In this post, Stone Center Senior Scholar Miles Corak discusses economic justice. The text below is adapted from Corak’s response to a question during a panel discussion on inequality and social mobility at the Pearson Institute’s 2023 Global Forum, held at the University of Chicago.
By Miles Corak
For me, justice is based on three principles, and the first very simply is that all humans are created equally and have the right to be treated with dignity. This sets off a whole chain of policy discussions, discussions that should be reframed from what has become the default in the era of high inequality that we have lived through. Certainly, we should be valuing people regardless of the work they do or where they fit in the income distribution. This implies that we should give less emphasis to distinguishing our station in life as deserving versus undeserving; to meritocracy and the entitlement it leads to among the rich and the shame it engenders among the less rich. Making it to the top requires a certain amount of just dumb luck. After all, many top-end markets are winner-take-all markets. Robert Frank has written a nice book called Success and Luck, stressing that in some significant measure you need to be lucky to succeed in markets of this sort. We could tell a similar story for those at the bottom, a position that reflects a series of unlucky outcomes through a host of life transitions. I believe that if we reframe public policy discourse away from meritocracy, and toward luck, we can open a constructive conversation about dignity.
The second tenet of justice is that labor has preference over capital. We expect state parties to recognize our human rights. And we expect justice, not charity. This leads to a number of questions, the most obvious of which is: Why do we have preferential treatment in the tax system for capital? Also, what can be done to give labor market workers more bargaining power? In some measure, large parts of what the Biden administration is doing speak to the latter question, but we certainly have a long way to go in addressing the former.
Finally, the third principle of justice is that wealth is created to be shared. This principle opens a door to a public policy agenda around inclusive growth. We should build an economy in which the relatively disadvantaged benefit relatively more from economic growth: raising wages at the bottom, not letting inequality in the bottom half of the income distribution get out of hand, and curtailing inequalities at the top. This would offer the majority of citizens a vision, a hope, an expectation of a prosperous future. With inclusive growth, with limits to inequality, with a strong set of public policy protections in place to provide insurance and limit the depths of poverty, there would be an awareness that whatever ups and downs the future may hold, these challenges can be weathered with hard work, savings, and perseverance.
So what is justice? It’s moving, always moving one step at a time, from entitlement, division, and insecurity toward dignity, community, and resilience.
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