In the wake of the ransomware attack on Chinese bank ICBC and its impact on US-Treasury trading, the Security and Exchange Commission says it “continues to monitor with a focus on maintaining fair and orderly markets” (“Wall Street and Bejing Fight Fallout of Ransomware Attack on China’s Biggest Bank,” Financial Times, November 13, 2023). Governments all over the world are in the game of substituting “fair” for “free” in their declarations and propaganda. Even free trade has lost its “free” to be called “fair”; in the same vein, “free trade” agreements often don’t include “trade” either. What looks free is out; what sounds fair is in.
Words are just labels, of course, and people can start calling dogs cats if they want to; it won’t change the nature of the animals or the way these things behave. But when people, and especially their rulers, change a label associated with a social, political, or economic concept, it is usually because they view and or want others to view the phenomenon differently. It is rarely innocent or without consequences.
Pretty much everybody knows, or used to know, what “free” means in the modern, liberal conception of liberty. It means exchange without violence or fraud by individuals each of whom may accept the exchange or, if the terms proposed by the other party don’t increase his own utility compared to his pre-exchange situation, decline the exchange. “Fair,” on the contrary, is fuzzy and conflictual, depends on who defines it, and generally requires some authority to impose it coercively on those who don’t agree with the definition. Although some may give it a moral meaning, a fair wage or a fair price, for example, means that the wage or price that the party who has the guns (or the backing of those who have the guns) can impose on others. Crucially, the latter may not decline.
It is unfortunate that John Rawls, whose theory (or some version of it) has been blessed by both Friedrich Hayek and James Buchanan (and Gordon Tullock), partly defined justice in terms of fairness, encouraging the drift of justice as liberty to justice as fairness. (On justice as liberty, Robert Nozick’s 1974 book Anarchy, State, and Utopia is a classic.) It is true that the label “fair” sometimes passes as innocuous, but it must be manipulated with utmost care.
On this issue as on so many others in political philosophy and political economy, Anthony de Jasay distills much wisdom. According to him, the word “fair” (and its derivatives) exists only in English “and has not even remote foreign equivalents.” (But isn’t the French “équitable” closer to “fair” than to “just”?) In de Jasay’s view, “fair” is an empty and chameleonic word that means “nice” and has served mainly to corrupt “justice” into “social justice.” In a classical liberal perspective and in de Jasay’s anarchism, justice lies in voluntary contracts and interactions. Justice is contractual while fairness is redistributive. What the state does is to replace contract and justice with command and fairness. (If you have some background in political economy and political philosophy, a challenging book that bears on this topic is his 1989 Social Contract, Free Ride: A Study of the Public Goods Problem. It is not the easiest reading I ever recommended to you! Don’t get bogged down in his mathematical proofs, which are not always obvious.)
READER COMMENTS
Richard Fulmer
Nov 18 2023 at 2:58pm
I think that the word “fair” definitely implies “moral,” and can be used to steal a base in a debate. Worse, it can be used to justify the use of force. People who are against fairness are bad, and can therefore be coerced for their own good and for the good of society.
Thomas L Hutcheson
Nov 19 2023 at 11:46am
There may be (many) instances where no decision by a third party about a transaction between two other parties (even where there are no externalities) is warranted. But when it is, wishing that it be a”fair” decision is quite appropriate.
Pierre Lemieux
Nov 19 2023 at 2:20pm
Thomas: So it would be “unfair and harmful to a significant degree” to prefer a girlfriend or wife because she is attractive, as William d’Alessandro argues? After all, as we might even say in Lockean terms, one who does this removes her (or him if you are on the other side) from the common stock of mankind. A real externality, and only one in an infinity. Let me bring to your attention a more general but relevant conclusion of Anthony de Jasay’s Social Contract, Free Ride (p. 242):
Craig
Nov 19 2023 at 3:16pm
The Sirens of Socialism might sing a song of Marxian exploitation. Notwithstanding the common law imposes common law covenants on all contracts including the implied covenant of good faith and fair dealing. That doesn’t mean all is fair in love and war.
Pierre Lemieux
Nov 19 2023 at 6:31pm
Craig: I am sure you know more than me about this, but it seems that “good faith” and “fair dealing” are, in law, close to what de Jasay called “nice” for the meaning of “fair.” In a 2015 article of the Minnesota Law Review, I read (footnotes ignored):
Craig
Nov 19 2023 at 8:51pm
“Good faith is “an intangible and abstract quality with no technical meaning”
That’s why we have judges and juries, right?
Pierre Lemieux
Nov 19 2023 at 9:52pm
Craig: I would answer “yes and no,” tending toward the latter. Otherwise, there would need to be only one six-word law: “Don’t use force or fraud,” or more perversely a three-word one, “Obey the regulators.” I suggest that to understand the place of the common law and the judge, and to avoid statist ruts, one has to read Hayek’s Law, Legislation, and Liberty (which I have reviewed on Econlib), perhaps especially volumes 1 and 2. Not easy reading, but I never promised you a rose garden. The Constitution of Liberty is a more readable but not as current alternative.
Monte
Nov 19 2023 at 10:37pm
Rawls placed important conditions on “justice in terms of fairness”, as expounded in his Difference Principle. Informally stated, this principle allows inequalities to persist so long as the benefits generated by those inequalities redound to the advantage of society in general, but to the greater material well-being of the less fortunate, in particular.
Cultural Marxism, or whatever terminology you prefer, is to blame for canonizing equality of outcome and distorting Rawl’s theory of “justice as liberty to justice as fairness.”
Ron Browning
Nov 20 2023 at 6:33am
Pierre:
Please direct me to Hayek’s blessing of Rawl’s Theory. I am only aware of one footnote in “Law, Legislation and Liberty” that I view as Rawl’s agreeing with views of Hayek’s, rather than the other way around.
Thanks
Pierre Lemieux
Nov 20 2023 at 11:29am
Ron: My references were also to Law, Legislation, and Liberty, where nine pages contain mentions of, or short blurbs on, Rawls (5 , 6, 102, 131, 201, 227, 259, 273, 301, in the Shearmur edition). In his introduction, Shearmur notes that Hayek may have expressed agreement with a Rawls article preceding A Theory of Justice, but was less enthusiastic (or knowledgeable) about the latter book (see pp. xliv-xlvi.
I also just rediscovered one critical passage of Rawls in The Fatal Conceit (p. 74 of the Bartley edition).
My “blessed” and “or some version of it” were meant to take into account what I just said as well as the clearer support of Buchanan (who replaced the “veil of ignorance” with a “veil of uncertainty” and claimed not to know which rules the participants in the social contract would choose, except for wanting to constrain state power).
Does that make sense to you?
Ron Browning
Nov 20 2023 at 3:07pm
I accept your homework assignment and will report back.
thanks