Jörg Althammer

As economics is deeply rooted in classical liberal thought, the term “solidarity” does rarely appear in economic literature. In mainstream economic analysis, this concept is neglected altogether. Moreover, market economies seem to be in stark contrast to this idea not only in theory, but also in practice. Critics blame the market system as being exploitative or at least generating huge and unjustified inequalities in income and wealth.In this paper, we shed a different light on the social impact of market economies. First, we argue that economic interactions have a strong and positive impact on social integration and inclusion. The active participation in the process of social exchange does not only generate the economic means to pursue a self-contained life plan. Being part of the productive and wealth generating part of society is also decisive for a person’s social recognition and self-esteem.Secondly, we elaborate on the conditions economic institutions must fulfill to make social interactions not only mutually beneficial, but also fair. In a system that aims at solidarity, rules and institutions are not only devices to stabilize mutual expectations and to enable interactions on anonymous markets. These rules must also meet the requirement of fairness. Fairness of social interaction is conceptualized as the equality of the initial bargaining situation and a balanced bargaining power. In a society with heterogeneous actors, an unequal distribution of incomes is likely to arise even when the institutional arrangements fully meet the requirements of political solidarity. In this understanding, solidarity is a non-egalitarian, liberal concept. However, liberal market economies and especially the system of international economic cooperation still fall way behind the demands of political solidarity.

Solidarity is a multi-layered concept, the content of which stretches from emphatic altruism over common believes and shared interests to specific political structures. This article reviews different perceptions of social solidarity and discusses their advantages and limitations. Subsequently, I develop a contextual theory of solidarity that extends the idea of mutual aid and cooperation from small and homogenous communities to global societies. It is shown that we do not need another theory to raise the idea of solidarity to a global level, but appropriate political and economic institutions.

This chapter takes up the discussion on individual rights in modern economic theory. Taking Amartya Sen’s well-known impossibility theorem as a starting point, I discuss the various approaches to solve the underlying problem and to reconcile basic liberties with general notions of social welfare and economic efficiency. It is argued that the most promising approach to overcome the liberal paradox is to weight individual positions according to a commonly shared value function. Finally, I want to show that the well-established concept of “natural” basic human rights offers an appropriate way to operationalize this valuation function that is both sufficiently specific and flexible enough for applied ethics.

Refugee and poverty migration is one of the key challenges developed Western societies are facing. Due to the unstable political situation in many parts of the world and the lasting high differences in development between the economies, these migratory movements will continue to increase in the future. In order to channel immigrants, the authors suggest that migrants must pay an entry premium to obtain a permanent right of residence. We criticize this proposal from both an ethical and an economic perspective. We argue that a pricing system is neither ethically legitimate nor economically sensible. In order to meet the chal- lenges of migration, a fundamental change in economic cooperation between developed and less developed economies is more appropriate.