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Introduction: economic thought, moral persuasion, and justice

The purpose of this book is to draw attention to a significant blind spot in the development of political liberalism, understood broadly as the political philosophy of individual freedom within a framework of individual rights in the tradition claiming John Locke as one of its early articulators. I say at the outset that, while the argument I present is a critique of liberalism, I mean it as a contribution to the ongoing effort that is part of the history of liberalism’s development to help the liberal project achieve its goal of promoting human freedom and flourishing. I believe there is hope for liberalism, but caution that a self-congratulatory attitude that the project of liberalism is now fully complete can ruin any such hopes. The argument of this book is fairly simple, but counter-intuitive: the development of economic theory in the modern era has reconfigured the way we think about justice, leading us to think about justice primarily in terms of bargaining and ownership, especially of material goods, and not to think about justice in terms of relational matters. This reconfiguration happened as part of the historical development of political liberalism through the foregrounding and elevation of justice in exchange – commutative justice – in economic theory. As a consequence of this elevation of commutative justice, the idea of what the community owes the individual – distributive justice – was diminished into norms of appropriate behaviors in social and market interactions, in the process diminishing relational justice into decorum.1 Economic theorizing developed the animating principle of economic activity as an independent domain of social interaction, articulating the hitherto misunderstood natural dynamics of the economic operation of society. By ceasing or removing mistaken efforts to direct and control economic life, so the story went, the market would naturally find its own productive equilibrium and greatly increase its productive output – the invisible hand thesis. In order for this increase in wealth to happen, all that was necessary besides removing controls was a commutative framework of law and legal institutions, and the following of social and market norms of behavior; this process would become self-reinforcing and self-reproducing, and could therefore be called a “natural” outcome that would lead to greater wealth all around. This promising picture of natural self-regulation is problematic, however, because it depends on the persuasiveness of the social and market norms in

question, persuasive enough that people use them to guide and change behavior. This persuasiveness is what I mean by moral rhetoric – as a first approximation, the use of praise and blame that work to valorize the norms in question. While moral rhetoric is necessary to the arguments of Adam Smith and Milton Friedman, as I will show, it has produced unintended consequences that belie the promise of a naturally ethical, naturally productive self-regulating economic order. Praise and blame comprise the character-oriented language of rhetoric, and its field of operation is the backdrop of normative appropriateness as understood by an audience. Social and market norms of behavior generate standards of behavior – including speech as behavior – that come under the general heading of decorum, or appropriateness. To know what to do or say in a given situation is to be cognizant of the situation’s decorum, what it calls for. To understand a situation well means being able to understand not only the gross circumstances of time and place, but also how others view the situation and how one stands in relation to them. So to say that the relational dimensions of distributive justice have shrunk into decorum is to say that those demands of distributive justice are now performed by participation in the decorums of social and market interaction. The problem this produces is that the decorums in question may be about appropriateness, but they are too circumscribed to handle the burden of demands of justice. To put this another way, to revive a substantial distributive justice would entail being able to call a particular decorum – that is, a set of norms and its corresponding expectations of behavior – into question as unjust. The reliance on decorum in the modern elevation of commutative justice is inadequate to this function of distributive justice. This has led to distortions because of commutative justice’s insufficiency in providing an adequate background understanding by which individuals would be able to comprehend their places in the social order relative to others. Such a background understanding is fundamental to self-perception as a social being, and is the basis – call it the condition of possibility – for making any assessment of what appropriate norms would be, and only against such a background could an appeal to injustice in relational behavior be made. I argue that an understanding of the workings of rhetoric help us understand how language of praise and blame functions to construct a decorum – a set of norms of appropriateness – that creates a picture of how people ought to stand in relation to one another, including what their possibilities for action and communication are in given situations. The economic arguments I find in my textual analysis of Adam Smith and Milton Friedman portray the process I described above: an explicit argument for an unconstrained market within bounds of commutative justice that only works because of an implicit argument for the need to follow social and market decorum. Smith’s and Friedman’s explicit argument is that freeing economic interaction from various efforts at control, especially government control, within a framework of commutative justice will be more productive of wealth than any other

arrangement. The problem of controlling markets for both Smith and Friedman is that it limits competition, so making sure of competition is the key to a productive and just economy. The ubiquity of efforts to control the market, however, raises doubts about whether competition will actually occur. These doubts are answered by Smith’s and Friedman’s implicit argument about the need for appropriate behavior – that is, social and market decorum; the moral rhetoric works not simply by instructing the reader in virtuous behavior, which it does to some extent, but even more by enlisting the reader’s identification with moral disapproval of those who would thwart competition. Hence this moral rhetoric that competition is worthy has a political edge: it invites us not so much to judge ourselves as to judge the behavior of others. The economic system will work, then, when we, the readers, direct our disapproval against those who would thwart competition, lend our support to norms of behavior that encourage competition, and in short, become members of the discourse community Smith and Friedman invite us to join. To say that moral rhetoric is persuasive in this way is to raise the question of how persuasion happens, how rhetoric works. Two broad and differing views of rhetoric come down to us from classical times: one, that rhetoric is about manipulating people to get what one wants of them; the other, that rhetoric is about solving problems of contingent judgment. The second of these is the correct way to think of rhetoric, in my view; in fact, these two views are of different orders. The “manipulation” perspective focuses primarily on the issue of ethics, and especially intent to deceive. The “contingent judgment” perspective is more broadly and more functionally a way of thinking about practical reason. So to be critical of Smith’s and Friedman’s use of moral rhetoric does not mean that I must believe they are manipulative. The question is not whether I believe they intend to deceive their readers. Deception usually is concerned with concealing something. The important thing to discover is what they do want their readers to think, how they want their readers to perceive situations, judge character, and evaluate actions – in short, which attitudes and dispositions they would like their readers to share. To share attitudes is part of the process of identifying with another, establishing or finding common ground, that is the powerful outcome of effective persuasion. Still, what does it mean to be persuaded in this sense of coming to share attitudes? The argument I advance in this book is that the best way to understand the operation of persuasion, of rhetoric, is that it operates within discourse communities – that is, among people who share overlapping sets of mutually understood ways of looking at the world. Discourse communities are purposive insofar as their discourses – speech, writing, symbolism of any sort – are about something that engages their members. Discourse communities are likewise always works-in-progress, and as such inherently rhetorical, as their members participate in their maintenance and revision. Discourse communities are therefore multiple; they are communities of interests. Each of us holds membership in dozens of such discursive communities to the extent that we participate in their discourses; we can detect that by thinking

of tastes we share in music, movies, reading, and so on, but also in our political inclinations, our religious worship, our family arrangements, and so on. Discourse communities can provide a sense of belonging that we need to shape our identities. We join these communities because they speak to us in some way that we value. Sometimes we can even remember the event that sparked our desire to join – the book read, the song heard. So in thinking of persuasion as an invitation into a discourse community, Smith’s and Friedman’s moral arguments matter not just because they may incline a reader to agree with their economic arguments, i.e., find the explicit economic argument convincing because the implicit moral argument is appealing. Their moral arguments matter because they also work to shape the reader’s attitudes, to bring them more fully into the discourse community of economics understood as a science of natural phenomena of human social behavior. Pointing out the presence and function of the moral persuasion in economic argument in the first part of the book leads to a consideration of the consequences of a commutative-distributional paradigm in the second part. The argument for a market society grounded in commutative justice that is in turn supplemented by social and market decorum has become a tremendously powerful influence, making distributive justice outmoded and irrelevant, in effect. In the second part of the book, I look at the shortcomings of such a vision of a natural social order. The elevation of commutative justice as the primary principle of justice, I argue, has inadvertently assigned to it the function of relational coordination formerly done by distributive justice; that is, the scheme of how we are to understand our relation to each other comes through the lens of commutative justice. The modern transformation of distributive justice to mean material distribution generates three bad outcomes: (1) it separates material distribution from a relational framework; (2) it puts an undue relational burden on ordinary social decorum; and (3) it develops a market decorum that increasingly and ironically threatens commutative justice itself. In the first bad consequence, divorcing distribution from any but market terms of relationship can lead to welfare distribution accompanied by contempt. In the second, the operation of distribution through the market subordinates ordinary social decorum into a kind of social lubricant, but the demands of the market, in being preeminent, degrade social decorum’s standards of appropriateness. This is the kind of problem that we encounter when we hear someone (ourselves, perhaps) saying “it’s nothing personal” or “it’s just business,” when saying or hearing those words means we have to swallow a reaction of inappropriateness (“but, but . . .”). Social appropriateness must bow to market precedence, which erodes social decorum’s purview, grinding appropriateness down to a generalized and increasingly meaningless conventionality. Alternatively, social decorum reacts defensively, lessening the scope of its reach but jealously guarding what authority remains. In the third bad consequence, market decorum – appropriateness in doing business – itself comes under pressure from the burden of the relational significance that the market takes on under the elevation of commutative justice. More than just the manners of buyer and seller are at stake; to be worthy of honor, one

must succeed in the marketplace. As a result, not only is the satisfaction of selfinterest at stake in the market, but also the satisfaction of the need for approbation that underlies sociability. The constraining influence of approbation on self-interest that marks Smith’s and Friedman’s arguments becomes reversed, and competition becomes transformed into gaining an advantage in agreements. Coming as it does at the historical moment when justice in exchange becomes even more purely identified with the sheer fact of agreement itself, the act of mutual consent in contract that constitutes its justice, commutative justice is made problematic by the desire for advantage, for getting the upper hand. In addition to these problems with the asserted natural development of a productive and just commutative economic order, the discourse of the market has also heavily influenced attempts to think critically about the market order. Even critics of the condition of the market order remain caught in the distributional understanding of distributive justice and do not pay enough heed to the relational problems. In effect, even important critical perspectives continue to partake overmuch in the commutative-distributional paradigm, accepting its principles as basic elements of a market society. The influence of the commutative-distributional paradigm in moral and political philosophy can be seen in the work of John Rawls and Jürgen Habermas. The appropriations of Kantian deontology by Rawls and Habermas neglect important relational matters. Rawls’s theory of justice as fairness accepts the commutative paradigm too completely, even down to his theoretical model of the social contract. Habermas’s adaptation of Kantian deontology similarly suffers from an inadequate view of relational matters, though differently from Rawls in that Habermas attempts to develop a communicative theory of rationality (unlike Rawls’s bargaining agent in the original position, who engages in solitary reflection). I assess Habermas’s theory of communicative action as not communicative enough, that is to say, not relational enough, especially with respect to his theory of language and his theory of moral development. On the question of language, a critique from a rhetorical perspective shows a way to amend his language theory of universal pragmatics, which is inadequately relational in nature, and hence commutatively oriented. On the issue of moral development, Habermas’s reliance on Lawrence Kohlberg’s theory of moral development is hurt by Kohlberg’s basic acceptance of a commutative paradigm. Carol Gilligan’s critique helps clarify Kohlberg’s commutative orientation and its narrow relational awareness and points toward a more rhetoric-compatible sensibility in the development of narratives in the moral imagination. A different critique of current conditions that offers a more promising path is found in the exchange between Nancy Fraser and Axel Honneth in Redistribution or Recognition? Honneth’s effort to adapt Hegel’s theory of recognition shows promise for bringing relational questions back into prominence. Fraser’s argument, on the other hand, as critical of current market society as it is, remains pretty much within the terms of the modern commutative-distributional framework. Honneth’s adaptation of recognition as a crucial concept moves more

decisively in the direction of relational matters of justice, but Honneth appears to accept too readily the standards of achievement in the current social order as the basis for recognition, standards that have been distorted by the commutativedistributional paradigm. While Fraser, Honneth, and others are working toward understanding and cultivating some degree of solidarity as a way of correcting distributional problems, solidarity within a commutative-distributional paradigm is nevertheless still not promising for resolving the relational problem. Recognition may help foster solidarity, but if recognition’s price is achievement in a commutative-distributional framework it will recreate the problem. Recognition as a concept needs to have another basis besides achievement. Restoring a distributive perspective that takes relational matters seriously, I argue, is a communicative problem; simply put, it is only by being able to talk about relational matters as justice that we can do justice to them. If it is to restore distributive justice to its place, recognition must encompass the acknowledgment that complaints about relational injustice have a right to be heard. That could upset a narrowly conceived solidarity. To illustrate what such acknowledgment would look like, I turn to Stanley Cavell’s work on moral perfectionism to note the central role played by the moral demand to be heard. Cavell’s idea – to want the world as it is and to want it to change – brings the problem of the distortion of the commutative –distributional order into focus: the distortion prevents us from thinking of such demands to be heard as being moral at all, as being matters of justice at all. The problem of assigning norms of appropriateness entirely to social or market decorum is that in those decorums, claims cannot take on the weight of a claim about injustice. Only by restoring a willingness to listen can such a claim be heard, and willingness to listen can be developed by cultivating a rhetorical sensibility that consists of more than just deliberative expediency. So my argument is not that we should not have markets, or that commutative justice is not important, but that markets and commutative justice are distorted, and distort us, by our acceptance of the idea that commutative justice is the only justice that matters. Similarly, issues of material distribution are important, but they too become distorted without a relational connection. A rhetorical awareness helps us notice how moral persuasion functions, and also helps us increase our awareness of how we live much of our lives in our discourse communities – not just communities of interests, but communities of meanings as well. Small wonder, then, that how we talk to each other matters – that speaking, being heard, and hearing matters, even to the level of justice. A persuasive invitation to join, or help shape, or revise a discourse community continues to matter. Habermas goes too far in claiming that practical reason can no longer be of use in public judgment, having been relegated to the guidance of personal life. That ignores the ever-ongoing development of practical reason in discourse communities that occurs through the constant inventional processes of trying out revised identities and new strategies to keep pace with the changing shape of the world. Habermas is correct to say there is not a single form of practical reason with which all would agree, but to acknowledge the

place of discourse communities in the communicative interaction of our lives is to admit to our membership in many smaller communities. Keeping these discourse communities alive, which is to say lively and full of life, is important. That is where people live their lives, and where recognition enables self-development. But unwillingness to listen and failure to recognize puts a strain on discourse communities, and these failures come from the dominance of the commutative-distributional paradigm. It remains powerful and is deeply embedded in our habits of thought. Changing those habits will not be easy.