Freeman

ARTICLE

A Page on Freedom: Number 22

AUGUST 01, 1985 by HOWARD BAETJER JR.

Is It Fair?

Many think we can decide fairness by looking at how things are. We can’t. Fairness depends on how they got that way.

Advocates of a faulty doctrine called “comparable worth” say it is unfair that women in certain jobs are paid less than men in other jobs these advocates deem equally valuable. Some American auto makers say it is unfair that the Japanese can sell their cars for less than American counterparts. Advocates of income redistribution say it is unfair for wealthy people to accumulate more wealth than others.

But these inequalities are not necessarily unfair. They might be, of course. Suppose the women are paid less because the men have a union which forces employers (through violent strikes) to pay them above-market wages. That would be unfair. Or suppose the Japanese can sell their cars for less because the U.S. government imposes quotas on the number of American cars sold. That would be unfair. Suppose wealthy people receive more income than others because the government gives them other people’s money. That, too, would be unfair. Each of these situations would be unfair—not because of their inequality, but because they occur through force.

On the other hand, if the wages are freely negotiated and agreed upon, if Japanese cars sell cheaper because Japanese auto workers produce more for less pay, if the rich make their money by providing a desired product at an affordable price, all is fair no matter how unequal. We might not choose those outcomes, but they are fair.

Process determines fairness—fair process, fair outcome. If a process involves force and legal privilege, its outcome is unfair, though equality itself. But as long as a process is free and peaceful, its outcome is fair.

This is why the market process—free, peaceful exchange—embodies economic justice.

—Howard Baetjer Jr.

THE FOUNDATION FOR ECONOMIC EDUCATION, INC.
IRVINGTON-ON-HUDSON, NEW YORK 10533

ASSOCIATED ISSUE

August 1985

ABOUT

HOWARD BAETJER JR.

Howard Baetjer Jr. is a lecturer in the department of economics at Towson University and a faculty member for seminars of the Institute for Humane Studies. This article is based on ideas from his book, Free Our Markets: A Citizens’ Guide to Essential Economics.

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