How Does Justice Come to the Economy?

[This (republished) address from 11/30/2010 at the GLS bank Christmas meeting of the “Fair and Regional Charter” is translated abridged from the German on the Internet, www.fair-regional.de,]

By Johannes Mosmann:

“I was invited to speak about the question what justice in economic life can mean, what the word “fair” implies when we speak of “fair trade” or the “Fair and Regional” initiative. This is obviously a vast theme that I can only outline in the half hour allotted. What is fair in fair trade? Different answers are possible here. The end-consumer in the West must pay the producer in the third world more, One could think of the little community where agriculture is carried out through contributions of coop members. One could 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.

Many ways are now tested to bring more justice and fairness into our cooperative life. Everything bad and cruel that our age inflicts doesn’t need to be denied to proclaim on the other side that our age also brings a hope that is not yet. This hope is something new. Obviously there have been many idealists with sublime ideas before us. Comprehensive drafts of society were dreamt up by individual minds and then introduced somehow. Individual heads believed they had the perfect idea for the life together of all people and tried to promote this idea in reality. An idea simply extrapolated from a head into 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 solidarity economics. There people are clear that they have an inner life, an intellectual or spiritual life and that this intellectual or spiritual life is very different from the outward reality of the present social process. The self with its ideals is on one side and the social life in its present form is on the other side. The two do not agree. In this movement for solidarity economics, people become active who do not react to the contradiction between their ideals and outward conditions in urging a super-idea as a law from some world summit forcing all persons to become ideal persons. Far-sighted persons set out in the movement for solidarity economics. These people feel they are part of this outward life and do not only live in their inner life. I have to move in this outer world. Moreover I violate my ideals… When I buy something, I pay a value-added tax and the taxes are then spend for the war in Afghanistan or for bailing out speculators. Since one cannot be other than in this world and moving in it, one must answer the question very differently about doing justice to the ideal in oneself…

With every social initiative, with every social organization and every institution of social life, one must work against the force of gravity of one’s institution and endure this tension.

Therefore returning again and again, going inward again and again and visualizing the ideal from which one starts is essential for a social project. One has to go beyond and submerge. One must return to oneself and make clear one’s goal. So I understand my task, to give a little impulse so you can desist in the next hour from concrete everyday work and envision the ideal of justice. What does justice in economic life mean? What is fair trade? I must admit something is wrong about the 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 should be made fair… Even if Fair Trade may not be a future-friendly model for the economy, 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 other persons producing completely depends on other persons producing vital things and can hardly survive from his or her own work. If the economy has its own principle, it is altruism 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? I have pursued this question in the last years.

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 live like an animal so we can sit around in our luxury furniture and sip coffee. On a legal plane, an inequality arises that one has state authority on one’s die and the other is opposed by state authority. The hierarchy oi 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. Ethiopians are held as slaves.

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 areas, not only in the economic sphere. For example, these conditions depend on the land being used for grain and not taken away…

Like development in the legal realm, fairness in the economy depends on development in the cultural sphere. “Fair and regional” is ultimately based on people appropriating a certain view of the person beginning to be interested in other people and beginning to be interested in the relation of humans and nature. Thus fair trade is dependent on the cultural area and on the education question. People must be educated so they have an interest in each other. They can develop an understanding for the special needs, abilities and inclinations of others to make justice possible in the economic area. The hurdles we have to surmount in education are in no way less than the hurdles in economics or in the legal realm. Since education is not free or unliberated, education is ruled by the powers that carry ou9t injustice. People cannot freely research or be freely educated because education is dependent on state- and economic power… We may not indulge in illusions any more: the educational system is largely in the hand of markets that are hardly interested in justice and fairness…

The economy may not be seen unfiltered. Rather we see it in the way it was instilled through the educational system. It was instilled in us with a very specific picture of the economy. That is the picture of the Homo Oeconomicus, the person who thinks firstly only of himself, who is not interested in his fellow-persons and secondly can know nothing of his fellow-persons since he is completely cut off from them. He only knows the price of the commodity but knows nothing about how this price came about or about the people who produced the good. That is a picture of our economic perception. For that reason our perceptions are deeply unscientific. The Homo Oeconomicus 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.

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-persons was made the cornerstone of our society. Perhaps you know the foundingthers 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. I know neoliberalism is mostly confused with American imperialism or American neo-conservatism. However that is only an example of how neoliberals have completely succeeded in dominating human thinking.

I have grappled in detail with the writings of neoliberal theoreticians who established the social market economy that all the parties had to acept if they did not want to be stamped as enemies of the constitution. First of all, neoliberalism starts from the impossibility that the participants of the economy can 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 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. In the world economy, everyone depends on everyone being in the right place and the right amount of goods produced. 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 judgment of the family father. People can know nothing of each other. Walter Eucken devised the right system for them so the economy does not become chaos. Thus the social market economy arose and neoliberal think tanks built all over the world starting from Germany drummed the idea of the perfect economic system into heads. Now it has become a chaos. In 2012 approximately 30 million had to die an excruciating death from starvation, even people who had worked for the world market. Why? People did not want to know anything of one another…

What must be known to judge the economic process rightly and know the right measures today for our well-being tomorrow? Every day what the farmer needs for life changes. The price structure changes continuously because it depends in a dynamic way on genuine life on what the farmer needs today and will need 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 slip into the role of merchant because the merchant knows what he can sell at what price… Ultimately I must slip 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 in all people involved in the value-creation…

Still the economy is not a private car but a living process that moves and shifts as the expert knowledge of individual persons interact and this expert knowledge meets the needs of individual persons who are living and nature which is also living. This is something fluctuating and dynamic. To guide this, one must feel what every individual feels, observe what everyone sees and what everyone wants. Because this is impossible, I realized after long reflection I cannot dream up the best economic system…

In reality one can create the possibility that the expert knowledge is carried out, that the many limited judgments can combine and be communicated so what is practically possible out of the collaborator of individual judgments becomes concrete. As a result, one stops being a Homo Oeconomicus and begins to see the abilities and needs of his fellow-persons. That is the consequence as soon as one refuses to hit his head against the wall, that one abolishes the Homo Oeconomicus and realizes the possibility of a mutual perception. The consequence is that one annuls the Homo Oeconomicus by being interested in others… The grain prices rise or hit the roof. 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 retailer5s and workers found so all the concerned can live. They dialogue with one another and begin to be interested in others. So one can tackle reality and approach the ideal of justice or fairness.

As soon as the prejudice of Homo Oeconomicus 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 and even marks the Greens-party program gradually loses its appeal. How can this mutual perception become more practical?… Not all the participants in the value-creation chain are at the table. For example, I do not sit at your table although I am part of the value-creation chain. I am part of the value-creation chain. I am one of your customers….”

Leave A Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.