If we wish to live within a system in which people are rewarded for how well they serve their fellow men, it follows that their fellows may not rank their services as high as we expect. Teachers, for example, may be “underpaid.” The choices made by one’s fellows are also free, and introduce a major contingency into the most strenuous efforts and best-laid plans. Sometimes people who work hard and play by the rules are not as well rewarded as others, and sometimes their best efforts fail. For the system as a whole, failures by individuals are important, embodying significant negative feedback from which others may learn. A system that values both trial-and-error and free choice is in no position to guarantee outcomes in advance. Not every acorn becomes an oak; laws of probability work in the social order as well as in nature. No one predetermines or controls who will fail, but every law of probability says that some will. It is not unjust if some acorns fail to become oaks, and it is not unjust if some free acts fail of their intended outcomes.
The attribute of justice may thus be predicated about the intended results of human action but not about circumstances which have not deliberately been brought about by men. Justice requires that in the ‘treatment’ of another person or persons, i.e. in the intentional actions affecting the well-being of other persons, certain uniform rules of conduct be observed. It clearly has no application to the manner in which the impersonal process of the market allocates command over goods and services to particular people: this can be neither just nor unjust, because the results are not intended nor foreseen, and depend on a multitude of circumstances not known in their totality to anybody. The conduct of individuals in that process may well be just or unjust; but since their wholly just actions will have consequences for others which were neither intended nor foreseen, these effects do not thereby become just or unjust.17
Moreover, it is indispensable to recognize that the term “market” refers to nothing other than the free choices of human beings in exchange: if I sell my house to you, our mutual choosing constitutes “a market.” How these choices will work out for each of us cannot be controlled by either of us.18
Hayek’s vision of the free society is nobler and higher than the vision of those who speak of “social justice.”19 They imagine something like a beehive or a herd or a flock, within which someone is responsible both for giving commands and for outcomes. Hayek thought that a free society has no other model in nature, but is wholly unique to the human species. Furthermore, it has been put into practice only during the past two centuries. Only in recent generations has the economic order been intellectually (and in practice) distinguished in its principles of operation from the political order, and both of them from a third, the moral and cultural order. The working of all three of them together is necessary, but the three orders each proceed according to different rules. Further, institutions and practices have arisen that allow individuals unprecedented scope for the actions proper to free persons, and in all three spheres.
Hayek held that free persons are self-governing, able to live by internalized rules (that is, good habits). For this reason, they need only a fair and open system of rules in order to act more creatively, intelligently, and productively than persons in any other form of society. While the free society will never be able to guarantee the outcomes desired by those who speak of “social justice,” it does, Hayek observed, bring more rewards to all, on all reward levels, than any known system. It cannot and will not produce equal rewards for all, only higher rewards for all. Hayek summarizes this position as follows:
We are of course not wrong in perceiving that the effects of the processes of a free society on the fates of the different individuals are not distributed according to some recognizable principle of justice. Where we go wrong is in concluding from this that they are unjust and that somebody is to blame for this. In a free society in which the position of the different individuals and groups is not the result of anybody’s design . . . the differences in reward simply cannot be meaningfully described as just or unjust.20
Hayek observed that within any one trade or profession, the correspondence of reward to individual ability and effort is probably higher than is generally supposed. He surmised, however, that the relative position of those within one trade or profession to those in another is more often affected by circumstances beyond their control.21 In certain fields of endeavor, too, for reasons not related solely to hard work or even ability, rewards are higher, even fantastically higher, than in other fields. Television hosts, movie stars, and professional athletes seem to some abnormally overpaid. He concedes that “systematic” considerations of this sort lead to accusations against the existing order rather than against the luck of circumstances of time and place. Technological change, changes in tastes and needs, and changes in relative value are also unpredictable, and in that larger sense spring not from the realm of choice but from the realm of luck.22
Throughout, Hayek makes a sharp distinction between those failures of justice that involve breaking agreed-upon rules of fairness and those that consist in results that no one designed, foresaw, or commanded.23 The first earned his severe moral condemnation. No one should break the rules; freedom imposes high moral responsibilities. The second, insofar as they spring from no willful or deliberate act, seemed to him not a moral matter, but an inescapable feature of all societies and of nature itself. Insofar as labeling these results a “social injustice” leads to an attack upon the free society in order to move it toward a command society, he strenuously opposed the term for its enormous destructive potential. The historical records of the command economies of Nazism and Communism warranted his revulsion to that way of thinking.
Hayek recognized that at the end of the nineteenth century, when the term “social justice” came to prominence, it was first used as an appeal to the “ruling classes” (as they still were) to attend to the needs of the neglected new masses of uprooted peasants who had become urban workers. To this he had no objection. What he did object to was careless thinking and the coercion of free and creative societies by a remote conception of justice.24 Careless thinkers forget that justice, in the nature of the case, is social. The addition of “social” to “justice” is like adding “social” to “language.”25 This move becomes especially destructive when the term “social” no longer describes the actual outcome of the virtuous actions of many individuals, but rather a utopian goal. Toward such utopian goals, as Mill put it, all institutions and all individuals are to “the utmost degree made to converge.” In that case, the term “social” in “social justice” does not refer to something that emerges organically and spontaneously from the rule-abiding behavior of free individuals, but rather from an abstract ideal imposed from above.26
Behind Hayek’s objections to the careless use of “social justice” lies his uniquely powerful insight into the nature of the free society. Hayek recognized that the nineteenth century’s addition of the free economy to the eighteenth century’s “new science of politics” had liberated women and men as never before. For instance, in lifting the proletariat into the middle class, as even the Marxist Antonio Gramsci had confessed in the 1930s, capitalism was far more successful than Marx and Lenin had predicted. Soon, he saw, there would be no more proletariat in Italy.27 With great rapidity, in little more than a hundred years, Europe’s impoverished, uprooted peasants (Victor Hugo’s les misérables) had been lifted into the middle class and educated and were astonishing the world by