Environmental protection activities in the past have mostly been relegated to the society or the community with respective governments taking up the role of ensuring that these communities or societies have managed the environment properly. In the recent past, the government has shifted its focus to corporate organizations and business to participate in environmental management.
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They have provided direction to the private sector by creating rules, sanctions and regulations that most companies should follow as they adopt environmentally sound behavior. Many governments and business corporations around the world have begun to realize the critical roles they play in environmental protection as well as their contribution to economic growth.
Corporate social responsibility (CSR) to the environment, also known as green management is the duty that the corporate society has to environmental conservation by ensuring its products, services and business operations do not harm the natural ecosystems. Corporate responsibility to the environment, which is also known as green management is the obligation that most companies have to environmental conservation.
Businesses achieve corporate responsibility by eliminating greenhouse emissions and hazardous wastes as well as maximizing the efficient and productive use of raw materials while at the same time minimizing the adverse effects these resources will have to the environment.
These activities are all geared towards creating a safe environment while at the same time, ensuring that there is economic growth in the market. The purpose of this paper will be to analyze the theories of economic justice and how these theories can be applied to corporate responsibility activities.
Theories of Economic Justice
The issue of economic justice and equality emerged during the 20th century with most political theorist’s viewing the two concepts as synonymous. However, libertarians who emerged during this period saw inequality that was balanced to be beneficial to the society.
This was based on the argument for survival of the fittest proposed by Darwin that sent out the message that equality was impossible in the natural context. Most of the political theorists and libertarians have emphasized the importance of inequality but a philosopher known as Robert Nozick has offered a different perspective from these theorists by stating that equalizing resources is immoral (Van der Walt, 2005).
Robert Nozick was a philosopher who wrote on political and economic theories that were based on libertarian ideals of justice. He developed an economic model that formed the basis of his entitlement theory on economic justice, which stated that economic justice could only be achieved in a free market that did not have any taxation laws.
Nozick saw government’s that imposed redistributive or equalizing taxation policies on their citizens as being unjust and creating an environment of forced labor. This line of thinking gave Nozick’s economic model more power and authority among economic justice circles as it argued for economic inequality within the society.
Nozick viewed the taxation of an individual’s income or wealth as a way of enslaving that person to a smaller portion of their income while the rest was redistributed to the society. Economic justice was basically a matter of historical entitlement rather than achieving equal harmonization of resources. What people earned basically belonged to them and not the government. The only time they were under obligation to provide was when government resources were near depletion.
Nozick developed his model by first stating that economic wealth should be equally distributed by conducting a series of transactions with willing buyers (Koecke, 2010). Nozick believed the purpose of economic justice was not to achieve commercial distribution but to provide a sense of inequality that would force society members to increase their wealth. The role of the economic justice theory was to set down rules and regulations that would be used in distributing economic goods (LaFollette, 2002).
Nozick proposed an ideal economic justice theory that stated people who acquired commercial goods in a fair and just manner from other people who had justly owned those goods showed demonstrated that there was just economic goods distribution. The distribution of these industrial goods was made just based on the rules that were followed during the distribution process.
Nozick further argued that ideal distribution could only be achieved if an individual’s liberties were interfered with. If people had freedom, through private transfers, they could change the proper economic distribution so that it does not reflect the ideal. Nozick’s views were that economic, social, or civil liberties were equal (LaFollette, 2002).
John Rawls’ views on economic justice differed from those of Nozick because he focused more on the various financial implications of economic justice. He developed two principles to expound on his theory of justice, the first of which is known as the equality principle, which explained the role the government had of guaranteeing its citizen’s civil liberties. Rawls stated that the government had the obligation of protecting the civil rights entitled to each citizen, especially those that were outlined in the U.S. Constitution.
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He noted that these civil liberties which included the freedom to speech, worship, want and fear were essential to the society and could therefore not be sacrificed to achieve economic well being. These liberties could also not be sacrificed to benefit other society’s members at the behest of a single individual. Rawls noted that after these civil liberties were secure for individual members of the society, a system of distributing economic resources could be developed (LaFollette, 2002).
This system of distributive justice could be implemented by incorporating the second principle proposed by Rawls known as the difference principle which states that the government should distribute economic resources so that the least advantaged members of the society can benefit from the economic distribution. This principle allowed some people within the society to have more economic goods than others, but it only worked as long as they promoted the well being of the less advantaged members of the community.
Rawls argument for these two principles has provided theoretical implications as he has provided a practical and moral perspective in choosing economic principles for distributive justice.
He has offered moral reasons for using the two principles as they are able to minimize the influence of luck or fate in determining the amount of wealth people accumulate in their life. He claims circumstances such as one’s social status, and family background are matters of luck/ fate that should not be used in determining the individual’s economic value or wealth (LaFollette, 2002).
Another contributor to the theory of economic justice was Iris Young, who viewed distribution in economic justice to be an unimportant element. Her view’s differed from those of Rawls as she noted that distributive justice was concerned with handing out goods deemed economical in a fair and just manner, but it ignored the crucial element of equality.
She also highlighted the standard measures that were used to determine justice issues which masked the role social institutions played in determining how economic goods were to be distributed amongst society members.
These standards created cases of inequality when it came to determining which individual member was meant to gain more economic goods in the society that the others. Young argued for the abandonment of the distributive paradigm when it came to economic justice and proposed the use of power and domination relationships in commercial distribution. Her theory was referred to as the displacement of the distributive paradigm (LaFollete, 2002).
Rawls Theory of Economic Justice
The most outstanding feature of John Rawls theory of economic justice is the reconciliation of the two conflicting demands, which are the demands of equality and inequality. Rawls portrays the conflicts in these two demands when he states that all citizens are entitled to civil liberties that will ensure them economic stability as well as ensure the less disadvantaged members of the society are able to receive economic goods that have been distributed equally.
His theory of justice tries to justify the governments’ scope of power in distributing economic wealth to the society’s members. Rawls mostly focuses on social justice by looking at what duties and rights society members have on social institutions that are involved in proper economic distribution (Khawand, 2010).
Rawls theory of justice is stronger than the economic justice theories proposed by Young and Nozick as Rawls argument is based on two principles, which are the equality and difference principle. The equality principle states that every member of the society is entitled to the same liberty that is accorded to other members of the organization while the difference principle deals with rectifying the inequalities that exist in societies or communities so that individual members can benefit from the distribution of economic goods.
These two principles as defined by Rawls form part of a broader framework of conceptual social values which include liberty and opportunity, income and wealth. Rawls arrived at his two principles of economic justice by creating a thought experiment that formed the basis of his original position on economic justice. He developed two premises the first of which was a constraint on social unity and the other being the difference of conceptions that are used to define what is right (Khawand, 2010).
Rawls position on economic justice is based on a contractual view that will create a theory of justice that does not depend on any of the two premises but will depend on a free environment were a society’s members are free to agree reasonably. Social institutions involved in economic distribution activities should therefore not be designed on utilitarianism principles but on principles of justice that would be determined by rationalism. Rawls argues rationalism to be the fair conditions that create the original position of viewing truth as fair. The unique position has characteristics that are necessary for achieving Rawls conclusion on economic justice.
One of these characteristics is that participants in the distribution process seek the guarantee of rights and resources so that they can pursue their understanding of conceptual good.
The other characteristic that is used in explaining the original position is the delineation of critical constraints such as the veil of ignorance which Rawls describes as the lack of knowledge that the participants in the unique position have on conceptual good. Rawls explained the purpose of the veil of ignorance was to prevent people with their self-interests from supporting economic justice principles that were biased and therefore forced them to adopt universal principles.
These made them to be unaware of what economic position they held once they entered the society. This led to a situation where their perspective of the original position was to their advantage rather than their disadvantage. This line of thought led to Rawls position on wealth redistribution where the primary goal of redistributing wealth was distribute economic goods equally amongst the society’s members (Khawand, 2010).
Rawls argued for rationalism when economic actors were faced with uncertainty, a position that was seen as unique by various theorists in economic justice.
This was because he was able to construct it based on individual autonomy instead of conceptual good. Another unique aspect of Rawls theory was that unlike most advocates of distributive justice, he did not conclude his theories with a perspective on conceptual good but on a rational contractarian framework that is used by rational actors to define the rules of social cooperation (Khawand, 2010).
Critics of Rawls theories included Nozick who held the view that inequality had to exist in the economic distribution of goods or wealth in a society. Nozick questioned the validity of Rawls definition of economic justice by stating any theory used to define economic justice should be based on the end result, historical, patterned or unpatterned distribution of economic goods.
Nozick’s theory of entitlement focused on the historical and unpatterned distribution of wealth, which did not necessarily require any conformance to societal patterns and historical information as to how the wealth was acquired.
From his definition of economic justice, Nozick emphasizes the importance of justice in the acquisition and distribution of wealth as opposed to truth in holding the wealth. Nozick’s criticism of Rawls theory of economic justice transcends from his assertion that liberty, be it social, economic or civil, disrupts the justice of holding economic wealth.
Nozick highlighted the critical aspect of holding wealth is the power and freedom it gives to people who transfer the wealth to other people. This meant that economic resources allocated to society members could be changed as long as the individuals felt free when exchanging these possessions. Nozick argued for the use of a patterned system of distributive justice in economic distribution (Khawand, 2010).
Nozick further observed that patterned distributive justice alienated the source of wealth that existed in the society. He noted that an individual’s wealth was something that was taken by the government to be divided equally amongst the society’s members. This was done by taxing the individual’s wealth so that the money could be distributed to the less advantaged members of the community.
Nozick viewed taxation as an unfair and unjust way of distributing economic goods in a society. He viewed taxation as infringing on the economic liberty of society’s members, forcing them to participate in forced labor. He criticized Rawls difference theory which focused on the fact that income tax imposed on an individual’s wealth was not an infringement on their economic liberty as it did not prevent these individuals from participating in legitimate business (University of Waterloo, 2010).
Application of Rawls Theory of Economic Justice in Corporate Responsibility to the environment
Theoretical literature that has focused on corporate responsibility activities has mostly addressed two questions which are what drives companies to engage in corporate responsibility and what effects do corporate responsibility activities have on economic growth and distribution of resources.
Numerous explanations have been advanced to explain the recent increase of CSR activities being used by large companies in environmental conservation one of which is to reduce the number of gas emissions being discharged by most companies into the environment.
In a bid to create a greener and safer environment, companies have created products and services that are environmentally safe and fewer gas emissions. Consumers who buy these green products are willing to pay more for these products or services and firms have responded to this shift in the economic market (Lyon & Maxwell, 2008).
The distribution of corporate responsibility activities has mostly been focused on the less advantaged members of the society, creating a sense of inequality to the other members who are deemed to be well off. Many companies have directed their efforts towards conserving the environment and also improving the lives of low-income members who cannot afford to participate in conservation activities.
This has created a sense of disparity and inequality within the society where the high-income earners are forced to pay for their conservation efforts since they can afford it while the low earners or disadvantaged members of the society have shifted their reliance to companies that have CSR to conserve their environments (Lyon & Maxwell, 2008).
The inequality gap that has been created by corporate responsibility activities can be rectified by Rawls theory of economic justice that addresses the conflicts in equality and inequality demands. Rawls theory states that every member of the society is entitled to civil liberties, which also include the access to a safe and clean environment.
This entitlement to corporate responsibility activities will ensure that the society’s members are able to pursue economic stability in an equal and just way. Rawls theory also highlights the vital role social institutions play in ensuring that there is economic and social justice when it comes to distributing financial resources to the society’s less-advantaged individuals.
The equality and difference principle formulated by Rawls proposes that the equality and inequality issues that exist in a society should be rectified to ensure that everyone benefits from the commercial distribution activities as well as corporate responsibility activities. These two principles form a more significant part of what constitutes society’s values. For a company to implement its CSR activities in the community, it has to take into consideration the equality aspect of how these activities will be distributed
The equality and difference principles as outlined by Rawls are an essential tool in dealing with the distribution of economic resources in the society. Economic justice is an important concept as it ensures that there is the equal distribution of resources in a society with particular focus on how much should be allocated to the disadvantaged communities of an organization.
While various theorists and philosophers such as Novick and Young have argued against distributive justice and equality in economic justice by stating these concepts are standardized and immoral, Rawls theory has provided essential arguments that have shown the relevance of equality in social and economic justice.
The importance of the theory of justice on corporate responsibility activities that have been directed towards societal conservation efforts will ensure that there is an equal distribution of these activities to all members of the society.
Khawand, C., (2010). Rawls’ theory of justice and some objections. Web.
Koecke, T., (2010). Economic justice: a critique of Robert Nozick and the New Libertarianism. Web.
LaFollette, H., (2002). Ethics in practice: an anthology, Oxford, UK: Blackwell Publishing.
Lyon, T.P., & Maxwell, J.W., (2008). Corporate social responsibility and the environment: a theoretical perspective, Review of Environmental Economics and Policy, Vol. 1, pp. 1-22.
University of Waterloo (2010). A puzzle about economic justice in Rawls’ Theory: The Rawlsian thesis. Web.
Van der Walt, A.J. (2005). Theories of social and economic justice. Victoria, South Africa: Sun Press.