Are the differences between capitalism's and socialism's analysis of resource distribution fairness fundamental?

Question

I have always understood a (broadly speaking) capitalist, free market approach to economics to rest on the notion that a resource distribution is fair in light of how closely it correlates the resources an individual or firm receives to the value they contribute to the market. This value might be apparent and concrete, such as a good, service, loan, land utilization, labor, etc., or abstract, such as human attention, a vivid vision of a firm's future operations and role in the economy, liquidity, etc.

On the flip side, I have understood a (broadly speaking) socialist approach to economics to rest on the notion that a resource distribution is fair in light of how closely it correlates the resources an individual or firm receives to his/her/its need for such resources. For example, August Becker described "From each according to his ability, to each according to his needs" as "the basic principle of communism."

However, in order to ground normative claims related to the bourgeoisie/proletariat distinction, perhaps most notably the claim that the hierarchies they form and occupy in a capitalist economy are fundamentally unjust, socialists seem to make frequent use of the former notion of fairness, perhaps merely failing to recognize some of the categories listed above as legitimate value (claiming that CEOs, landlords, securities traders, etc., "contribute nothing to society"), but generally recognizing at least labor, goods, and services as legitimate things to correlate to the acquisition of economic resources. Whether or not you think this is a narrow minded analysis of what contributes to society, at the least it is an attempt to correlate resource distribution with contribution to society, as opposed to with need. Thus I am confused as to what notion of fairness a socialist economic theory actually rests upon.

Obviously, pretty much everyone agrees that a fair resource distribution is not automatically a good resource distribution. No one getting any resources is presumably fair, but not very good. The goodness of a resource distribution is thus a multivariable function of its fairness and some other consideration(s).

Does the socialist fundamentally disagree with the capitalist about what constitutes a fair resource distribution, or is the foundational notion of fairness agreed upon, with the socialist merely giving less weight than the capitalist to fairness relative to the other considerations that factor into crafting a viable resource distribution model?

Answer 1

The fundamental principle of 'fairness' in Liberal society (for better or worse) is that a man should own that which he invests labor in. That goes straight back to John Locke in his "Two Treatises of Government". Locke was trying to establish property as a 'natural' right of human beings, such that unjustly removing property from someone was as morally objectionable as unjustly cutting off one of his limbs. The investment of labor was the lynchpin of the argument: in Locke's view, natural resources were free (and practically boundless), but the act of finding, extracting, and preparing the resource confers (inviolable) ownership on the one exerts those efforts.

Early — pre 19th century — Liberalism was geared towards the promotion and protection of what we would probably call these days the upper middle class. By that I mean merchants, traders, financiers, colonists, ship owners, early industrialists... Anyone with either a certain amount of wealth or property, or the means to acquire such, and who were thus subject to taxation and expropriation by the aristocracy at the aristocracy's whim. 'Fairness' in this context was predicated on freedom of wealthy, industrious commoners to retain what they have earned for themselves against the depredations of entitled nobles.

That being said, by the mid-19th century the power of the aristocracy had waned significantly, while this wealthy 'upper middle class' (hereafter the 'capitalist class') gained in power and status. At that point a number of theorists — culminating eventually in Marx's work — started pointing out that those rights specified in Liberal philosophies which had brought capitalists out of the shadow of the aristocracy and into power, were now being denied to the laboring classes. In brief, they noticed that someone who (say) works in a coal mine ought to get a share of the value of coal the mine produces proportional to the labor he has invested in mining, which he could then sell at market value. But instead, the miner invests labor, while receiving a paycheck worth only a fraction of what his labor produced. The mine-owner takes the entire output of the mine on the pretense that it is all a product of his own labor, and sells it for his own profit. The capitalist class effectively takes over the role of the old aristocracy: where the aristocracy exploited the labor of the wealthy commoners by taxing and expropriating their wealth, the capitalist class exploits the labor of poor commoners by taking the entire product of their labor and returning a pittance in the form of a wage. 'Fairness' in this socialist/Marxist frame, then, was predicated on the freedom of laborers to retain what they have rightfully earned as (inviolable) property through their labor.

So throughout the Liberal era, 'fairness' has always been judged by the rights of a man to properly enjoy the fruits of his own labor. All that changed over time was the issue of who was being unjustly expropriated. Marxists and capitalists do not disagree on the fundamentals of the matter; both Marxism and Capitalism are theories within the Liberal spectrum of philosophy. The disagreement is over which people have (inviolable) ownership over goods that are produced collectively. And that issue is nowhere near as black and white as either side tends to make it. A factory needs both owners and workers or it will never produce anything. The owners can rightly be said to invest labor in financing, building, managing, and equipping the factory; the workers can rightly be said to invest labor in making the factory run. The Marxist complaint has always been that capitalists (for a number of historical, social, and practical reasons) take too much for themselves.

Answer 2

Does the socialist fundamentally disagree with the capitalist about what constitutes a fair resource distribution

This is a somewhat bad, black and white framing. I dare say there's no such thing as capitalist ideology, although I suppose if you take some "laissez faire" adherents, you could get such a dichotomy.

On the other hand you can find plenty of "left wing" economists who aren't exactly socialist (in the sense of Marxist), but who do worry about inequality and don't subscribe to "laissez faire". The typical criticism you find from them is something like the words of Amartya Sen:

An economy can be optimal in this [Pareto] sense even when some people are rolling in luxury and others are near starvation as long as the starvers cannot be made better off without cutting into the pleasures of the rich. If preventing the burning of Rome would have made Emperor Nero feel worse off, then letting him burn Rome would have been Pareto-optimal. In short, a society or an economy can be Pareto-­optimal and still be perfectly disgusting.

Piketty expressed similar views, albeit in less flamboyant terms

many allocations are Pareto-optimal, [but] some of them violate any reasonable view of equity; for example, the lassez-faire market equilibrium [...]

Or as Varian put it:

when Nozick describes a laissez-faire world, in which each agent is paid his "marginal product," and asks what is the role of a theory of justice here (pp. 82-83) we can well answer: in the determination of the initial endowment--for the market equilibrium is completely indeterminate until it has been specified who owns what in the beginning. [...]

Thus the laissez-faire economy described above generally will operate in an efficient manner; however, there is no other ethical content to this result. If, for example, the initial endowment gives one agent everything, the market equilibrium from this endowment will also give this agent everything. There is nothing just about that.

[...] when Nozick says, "From each as they choose, to each as they are chosen," we might well reply, "Fine, but how are the initial endowments of agents to be determined?"

(Emphasis in original.) Varian develops a more elaborate notion of wealth-fair allocation.

Answer 3

I think it is necessary to distinguish some points. Mostly definitions. They are somewhat simplified to show how they are applicable here. Capitalism: An economic system where those with money/material resources, called capital, control the means of production, the tools used to create things. Socialism: An economic system where the means of production are controlled by those who use them. Communism: A classless, stateless, moneyless society with the means of production owned by everyone.

I bring this up because socialism and communism are often conflated, including in the question, to a degree. Whilst many communists argue in favour of socialism as a transitory position, many socialists do not want communism. The reasons vary, some criticise it based off of moral critiques, some like the idea but consider it utopian and dangerous to attempt.

The quote about "to each, fom each" is specifically referring to what Marx called a "higher form" of communism, that is, one fully distinct from socialism where, thanks to advances in technology, the need for physical labour would be no more. Whether or not this is logistically possible, it is certainly very utopian. Marx claimed that in this society, people would still work, but for the benefit of society rather than themselves, and since work would then be a "creative and pleasurable" activity. The "according to his ability" part of the quote refers not, or at least not only, to working hard, but to working in such a way as to use ones full talent for the good of the community.

So with all that, we can actually draw three different ideas for fairness of distribution, in line with each of the economic systems. To call a capitalist system fair, one can say that resources should be distributed in line with wealth. If we are being cheeky, we could say that this means resources are distributed according to resources. Note that most advocates of capitalism would resent this formulation, but it is the one that most justifies capitalism. To call a socialist system fair, one can claim that wealth belonging to those who make it is fair and means belonging to those who use them is fair. This conceptualisation also has a couple of problems, as, at some point, means would likely have to be siezed or bought, and it relies on the definition of what socialism is "supposed" to be, not really applying to all, or indeed any, country that has called itself socialist. To call a communist society fair, again by the theoretical definition striven for, rather than those who have declared their country communist, fair would mean that all peoples needs are met, and everyone does what they can to meet everyones needs. This would mean some people giving vastly more than they get in absolute terms, however in proportion of need and skill, they would be equal.

Tl;dr: socialism is distinct from communism, but capitalism, socialism and communism can all be justified by different ideas of fairness.