How does Justice enter the Economy?

How does Justice enter the Economy?

By Johannes Mosmann

What is “fair” in fair trade? There are a number of possible answers to this question. We can imagine the consumer in the West paying the producer in the third world more. We can think of a small community farm, a CSA, where the farmer is supported directly through member contributions. Or again, we can focus more on what happens in the value-creation chain before the product reaches the customer, that is, what happens between producer, processor and trader.

There are many models that bring more justice and fairness into economic life, models that have now passed the test of time. We don't have to deny the violence that our age still inflicts in order to proclaim that our age also brings a glimmer of hope for something that is not yet. This hope is something new. Obviously there have been many idealists with sublime ideas before. Comprehensive drafts of society were dreamed up and attempted by individual

minds. Individual heads believed they had the perfect idea for the social life of all, and tried to make this idea a reality. But an idea simply extrapolated from a head onto reality is a foreign body for this reality, something stiff, rigid, and inflexible that cannot be digested by the living process of social life. Thus an idea becomes a tyranny for life. For that reason the great social utopias, from socialism to neoliberalism, must become tyrannies for people.

Something else is involved with the movement for justice in the economy, in the movement for what can be called a “solidarity economy.” It's clear that people working in this movement have an inner life, an intellectual or spiritual life, and that this inner life is very different from the outer reality. The self with its ideals is on one side and the reality of today's social life is on the other. The two do not agree. Some people can't live with this tension and try to find some outer authority, a political body or world summit, that can impose some super-idea onto reality, some new law that will force people to become more like their ideal. But there are also farsighted people in the movement for solidarity economics, people who feel they're part of this outer life as well, and don't live only in the inner life. They experience this tension – they move in the outer world while always carrying the thought “I violate my ideals every time I buy something and pay a value-added tax and then those taxes are spent on the war in Afghanistan or for bailing out speculators...” but they also look to resolve this conflict in themselves. And so we must look more closely at the question of how we can do justice to the ideal in oneself…

Let's return first to the original question: what does justice in economic life mean? What is fair trade? There's something wrong about this question. A very funny feeling creeps over me… The fact that there is something like “Fair”Trade reveals the whole decadence of our way of life. Fair Trade casts a light on the state of this economic life by the absurdity that economic life has to be made fair… Even if Fair Trade is not the full picture, but only a step along the way, it makes clear what must change in the future.

Regarding fundamental principles of the economy, the economy is based on people exchanging services with one another. This service exchange is absolute in the modern division of labor economy since every person completely depends on every other person producing the things he needs, and can hardly survive from his or her own work. If the economy has its own principle, it is interdependence, it is altruism and not egoism. I turn the question upside down. I don’t ask first how justice comes into the economy. I ask: how does injustice come into the economy? How is egoism possible?

sphere. The hurdles we have to surmount in education are by no means less important than the hurdles in economic or legal realms.

Since schools are not independent, education is controlled by the same powers that carry out injustice. People cannot freely research, freely teach, or be freely educated because education is dependent on state and economic power. We cannot indulge in illusions about this any more: the educational system is largely in the hands of those who are hardly interested in justice and fairness.

The causes of injustice lie in the legal life and cultural life, not only in the economic life. How is it possible that the farmer in Ethiopia is given 1 euro as a daily salary for coffee while he must buy the kilo of millet seed to feed his family for 1.30 euro, and thus lives like an animal so we can sit around in our luxury furniture sipping coffee?

On a legal plane, an inequality arises. One has state authority on one’s side and the other is opposed by state authority. A hierarchy of power is involved. Inequality before the law is ensured through the ownership law imported from Roman patriarchy and transferred to Africa. Ethiopia needs aids supplies and knowledge technology from the West. Flowers, grains, coffee and so forth are now cultivated everywhere in Ethiopia for Germans, Saudis and Israelis. And so Ethiopians are held as slaves.

The economy cannot be seen unfiltered. Rather, we see through the lens of what we received in our education. We were instilled with a very specific picture of the economy. That is the picture of the “Homo Economicus,” the Economic Man who thinks only of himself and cannot even know anything of his fellow man since he is completely cut off from them. He only knows the price of the commodity he buys, but knows nothing about how this price came about or about the people who produced the good. That is the picture that informs our economic perception. For that reason our perceptions are deeply unscientific. It's interesting to note that the Homo Economicus has its origin in theology; it is connected with a certain simple piety, with the idea that a person cannot claim to know too much because life is ultimately guided by God’s invisible hand.

One can only answer the question about the cause of injustice when all 3 areas of human life are considered: the conditions for a fair trade have to be sought in the legal and cultural spheres, not only in the economic sphere.

As in the legal realm, fairness in the economy also depends on development in the cultural sphere. Fairness is ultimately based on people developing an interest in other people as well as our relation to nature. Thus, fair trade is dependent on the cultural sphere and on the whole question of education. People must be educated so they have an interest in each other. They must develop an understanding for the special needs, abilities, and inclinations of others, in order to make justice at all possible in the economic

The idea of the autistic person who only focuses on himself – gains as much as possible, gives as little as possible, and wants to know nothing of his fellow man – was made the cornerstone of our society. The founding fathers of the social market economy, Franz Bohm, Alexander Rustow, Walter Eucken and others, were also the founders of neoliberalism. The originators of the social market economy were identical with the founders of neoliberalism. Today neoliberalism is mostly confused with American imperialism or American neoconservatism, however, this is only an example of how neoliberals have completely succeeded in dominating human thinking.

I've grappled in detail with the writings of those neoliberal thinkers who established the theory of the social market economy, that theory that all the parties have had to accept if they don't want to be labeled enemies of the constitution. First of all, neoliberalism starts from the premise that it's impossible for participants in the economy to know anything about one another. Therefore it faces the question: how can order come into chaos when no one can know anything of the others? Earlier on, the father of the family could see who needed what, who had what abilities, and whether it was better for everyone’s well being whether the son chopped wood or grew wheat. The world economy still relies on such order: everyone depends on everyone else being in the right place and producing the right amount of goods. However, the economy has become a great network that no one can survey anymore. The neoliberal thesis is that an ordering system is needed to replace the conscious social judgment of the family father. Walter Eucken devised such a system – the social market economy – and neoliberal think tanks (from all over the world but starting in Germany) began drumming the idea into heads. Now it has become a chaos. In 2012 approximately 30 million had to die an excruciating death from starvation. Why? People did not want to know anything of one another.

What must be known to rightly judge the economic process today and know the right measures to take for our well-being tomorrow?

Every day what the needs of the farmer change. The price structure changes continuously because it depends in a dynamic way on genuine life - on both what the farmer needs today as well as tomorrow. It also depends on whether the soil quality will be better or worse. The price that the farmer must receive for his grain depends on many factors that only the farmer can know. How can I know this? I must try to stand in the farmer's shoes. And I must try to step into the role of merchant because only the merchant knows what he can sell at what price. Ultimately, I must also step into the role of consumer to know what the consumer wants, what he needs, and whether he can have it at that price.

To make a true statement about the economic process, I must leave my own skin. A total knowledge of the economic process necessitates leaving my own skin and putting myself inside of all the people involved in the value-creation chain.

Still, the economy is not a linear train but a living process. It moves and shifts as people, with their expert knowledge, interact. It changes when this expert knowledge meets the needs of people here and now, as well as when it interacts with nature, which is also living and changing. This is something fluctuating and dynamic. For an individual to guide this, one must feel what every individual feels, observe what everyone sees, and want what everyone wants.

Because this is impossible, I realized after long reflection that I cannot dream up the best economic system.

In reality, one can only create the possibility for this expert knowledge to be made fruitful, for the many limited judgments – of producer, distributor, and consumer – to combine and be made concrete. As a result, one stops being a Homo Economicus and begins to see the abilities and needs of others. That is the consequence: one abolishes the Homo Economicus and realizes the possibility of being interested in others and of developing a mutual perception.

What does the speculation grain prices matter? Who cares if they sink or hit the roof? For a sound economy the actual costs of agricultural production must be the starting point, and a middle way found between the interests of farmers and the interests of retailers, workers, and customers, so all concerned can live. They dialogue with one another and begin to be interested in each other. In this way we tackle reality and approach the ideal of justice or fairness.

As soon as the prejudice of Homo Economicus is abolished, all theories are also annulled since there will be nothing to theorize any more. Then the superstition of the invisible hand that guides our fate gradually loses its appeal and we work on making this

mutual perception ever more practical.

When Christmas comes we will run about with the idea of brotherliness in our heads. But left to our heads, brotherliness hardly becomes concrete or takes root. It cannot be present only as an idea. We have to create the circumstances where people who share in the value-creation of a good can see one another. If they cannot see, they have no other choice than to act selfishly.

In this way we create the possibility of moving beyond narrow self-interest. A reality simply opposes the ideology.

This article was originally an address given on 11/30/2010 at the GLS bank Christmas meeting of the “Fair and Regional Charter.� It was translated by Mark Batko and edited my Seth Jordan.

Johannes Mosmann works and writes at the Institute of Social Threefolding (www.threefolding.org).