Justice_ What's the Right Thing to Do_ - Michael Sandel [8]
Confronted with public outrage over paying bonuses for failure, the CEOs argued that financial returns are not wholly their own doing, but the product of forces beyond their control. They may have a point. But if this is true, there’s good reason to question their claim to outsized compensation when times are good. Surely the end of the cold war, the globalization of trade and capital markets, the rise of personal computers and the Internet, and a host of other factors help explain the success of the financial industry during its run in the 1990s and in the early years of the twenty-first century.
In 2007, CEOs at major U.S. corporations were paid 344 times the pay of the average worker.33 On what grounds, if any, do executives deserve to make that much more than their employees? Most of them work hard and bring talent to their work. But consider this: In 1980, CEOs earned only 42 times what their workers did.34 Were executives less talented and hardworking in 1980 than they are today? Or do pay differentials reflect contingencies unrelated to talents and skills?
Or compare the level of executive compensation in the United States with that in other countries. CEOs at top U.S. companies earn an average of $13.3 million per year (using 2004–2006 data), compared to $6.6 million for European chief executives and $1.5 million for CEOs in Japan.35 Are American executives twice as deserving as their European counterparts, and nine times as deserving as Japanese CEOs? Or do these differences also reflect factors unrelated to the effort and talent that executives bring to their jobs?
The bailout outrage that gripped the United States in early 2009 expressed the widely held view that people who wreck the companies they run with risky investments don’t deserve to be rewarded with millions of dollars in bonuses. But the argument over the bonuses raises questions about who deserves what when times are good. Do the successful deserve the bounty that markets bestow upon them, or does that bounty depend on factors beyond their control? And what are the implications for the mutual obligations of citizens—in good times and hard times? Whether the financial crisis will prompt public debate on these broader questions remains to be seen.
Three Approaches to Justice
To ask whether a society is just is to ask how it distributes the things we prize—income and wealth, duties and rights, powers and opportunities, offices and honors. A just society distributes these goods in the right way; it gives each person his or her due. The hard questions begin when we ask what people are due, and why.
We’ve already begun to wrestle with these questions. As we’ve pondered the rights and wrongs of price gouging, competing claims to the Purple Heart, and financial bailouts, we’ve identified three ways of approaching the distribution of goods: welfare, freedom, and virtue. Each of these ideals suggests a different way of thinking about justice.
Some of our debates reflect disagreement about what it means to maximize welfare or respect freedom or cultivate virtue. Others involve disagreement about what to do when these ideals conflict. Political philosophy cannot resolve these disagreements once and for all. But it can give shape to the arguments we have, and bring moral clarity to the alternatives we confront as democratic citizens.
This book explores the strengths and weaknesses of these three ways of thinking about justice. We begin with the idea of maximizing welfare. For market societies such as ours, it offers a natural starting point. Much contemporary political debate is about how to promote prosperity, or improve our standard of living, or spur economic growth. Why do we care about these things? The most obvious answer is that we think prosperity makes us better off than we would otherwise be—as individuals and as a society. Prosperity matters, in other words, because it contributes to our welfare. To explore this idea, we turn to utilitarianism, the most influential account of