Sunday, January 12, 2014

Thoughts on "Fair Wages"

In 1918 John Ryan a Catholic priest at Catholic University in DC wrote a book entitled Distributive Justice (MacMillan, New York). I believe it is worth going back to some of the remarks of Ryan and try to understand some of the issues today in the context of a century ago. Let us begin with some of his definitions: 

Distributive justice is primarily a problem of incomes rather than of possessions. It is not immediately con­cerned with John Brown's railway stock, John White's house, or John Smith's automobile. It deals with the morality of such possessions only indirectly and under one aspect; that is, in so far as they have been acquired through income. Moreover, it deals only with those incomes that are derived from participation in the process of pro­duction. For example; it considers the laborer’s wages, but not the subsidies that he may receive through charity or friendship. Its province is not the distribution of all the goods of the country among all the people of the coun­try, but only the distribution of the products of industry among the classes that have taken part in the making of these products. 

These classes are four, designated as landowners, capi­talists, undertakers or business men, and laborers or wage earners. The individual member of each class is an agent of production, while the instrument or energy that he owns and contributes is a factor of production. Thus, the land­owner is an agent of production because he contributes to the productive process the factor known as land, and the capitalist is an agent of production because he contributes the factor known as capital; while the business man and the laborer are agents not only in the sense that they con­tribute factors to the process, but in the very special sense that their contributions involve the continuous expendi­ture of human energy. …

Moreover, there is the more fundamental ethical question concerning the titles of distribution: whether mere ownership of a factor of production gives a just claim upon the product, as in the case of the landowner and the capitalist; whether such a claim, assuming it to be valid, is as good as that of the laborer and the business man, who expend human energy m the productive process.Productive activity should be rewarded at different rates; in what proportion. Why should the capitalist receive six percent, rather than two percent, or sixteen percent? Why should the locomotive engineer receive more than the trackman? Why should not all persons be compensated equally? Should all or any of the benefits of industrial improvements go to the consumer? Such are typical questions in the study of distributive justice. They are sufficient to give some idea of the magnitude and difficulty of the problem. 

To Ryan then and to the Progressives now Distributive Justice is allocation by some mechanism other than the Free Market of profits, and land and wealth in general. He accepts that individual ownership is not acceptable as it stood at that time and one would suspect now as well. He continues: 

that individuals are morally justified in becoming and remaining landowners. May we take a further step, and assert that private landownership is a natural right of the individual? If it is, the abolition of it by the State even with compensation to the owners, would be an act of injustice. The doctrine of natural rights is so prominent in the arguments of both the advocates and the opponents of private landownership that it deserves specific treat­ment Moreover, the claim that private landownership is a natural right rests upon precisely the same basis as the similar claim with regard to the individual ownership of capital; and the conclusions pertinent to the former will be especially applicable to the latter. A Natural right is a right derived from the nature of the individual, and existing for his welfare. Hence it differs from a civil right, which is derived from society or the State and is intended for a social or civil purpose. Such, for example, is the right to vote or the right to hold a public office. Since a natural right neither proceeds from Z is primarily designed for a civil end, it cannot be an­nulled and it may not be ignored, by the State, for example, the right to life and the right to liberty are so sacred to the individual, so necessary to his welfare, that the State cannot rightfully kill an innocent man, nor pun­ish him by a term in prison. 

Thus he does attribute a right to land and property. But he does so through a principle of a Civil rather than a natural right. This is a twisting of Thomistic Theory. Now he moves to a Fair Wage. He states: 

Although the principle of needs is somewhat promi­nent among the theories of wage justice, it received only incidental mention in the last chapter. Considered as a comprehensive rule, this principle has been defended with less energy and definiteness than most of the other canons. Considered as a partial rule, it is sound and fundamental, and therefore could not have been classed among theories that are unacceptable. 

The Principle of Needs: Many of the early French Socialists of the Utopian school advanced this formula of distribution: “From each according to his powers; to each according to his needs."…The difficulties confronting it are so great and so obvious that they would defer the introduction of it to a time when the operation of their system will, they hope, have eradicated the historical human qualities of laziness and selfishness. To adopt needs as the sole rule of distribution would mean, of course, that each person should be rewarded in proportion to his wants and desires, regardless of his efforts or of the amount that he had produced. The mere statement of the proposal is sufficient to refute it as regards the men and women of whom we have any knowledge. In addition to this objection, there is the insuperable difficulty of measur­ing fairly or accurately the relative needs of any group composed of men, women, and children. … Indeed, the standard of needs should be re­garded as a canon of Communism rather than of Social­ism; for it implies a large measure of common life as well as of common ownership, and paternalistic supervision of consumption as well as collectivist management of pro­duction. 

The Right to a Decent Livelihood: Every man who is willing to work has, therefore, an inborn right to sustenance from the earth on reasonable terms or conditions. This cannot mean that all persons have a right to equal amounts of sustenance or income; for we have seen on a preceding page that men's needs, the primary title to property, are not equal, and that other canons and factors of distribution have to be allowed some weight in determining the division of goods and opportunities. Nevertheless, there is a certain minimum of goods to which every worker is entitled by reason of his inherent right of access to the earth. He has a right to at least a decent livelihood. That is; he has a right to so much of the requisites of sustenance as will enable him to live in a manner worthy of a human being. The elements of a decent livelihood may be summarily described as: food, clothing, and housing sufficient in quantity and quality to maintain the worker in normal health, in elementary com­fort, and in an environment suitable to the protection of morality and religion; sufficient provision for the future to bring elementary contentment, and security against sickness, accident, and invalidity; and sufficient opportu­nities of recreation, social intercourse, education, and church-membership to conserve health and strength, and to render possible in some degree the exercise of the higher faculties.


These rights are thus not only to a salary but to all other things as he describes them. The list above is significant because it was presented in 1918 and not last week! He then goes on to describe what he calls the Principal Canons of Distributive Justice: 

Before taking up the question of the morality of profits, it will be helpful, if not necessary, to consider the chief rules of justice that have been or might be adopted in dis­tributing the product of industry among those who par­ticipate actively in the productive process. …The canons of distribution applicable to our pres­ent study are mainly six in number: arithmetical equality; proportional needs; efforts and sacrifices; comparative productivity; relative scarcity; and human welfare. (1) The Canon of Equality: According to the rule of arithmetical equality, all per­sons who contribute to the product should receive the same amount of remuneration. … It is unjust because it would treat unequals equally… (2) The Canon of Needs: The second conceivable rule is that of proportional needs. It would require each person to be rewarded in accordance with his capacity to use goods reasonably. If the task of distribution were entirely independent of the process of production, this rule would be ideal; for it would treat men as equal in those respects …Like the rule of arithmetical equality, the rule of pro­portional needs is not only incomplete ethically but impos­sible socially. …Moreover, any attempt to distribute rewards on this basis alone would be injurious to social welfare. It would lead to a great diminution in the productivity of the more honest, the more energetic, and the more efficient among the agents of production. (3) The Canon of Efforts and Sacrifice: The third canon of distribution that of efforts and sacri­fices, would be ideally just if we could ignore the questions of needs and productivity. But we cannot think it just to reward equally two men who have expended the same quantity of painful exertion, but who differ in their needs and in their capacities of self-development. To do so would be to treat them unequally in the matter of welfare, … (4) The Canon of Productivity: According to this rule, men should be rewarded in pro­portion to their contributions to the product. It is open to the obvious objection that it ignores the moral claims of needs and efforts. … When men of equal productive power are performing the same kind of labour, superior amounts of product do represent superior amounts of effort; when the tasks differ in irksomeness or disagreeableness, the larger product may be brought into being with a smaller expenditure of painful exertion. If men are unequal in productive power their products are obviously not in proportion to their efforts. … (5)The Canon of Scarcity: It frequently happens that men attribute their larger re­wards to larger productivity, when the true determining element is scarcity. The immediate reason why the engine driver receives more than the track repairer, the general manager more than the section foreman, the floorwalker more than the salesgirl, lies in the fact that the former kinds of labour are not so plentiful as the latter. …As between two men performing different tasks, superior skill receives su­perior compensation simply because it can command the greater compensation; and it is able to do this because it is scarce. …(6) The Canon of Human Welfare: We say "human" welfare rather than "social" wel­fare, in order to make clear the fact that this canon con­siders the well-being of men not only as a social group, but also as individuals. It includes and summarizes all that is ethically and socially feasible in the five canons already reviewed. It takes account of equality, inasmuch as it regards all men as persons, as subjects of rights; and of needs, inasmuch as it awards to all the necessary partici­pants in the industrial system at least that amount of re­muneration which will meet the elementary demands of decent living and self-development. … Owing to the excep­tional hazards and sacrifices of their occupation, a com­bination of producers might be justified in exacting larger compensation than would be accorded them …

Ryan leaves the reader somewhat with the old adage, “on the one hand, on the other hand”. He does however demand a living wage, yet it is left undefined, only that it must cover all the factors he outlined. Finally with regard to Profits Ryan states: 

The Question of Indefinitely Large Profits: As a general rule, business men who face conditions of active competition have a right to all the profits that they can get, so long as they use fair business methods. This means not merely fair and honest conduct toward competi­tors, and buyers and sellers, but also just and humane treatment of labour in all the conditions of employment, especially in the matter of wages. When these conditions are fulfilled, the freedom to take indefinitely large profits is justified by the canon of human welfare. The great majority of business men in competitive industries do not receive incomes in excess of their reasonable needs. Their profits do not notably exceed the salaries that they could command as hired managers, and generally are not more than sufficient to reimburse them for the cost of education and business training, and to enable them to live in reason­able conformity with the standard of living to which they have become accustomed. Efforts and sacrifices are reflected to some extent in the different amounts of profits received by different business men. When all due allowance is made for chance, pro­ductivity, and scarcity, a considerable proportion of profits is attributable to harder labour, greater risk and worry, and larger sacrifices. Like the principle of needs, that of efforts and sacrifices is a partial justification of the busi­ness man's remuneration. Those profits which cannot be justified by either of the titles just mentioned, are ethically warranted by the prin­ciples of productivity and scarcity. This is particularly true of those exceptionally large profits which can be traced specifically to that unusual ability which is exempli­fied in the invention and adoption of new methods and processes in progressive industries. The receivers of these large rewards have produced them in competition with less efficient business men.


The question as to the above is who makes all these decisions? Government? Well a century later we see what has transpired. But let us read Timothy 5(16) 

If any of the faithful have widows, let him minister to them, and let not the church be charged: that there may be sufficient for them that are widows indeed.


This is Paul stating the Individual responsibility, not the Church or the State. One wonders how this conflict is resolved.