Principles of economic justice: Marketplace and workplace applications

Mainstream economics argues that ethical standards are essentially relative, that they differ from one person to the next, and are entirely outside the limits of legitimate inquiry for economic science. Our view is that there are certain objective ethical standards to be applied that parallel the three modes of human interaction in economic affairs: person to person, superior to subordinate, and member to group. Those standards are given by the principle of equivalence, principle of distributive justice, and principle of contributive justice. The key to integrating those standards into mainstream economic thinking is to begin with what happens in every exchange involving economic agents who are well-informed and free to act. What is gotten in the exchange is more highly valued than what is given up. However, there must be limits to that gain—identified in mainstream economics as profits, consumer surplus, and economic rent—in order to prevent one party from taking advantage of another and to assure that market exchange serves all economic agents fairly and effectively and not just those with the power and will to turn gain into excess. Mainstream economists argue that sufficient limits are imposed by the “invisible hand.” We argue instead that limits must be imposed more deliberately and directly by human economic agents and that those limits are supplied by the three principles of justice.