Economic Analysis, Moral Philosophy, and Public Policy

Among the questions of justice that are important to economists are those that concern the distribution of benefits and burdens among members of a society. What claims can persons legitimately make upon one another or upon the state? What burdens can the state place on its citizens, or individuals on one another? Because justice is concerned with the distribution of scarce resources in society, its subject matter overlaps with economics.

Economists, like philosophers, cannot decide what principles of justice to rely on by consulting public opinion, because people are committed to different principles, and even when there is a social consensus, it may not be well considered, or it may be so abstract as to offer little practical guidance. As an example of poorly considered agreement, consider that for centuries people believed that women were the natural inferiors of men. Consider as an example of ambiguity and overabstractness, equality of opportunity: almost everybody accepts this value, but there is little agreement about what it entails. Economic evaluation presupposes at the very least well-defined principles of justice. The principles of justice that guide policy should also be well considered.

Many issues of justice are controversial, and economists would like to avoid them. But controversial questions are often unavoidable. Suppose, for example, economists are called upon to describe the economic consequences of alternative policies affecting families. Should they evaluate these policies by looking at their effects on the household or on each individual member? Should economists include the unpaid contributions women make to the household in GNP? Do changes in family law such as no-fault divorce that harm women and children in terms of standard of living, while also allowing women and men to leave unhappy marriages more easily, increase or decrease social welfare? All these questions involve matters of justice, and one cannot choose among policies without answering them.

Libertarian and utilitarian moral theories, the subjects of Chapters 7 and 10, imply theories of justice. For most libertarians, justice primarily involves respecting property rights and negative freedom. For most utilitarians, principles of justice are utility-maximizing general rules that facilitate cooperation and regulate conflicts of interest. But there is a different idea of justice than the libertarian or the utilitarian that appeals to the idea of agreement.