of social justice can be effectively implemented and play its due role largely depends on how the following problems are solved.

First, whether the design and implementation of the corresponding institution is fair and whether it is manipulated by a certain interest group.

The problem of distribution, including the primary distribution, concerns the vital interests of every group and every member of society, and its importance can never be overstated. If this problem is not handled properly, it will lead to a variety of social contradictions and even social conflicts. “Distribution is what social conflict is all about … the struggle for control of the means of production is a distributive struggle” (Walzer 1984). Since the problem is so important, it must be steered onto the track of institutionalization. “In order to reduce the conflict of behavior and the uncertainty of the distribution subjects in the process of income distribution, we should maintain and form the distribution order of ‘cooperation and competition,’ regulate income distribution transactions with institutions, and protect the legitimate rights and interests of all parties in income distribution, which is an inevitable choice” (Han 1998). Clearly, only institutions can guarantee the fairness, effectiveness, and stability of distribution. As North states: “Institutions are a set of rules, compliance procedures, and moral and ethical behavioral norms designed to constrain the behavior of individuals in the interest of maximizing the wealth or utility of principals” (North 1981).

The primary distribution system itself must be fair, and it must reflect the will and requirements of all members of society, including vulnerable groups. The most basic requirement is that the designers and executors of the system, such as the government and the legislature, must be representatives of the public interest and be entrusted by various social groups to perform their own functions. The relationship between the government and the public is actually a relationship between the agent and the principal. Based on the needs of the professional division of labor, the public, as the principal, entrusts the government to handle matters closely related to public interests, and “engage the agent to perform some service on their behalf which involves delegating some decision-making authority to the agent.” However, “there is some latitude in the decision-making power by the agent as a result of the inability of the principal to perfectly constrain the agent’s behavior. Most individuals are agents in one role as employees, and principals in another role as consumers” (North 1981). This situation can easily lead to the agent’s abuse of their power for personal gains. In particular, once a monopoly group of an important resource or a representative of an interest group becomes an agent of the public, it is inevitable that the designers and executors of the primary distribution system will make the system beneficial to their own interests or some certain interest groups. In this case, the primary distribution system will be unfair and harmful to public interests. Therefore, how to ensure that the system is not manipulated and controlled by interest groups becomes the primary issue in maintaining the fairness of this system.

The threat of the primary distribution system sometimes comes from the joint erosion of internal and external forces, resulting in a deformed system. This is prominently manifested as rent-seeking. Members of public institutions often take advantage of their public power to gain personal interests through inappropriate trading between “insiders” and “outsiders.” They “use administrative law to safeguard or redistribute vested economic interests. This kind of rent-seeking behavior often involves maintaining or grabbing vested interests by means of hindering the free flow and free competition of production factors among different industries.” Rent-seeking behavior will not only distort the allocation of economic resources, but “these activities will also lead to other rent-seeking or ‘rent-avoiding’ activities. If government officials enjoy special interests in these activities, their behavior will be distorted, because these special interests will trigger a round of wasteful rent-seeking competition in pursuit of administrative power. At the same time, enterprises whose interests are threatened will also engage in ‘rent-avoiding’ in order to compete with the officials, thus consuming more social and economic resources” (Tang and Mao 1993). What is worse is that this “money politics” will seriously damage the fairness and credibility of the primary distribution system as well as the vital interests of the general public, resulting in an excessive gap between the rich and the poor. During the period of the Chinese social transition, due to various reasons such as the imperfect system of rules, some scholars estimated that, in the first few years of the 1990s, Chinese financial institutions lost about 300 billion yuan in interest margins. In the real estate industry, the state lost 400 billion yuan in profit margins, mainly due to land leases. Bribery in infrastructure projects, project approval, reselling of import and export approvals, and procurement has caused losses or asset losses to countries, institutions, and legal entities of about 500 billion yuan (Zhang 1999).

As a system, and an extremely important system, primary distribution should be a system of rules that all groups and members of society abide by, and it should have sufficient authority and an unquestionable universality of its implementation. In other words, no group can do anything else outside the system. However, this is sometimes challenged. Some social groups often go their own way based on their own interests, ignoring the system and thus damaging the fairness of the primary distribution field and causing serious negative effects. At present in Chinese society, there are prominent problems in this respect. When it comes to the income distribution mechanism, each department would act only in its own interest without any coordination. “They use their own economic or administrative means to intervene in distribution. If it is an enterprise or institution that is in a monopoly industry, it will try its best to maintain its monopoly position and distribute part of its monopoly rent to its employees. Those who are not in a monopoly position will grab as much income as possible and distribute part of their income to their employees through various legal and illegal or even ’sidestepping’ ways … Then, with the competition among various units (departments) to seize the commanding heights of the income distribution, the income distribution gap between employees in different units (departments) has been formed and widened.” In addition, this phenomenon has also evolved into local protectionism, artificially widening the income gap between regions (Gao 2002). Obviously, these have seriously disturbed the primary distribution system of Chinese society.

Second, whether members of society have equal basic rights.

Whether the primary distribution system of a society is just can mainly be interpreted in this way: whether the people’s basic rights have been universally established in that society. In this sense, if their basic rights are not guaranteed, then primary distribution in that society cannot be just.

The concept of equality and freedom determines the supremacy of people’s basic rights. “Every human being has, or is entitled to have, ‘rights’ – legitimate, valid, justified claims -upon his or her society…Implied in one’s humanity, human rights are inalienable and imprescriptible: they cannot be transferred, forfeited, or waived; they cannot be lost by having been usurped, or by one’s failure to exercise or assert them” (Henkin 1990). In modern society or a society with modernization as its basic orientation, the basic rights of members of that society must be unconditionally guaranteed. “They (human rights) need not be earned or deserved… When a society recognizes that a person has a right, it affirms, legitimates, and justifies that entitlement, and incorporates and establishes it in the society’s system of values, giving it important weight in competition with other social values… Human rights imply the obligation of society to satisfy those claims. The state must develop institutions and procedures, must plan, must mobilize resources as necessary to meet those claims” (Henkin 1990).

In the field of primary distribution, the people’s basic rights include equal labor rights, employment rights, reasonable remuneration, and other rights. The right to work and the right to employment are necessary conditions for their survival and development. It is also a precondition for them to fit into that society. If there is no right to work and employment, primary distribution will be impossible. Accordingly, in the primary distribution process, we must also ensure the fairness of the people’s labor remuneration. In the transaction process of income distribution, “‘transaction’ should be based on the premise that both parties of the transaction mutually recognize each other’s independent personality and rights. Transaction is a process of power conversion … If the distribution subject’s power is equal to his income share, it reflects the equality of rights between distribution subjects, and the transactions between distribution subjects are equal transactions. On the contrary, if the distribution subjects’ rights are not equal to the income share, it reflects the unequal rights between distribution subjects, and the transactions between distribution subjects are unfair transactions” (Han 1998). In addition, a minimum wage limit should be established for workers to prevent excessive irrationality in the field of primary distribution. As John Stuart Mill says, “The purpose is to provide that the workmen shall have reasonable wages, and the capitalists reasonable profits” (Mill 2006).

In real social life, the people’s basic rights will be somewhat infringed, resulting in many negative impacts on the field of primary distribution. This is mainly because of the following reasons. (1) The influence of hierarchy in traditional society, where members belong to different levels, and those in the low level have a personal attachment to those in the high level. According to different ranks and identities, members of society further show a distinct difference in aspects such as income distribution and other social resources. The factors and concepts of traditional hierarchy still exist in different degrees in today’s real society, especially in some societies with a low degree of modernization. This has led to situations such as labor market segmentation. For example, at the present stage of Chinese society, there is a great difference in income between rural residents and urban workers, so the primary distribution process is obviously unfair. (2) The infringement of rights by money. In the market economy society, the role of money is beyond measure; therefore, if there is no necessary constraint, money will inevitably have some negative effects on the basic rights of its members. “Money can buy a great many things that are not supposed to be for sale in our democracy … better education and information help affluent people to take full advantage of the legal system as a means of realizing their goals and ambitions” (Okun 1975). Under such circumstances, the formulation of some specific rules and the judgment of some specific disputes in the field of primary distribution will inevitably present a situation that is beneficial to the affluent people. (3) The infringement of state power. If the power of the state is too small, it will be difficult to effectively curb the market economy failure and ensure the justice of the whole society. However, when the power of the state loses any restriction, is elevated to a supreme position, and can intervene in all fields of social economy at will, the state institutions may be alienated. Once this happens, the state power will violate the basic rights of members of society, and it will harm the fairness in the field of primary distribution. For example, the income of Chinese farmers is far lower than that of urban residents. It is in such a situation that farmers have to pay too many taxes and fees to the state and government. In 1995, “the per capita income of rural residents was equivalent to 40% of that of urban residents, while the per capita income of rural residents was nine times that of urban residents only in terms of taxes. If all kinds of miscellaneous fees are paid, it is equivalent to nearly 30 times that of urban residents.” Actually, “the rural taxation system has been regressive” (Zhao 1999). This practice has unreasonably increased income inequality in the primary distribution of Chinese society and has artificially damaged the fairness in the field of primary distribution.

Third, whether there is an effective and fair negotiation and consultation mechanism between the parties.

Whether the primary distribution rules of social justice can be fulfilled depends on whether there is a consultation and negotiation mechanism between the parties (groups) to a certain extent. “The rights and responsibilities allocation clauses stipulated in the contract are reached through bilateral or multilateral negotiations and bargaining between the parties before signing the contract. Therefore, the size of the ‘bargaining power’ (advantages and disadvantages) plays a decisive role in the distribution of rights and responsibilities in the contract and the definition of each party’s status” (Liu 2002). This mechanism must be fair and effective in order to avoid situations that are unilaterally beneficial to groups in a relatively strong state, which will eventually lead to unfairness in the primary distribution results.

When it comes to the coordination between employers and employees in the field of primary distribution, it is necessary to give full play to labor unions. In this respect, labor unions play an irreplaceable role. “The source of union power is collective action. When workers join together in a union, they no longer negotiate as isolated individuals. The threat of a strike (or a work slowdown) poses many more difficulties for an employer than does the threat of any single employee quitting” (Stiglitz and Walsh 2011). Through labor unions, workers can negotiate with business owners to solve important issues in the field of primary distribution. “The wages and fringe benefits of unionized workers are determined by collective bargaining. This is the process of negotiation between representatives of firms and of workers for the purpose of establishing mutually agreeable conditions of employment” (Samuelson and Nordhaus 2010). This practice of labor unions in negotiation can be used for reference by farmers and other groups when dealing with problems in the field of primary distribution.

It should be noted that, sometimes, one of the parties is obviously in a weak position, thus lacking the necessary negotiating power. The result of consultation and negotiation formed under such circumstances is likely to directly damage the fairness of the primary distribution result. In this regard, it is necessary for government institutions, as representatives of public interests, to intervene. For example, the state can make clear provisions on related matters in the form of laws and regulations such as the Trade Union Law and the Labor-Management Relations Act, and they can set up labor management departments to effectively supervise and coordinate them.