Justice and innovation – towards principles for creating a fair space for innovation

Abstract

Innovation plays an ambivalent yet important role in modern society. A general conception of innovation, based on research in innovation studies from economics and sociology, specifies this role not just as a matter of entrepreneurs in pursuit of private gain in markets, but rather in terms of a network of actors who carry out a new idea. Via a critical discussion of Rawls’ theory of justice as fairness that addresses its shortcomings with a view to the non-economic dimension of innovation, this paper identifies the double role innovation plays for justice: to contribute to the long-term stability of society and to find ideas that specifically improve the benefits for the least advantaged in the present. Within this framework, a principle of contribution taking into account both the input of entrepreneurs and of investors should orient the process, not least so as to reduce the inegalitarian tendencies of the innovation process and to create funds for justice investments.

Keywords:

• innovation
• justice
• Rawls
• social innovation
• inequality
• political economy

Innovations are not ‘good’ tout court. While the everyday use of innovation carries a positive connotation, it is clear that some innovations may contribute to the justice of society, others may be detrimental, and many may have an ambivalent impact.¹

There is not only this evaluative difficulty, there is also a practical difficulty of thinking about innovation: it is demanding to think about change and often more convenient to resist a change in practices. If we worry that the wind parks of renewable energy production damage our landscape, do we also notice the roads we travel on? Cars and their infrastructure were at some point mere thoughts and possibilities; today, they are practically everywhere around the globe. Thus, even if our current practices are based on past innovation, this does not mean that many of us endorse current innovations that require a change in habit and with it possibly a change in the distribution of power.²

Even though we live in ‘innovation societies’ and even ‘innovation unions’, many innovations appear to be merely pseudo-innovations. More of the same stuff, just slightly altered, differently labelled; or maybe even the old stuff with less quality.³ In this case, innovation is a pseudo-discourse, a rhetoric of the new that does not change the status quo. This dynamic matters, especially if the structure that enables it is unjust, if it increases inequality or if society is facing challenges to which it ought to respond, but does not due to an excessive focus on pseudo-change. Pseudo-innovation is then a serious, missed opportunity to engage and foster innovations that are needed. Such a concern clearly presupposes a normative perspective. To reframe this point as a question about ideas and their genesis: are some ideas blocked, not given a chance even though their potential for justice is large (and all this amidst a discourse of innovation)?

Innovation discourse tends to centre on winners, focusing on those ideas that reproduce, survive and ‘succeed’. The selection of reproduction and survival in part depends on structure, on the institutions and ways of thinking that shape individual life prospects; yet, in our actions, we reproduce, shape and sometimes change these institutions. Accordingly, from a perspective of justice, special attention is needed to include all innovations of relevance for justice in this selection process and to ensure that the process works in such a way that it promotes justice or at least does not increase injustice. Thus, there is an epistemic–ethical challenge to conceptualize innovation in such a way that ideas are not arbitrarily excluded from the outset or blocked in the process.

Practically, we can formulate this as the challenge of creating a fair space for innovation.⁴ The normative status of this challenge is secondary, in the sense in which efficiency is a secondary normative principle in theories of justice. It presupposes prior normative principles, values or goals; only by taking for granted these presuppositions can we evaluate whether one way of doing things is more efficient than another one.⁵ Likewise, a fair space for innovation calls for a normative discussion to evaluate the implicit claim that innovation is good, that it is unfair to block one idea and promote another, and so on.

This paper approaches this challenge via a leading conception of justice in the post-Second World War period – John Rawls’ theory of justice as fairness. His theory articulates especially well a conception of justice, which in the post-war period pointed capitalistic states to a more ‘liberal’ (in the American sense) or ‘social democratic’ (in the European sense) direction (Nagel 2002). With his emphasis on the benefit of cooperation for those least advantaged, Rawls includes a distinct perspective of distributive justice as part of his theory: evaluate the basic structure of society and its main societal institutions with a view to their impact on the income and wealth of the economically least advantaged (Rawls 1999, 81–86). In the background of this conception, we must pay attention to a distinct modern gamble: the idea that economic growth, thanks to innovation, powers progress and benefits the least advantaged, now and in the long run. Put differently, that this modern economic process and the innovations that fuel it can be tamed and rendered just. It is not least for this reason that Rawls’ perspective needs to be critically revisited.

There is much to learn from this theory of justice for the ethical analysis of innovation, but only if we critically adapt the theory and the way it draws on economic theory to our time. Such collaborative work on innovation specifically requires a focus on the economy and on innovation not as a black box but as a justice-relevant process. In liberalism, there is a tendency to treat economic production as given, and focus on the redistribution of production for matters of distributive justice (Herzog and Honneth 2014, 360). Yet, in this way, ideas about ‘economy’ and ‘innovation’ are easily taken for granted or even remain unnoticed in the background of theorizing. According to historian Jill Lepore, ‘in its modern usage, innovation is the idea of progress jammed into a criticism-proof jack-in-the-box’ (2014). This paper hence seeks to move beyond the black box, to first disentangle and then balance our ideas about justice with what we know about innovation. It will be argued that in contrast to the economic image drawn on by Rawls, the innovation process is bigger, differently structured, and relevant for justice beyond a focus on monetary gains to be redistributed. Once this is realized, innovation for justice points to more rather than less equality, as well as a two-fold innovation focus – on improvement for the least advantaged today as well as the long-term stability of society.

Section one introduces Rawls’ framework and the role of innovation in the background of his theory of distributive justice. It also begins the critique of an inadequate economic image of innovation focused on incentives, entrepreneurs and their private gains in markets. Section two, drawing on recent work in innovation studies, further extends this critique and establishes the active role of various actors, especially the state, in the innovation process. This surfaces a justice-contribution argument, which highlights the state's double role of public investment in innovations as well as supporting the preconditions of innovation, and accordingly brings up the question of public reward. In terms of Rawls’ theory, the focus on innovation is further specified: innovation for the least advantaged in the present, as well as innovation for long-term stability. Having established this social focus, section three focuses on the possibilities of the just state to engage in such a process of innovation, and highlights the role of equality and the fair value of political liberty for this process. Section four adds a final aspect to the critical examination of the innovation process: the focus on innovation for markets brackets social innovations even though social innovation – in terms of changes to rules, norms and cognitive frames with a view to improved social practices – has accompanied the history of the nation states and its markets from the beginning.⁶ The final section concludes and brings together the various strands of this perspective of justice for creating a fair space for innovation.

1. Justice and innovation – the Rawlsian framework

Political philosophers have developed proposals for specific innovative instruments. A well-known example is the idea of a global health impact fund to improve the research for and access to medical treatment for those who need it most.⁷ Moreover, philosophers have scrutinized instruments such as intellectual property (Gosseries 2010). Nonetheless, there does not yet seem to be a discussion of justice in relation to innovation in general.

To be sure, the concepts of entrepreneurship and innovation emerge in major streams of political philosophy. In the Marxist tradition, technological innovation is a driver of progress imposed by capitalist markets, at least up to a certain level of material wealth (Cohen 2001). From a communitarian-pluralist perspective, Walzer discusses the risks associated with business and entrepreneurship as part of a market sphere with its own mores, which in his view should not be subjected to too much control (1983). The possibilities of control and redistribution are more pronounced in the liberal egalitarian tradition. In his theory of justice, Rawls draws on entrepreneurship and innovation as a process for increased wealth production that can be redistributed to those least advantaged (1999). The respective emphasis in these discussions differs according to the philosophical perspective. However, a focus on innovation and entrepreneurship as part of the market process⁸ generally prevails; this process, as far as innovation is concerned, tends to be treated as a given rather than as a topic for ethical analysis.

In this section, I focus in more detail on Rawls because his theory is a leading contribution to the contemporary theory of justice, and its conception of justice as fairness promises conceptual resources for analysing the idea of a fair space for innovation. I also take it to articulate a perspective on the role of innovation for growth and redistribution in society that is frequently expressed by politicians and the general public: Why not focus on creating a larger pie that would promise larger pieces for everyone?⁹

According to Rawls’ theory of distributive justice, economic inequality is justified if it is to the greatest benefit of those least advantaged in terms of income and wealth. This distributive point is part of a concern with what Rawls calls the basic structure of society, that is, the main political and social institutions and the way they impact on the life prospects of individuals (2001, 4). With his emphasis on the main social institutions, Rawls’ highlights the pervasive role of political and economic cooperation in the industrialized (and post-industrialized) nation state in most aspects of individual life, the opportunity of individuals, and hence the advantage of some and disadvantage of others.¹⁰

Justice, according to Rawls, can be conceptualized as the idea of social cooperation according to ‘publicly recognized rules and procedures, which those cooperating accept as appropriate to regulate their conduct’ (2001, 6). This idea of cooperation includes fairness as an equality-based reciprocity (Wenar 2013). Every person is to have an equal right to the most extensive basic liberties compatible with a similar liberty for others as well as a principle of equality of opportunity in the sense of positions and offices open to all. With a view to economic inequality, the theory permits inequalities only if they ‘are good for all, and particularly for the worst-off’ (Wenar 2013). According to Rawls’ difference principle, social and economic inequalities are ‘to be to the greatest benefit for the least advantaged members of society’ (2001, 43). The first two principles are lexically prior to the difference principle.¹¹

The difference principle has been subject to much discussion and criticism, including from a purely normative perspective (Cohen 2008). The focus here is on something that has received much less scrutiny,¹² the image of economy and society that suggests the non-zero sum way of asking the question as a relevant and plausible question to deal with (i.e. as opposed to a society with a fixed size of the ‘pie’ where this dynamic question does not arise). From a long-term perspective, the question of social cooperation has been relevant at least since the Holocene, that is, the last global warming period that started approximately 11,000 years ago, and the agricultural revolution for which it provided an environment. Yet, economists track economic growth as a significant dynamic only going back the last 500–300 years.¹³ Accordingly, it is a modern, relatively recent phenomenon linked to industrialization and the nation state. Geologists and climatologists discuss this modern dynamic in terms of a putative, new geological era, the Anthropocene (Crutzen 2002), associated with high risks to the long-term survival of the human species and other species (Steffen et al. 2015). Thus, this dynamic is not only relatively recent, it is also high risk and high impact; it is not just a thought experiment of thinking about what if A has more than B.

This dynamic, however, is relatively hidden in Rawls’ theory as a more or less taken-for-granted image of modernization. ‘Modernization’ refers to the cluster of ideas that understands itself in terms of a progress of the modern in comparison to the ancient and traditional, and which requires social institutions of nations states and markets to unfold their universal potential for justice within states and between states (Pieterse 2010). A crucial aspect (or stage) of modernization is industrialization, understood to provide the wealth necessary for stable modern societies (while all others then are ‘under-developed' in comparison). In Rawls’ theory, this idea comes to view in the theory of intergenerational justice. He proposes a two-stage model of justice. In the first stage, society has to accumulate and save so that ‘just institutions are firmly established and all the basic liberties effectively realized’ (Rawls 1999, 255). The goal is ‘capital accumulation and raising the standard of civilization and culture’ (Rawls 1999, 253).¹⁴ In stage two, the ‘net accumulation asked for falls to zero’; there only have to be sufficient savings for the just institutions to be maintained (Rawls 1999, 255). In short, this is a distinctly modern picture. It is also a heroic modern picture as Rawls entertains the possibility of net accumulation falling to zero and even hints at the advantage of such a society (Rawls 1999, 257–258; 2001, 63–64); yet, we do not know of any historical society so far that has entered the process of economic growth and decided to stop it at some point by design and choice.¹⁵

The possibility of such a stop or stationary state is prima facie countervailed by Rawls’ introduction of the difference principle and with it the prospect of ever-greater wealth. Rawls proposes the following image:

the greater expectations allowed to entrepreneurs encourages them to do things which raise the prospects of the labouring class. Their better prospect acts as an incentive to make the economic process more efficient and to trigger a fast process of innovations. (1999, 68)

Evidently, this draws on economics – from the classic Schumpeterian concern with an increase in total output and a raising standard of living (Schumpeter 1942) to the standard economics emphasis on economic growth – which emphasizes the role of entrepreneurship and innovation as drivers of the technological progress that enable economic growth in the long run (Mankiw 2000, 115). We need to zoom in more closely to this significant but frequently taken-for-granted dynamic in the background of the theory of justice.

In the quote above, Rawls draws on a psychological incentive argument: personal gain (better prospects) is required to motivate entrepreneurs. The links between access to resources, incentives and entrepreneurial action may seem like a common-sense thesis; however, a more detailed look suggests otherwise.

1. Incentives: The sociology of entrepreneurship suggests that there is no simple link between motivation and monetary incentive (Swedberg 2000). There are many possible motivations, monetary gain being just one of them. Especially for major innovations based on new scientific insights and technical breakthroughs, the personal motivation is just one element of a much larger innovation system including research institutes, public and private investors and firms.¹⁶ This is a main lesson from the study of national innovation systems (Fagerberg, Martin, and Andersen 2013).

2. Impact: Justice demands comprehensive attention to the impact of innovations. While innovation research has long had a reductive monetary focus (Hübner and Jahnes 1992), major innovations impact social and ecological aspects of life in manifold ways. This impact may be beneficial or harmful, or a mixture of both. Large dams may have improved the energy supply, yet have high social costs (e.g. forced eviction) and high ecological costs (e.g. destruction of habitats). Therefore, innovations are not merely a matter of monetary gains to be redistributed as the image above suggests. They are also about non-monetary benefits, and about harms to be compensated, dealt with or prevented in the first place. This also has implications for the currency of equality and inequality (Cohen 1989). Rawls’ focus on primary goods of income and wealth for distributive justice evaluation is a very restricted vocabulary for the assessment of impact. An alternative currency to evaluation that explicitly takes heterogeneous human beings and doings into account, such as the capabilities approach, seems more suitable as an ethical language to talk about impacts (see Nussbaum 2000; Sen 2009). This case is even stronger if the long-term dimension of environmental sustainability is also taken into account (Holland 2008; Ziegler et al. 2014). It may correct the metaphor of a growing pie in favour of a more nuanced view of benefits, losses and difficult transitions regarding health, education, community, and so on, which are no small issues in a world with annual reports of resource use overshooting ecological carrying capacity.

3. Process: Beyond outputs and outcomes, there is also the process. The inclusion of a dynamic innovation process calls for a consideration of the intended and unintended consequences of this process. This is a matter of dealing with the impacts of innovations ex ante, or with the unexpected consequences during the process. To continue the metaphor, the very way the pie is made, the way in which ingredients are made available and recombined, is of intrinsic and not just instrumental importance. With a view to women, Martha Nussbaum remarks: ‘women don't just want a piece of the pie; they want to choose its flavour themselves and to know how to make it themselves’ (Nussbaum 2000, 67). The making of the pie is also an expression of human creativity, and participation in the making contributes to producing what the participants need. Thus there is a specific instrumental and constitutive role of human involvement here in parallel to the general constitutive and instrumental role of central human capabilities (Sen 1999).

It follows from these observations that we need to pay more attention to the underlying economic image. The introduction of inequality turns out to raise many significant questions that go beyond the difference principle; moving beyond the indirect focus on innovation producing benefits in the market that then can be redistributed brings us towards a direct focus on innovation and justice.

2. The old myth of the bureaucratic state

Economist Mariana Mazzucato has brought attention to a widely shared perception, on the one hand, of a bureaucratic and risk-averse state and, on the other hand, of the heroic entrepreneur (Steve Jobs), who ‘out of the garage’ comes up with radical new innovations that seemingly ex nihilo – from nothing but the genius of the entrepreneur – create new products and services with massive long-term benefits for society (Mazzucato 2013a). In this perception, government's key responsibility is to ‘cut red tape’ and provide better incentives for entrepreneurs in the form of subsidies, tax exemptions, and so on.

This incentive picture fits well with the image we encountered in the last section. However, as Mazzucato points out, the reality of innovation in industrialized nations states are historically grown ecosystems: complex interplays of public and private investors, research institutes and companies that together advance innovation. More specifically, her studies of basic technologies and associated societal changes – the Internet and renewable energies – point to the active, entrepreneurial state (Mazzucato 2013a). This state is characterized by the willingness:

1. to adopt a long-term mission, for example, the advancement of communication technologies for military purposes or of renewable energies for energy supply (Mazzucato 2013b, 196);

2. to engage in long-term, risky investments to develop the necessary basic technologies for achieving the goals of the mission (2013a, 144, 177, 202); and to this end;

3. to accompany the spread of these technologies beyond the support of prototypes, with a view to promoting an institutional space for the new technologies (Mazzucato 2013a, 205). The state thus actively seeks to deal with major challenges. It does not support any and every innovation. It adopts a long-term perspective to advance major breakthroughs.

As with Rawls, the primary focus here is on the nation-state and its capacity to create wealth and well-being for its citizens; however, the economic image is very different. Mazzucato debunks the idea of better economic prospects given to entrepreneurs as an incentive to make the economic process more efficient and to trigger a fast process of innovations. The state is not just a last resort in the case of market failure; rather it is an active force in the process of shaping and investing in innovation.

In her discussion, this point is linked to justice in terms of what we can call the just-contribution argument. If the state contributes via its interventions to the process of creating major science-based innovations (such as the Internet or renewable energies), especially if the state thereby takes long-term risks that private actors are unlikely to take – both in terms of willingness and also in terms of capacity – then the state should also ‘reap some of the financial rewards’ from these investments (Mazzucato 2013b, 196–197). This reward sharing – for example, in the form of a ‘golden share’ in patents, which ensures not only rewards but also a say in the further use of the patent (this idea is inspired by Burlamaqui 2012) – could flow into a ‘national investment fund’ (Mazzucato 2013a, 240) that in turn could be used for investments in new technologies.¹⁷

In the background of this just-contribution argument, with its focus on the entrepreneurial state, there is a second-order argument regarding the investment state. Society via its government is not only a mission-driven innovation investor, it is also in the first place the main provider of the enabling conditions of entrepreneurial processes and markets. It provides the infrastructure, education and health systems, and so on that markets draw on.¹⁸ Moreover, it also creates and maintains space for the discussion and reproduction of norms and networks that purely profit-maximizing, self-interested actors cannot create or sustain. Economic sociologist Jens Beckert speaks of a market-enabling Sittlichkeit, in a sense of actions that embody shared values that enable markets (Beckert 2014, 548–554).¹⁹ If society makes investments that create and sustain the possibility of markets, this yields a complementary, second-order just-contribution argument.

These adjustments to the economic image of the innovation process in society yield a correction and a new insight regarding the relation of justice and innovation. First, it corrects the focus on entrepreneurial incentive with a focus on the investor and her returns, and it demonstrates that this is not an internal market dynamic between private investors and private entrepreneurs, who may post-production share the fruits of the process via taxation and social policy. Rather, the process is potentially and practically one that directly involves society via its government as investor as well as public innovator (e.g. via research activities in public-funded universities). Within Rawls’ framework and its principles, we could therefore formulate a second-order principle for innovation: innovation processes are to be arranged in such a way that they distribute the gains from innovation according to contribution.²⁰ In this way, an element of fair process is included in the economic image that is hardly just a matter of theoretical fine-tuning to justice as fairness. As Mazzucato shows with the example of the Apple Corporation, there is a risk that some corporations benefit from much early-stage funding as well as knowledge based on government-funded research. ‘All the technologies that make the iPhone “smart” were government funded: the Internet, GPS, touchscreen display, and even the latest voice-activated SIRI personal assistant’ (Mazzucato 2013b, 196). In spite of all these private benefits, corporations may be successful in significantly reducing their tax bills.²¹ In the extreme, society is doubly failed: it does not receive a direct reward for its contribution, and the main beneficiary successfully evades taxes. This is part of the explanation for the phenomenon of economic growth and increasing inequality (Mazzucato 2013b, 195) – a process that tends to undermine justice as fairness.

Second, the critique of the garage myth is also instructive, as the mission-oriented state is not focused on any and every idea and its equal support. Rather, the focus is on major societal challenges such as the renewable energy transition. Without a doubt, the success of such missions can be particularly important for the long-term stability, and in the green energy case, the sustainability of society. The innovation process here is not a matter of increasing benefits for the least advantaged. It is a matter of maintaining and renewing just institutions with a view to the just-savings principle and future generations. Due to external shocks and unintended or unwanted consequences of the present, even zero-net accumulation does not mean that no changes are required. Arguably, the unease with innovation in innovation society is precisely due to a perception that rather than tackling the real challenges, we may be reproducing too many pseudo-innovations. This long-term focus points to a different level of thinking about innovation. Rather than focusing on the arithmetic of individual contributions and rewards, there is also the societal level of investing in innovation and addressing major challenges (as captured by Mazzucato's idea of a national innovation fund). This fund, unlike the conventional idea of redistributive taxes, need not yield a direct monetary reward for individuals in the form of a dividend or lower taxes etc. Rather, it is used to invest in public challenges and thus in the long-term wealth and stability of a society. It adds a social dimension to innovation. The just-savings principle requires a fund to be able to invest in innovations that may be required to maintain the long-term stability of society. According to the second-order contribution argument, contributions to such an innovation fund can be expected from those who gain from the institutions provided and maintained by society (beneficiary-pays principle) as well as from those who cause harm that undermine it (polluter-pays principle).²²

3. The new myth of the just state

Why should the techno-scientific innovations studied by Mazzucato and others have such a long-term justice impact for future generations as well as for the least advantaged today? Apart from the more general, positive connotation of innovation, an additional reason why this question is rarely asked in this context is due to the involvement of science in innovation. Major changes such as a green energy transition are knowledge intensive. Herein lies a powerful idea of scientific progress. In this view, increasing scientific knowledge has an entirely positive role, which more or less automatically translates into benefits for all (Woodhouse and Sarewitz 2007, 139).

However, scientific research – as with all social practices – is co-shaped by those involved. This has a number of implications for the relation amongst science, technology and inequality:²³

1. Science – as the example of biomedical research demonstrates – frequently focuses on the problems that its researchers are confronted with in their own environments. But the ‘knowledge and innovation wants of the affluent world tend to be quite different from most people living in poor countries’ (Woodhouse and Sarewitz 2007, 140), or for that matter the poor people in their own countries.

2. Research for market innovations will tend to focus on markets with affluent customers, not on the needy who cannot pay.

3. Knowledge-intensive innovation especially benefits those with education and the requisite skills and much less so the uneducated, who may only receive low-wage jobs in an information technology-enabled service sector.

4. The major missions of active states are only ambivalently ‘good’. They require public discussion of the main challenges for the stability and resilience of society, rather than the assumption that it is already known what the problem and the likely solutions are.

5. The ambivalence of innovation is moreover partly due to uncertainty. The various social and environmental impacts of new products and services can be difficult to anticipate and there can be unintended consequences that harm humans or other living beings. Here too, it is reasonable to assume that the least advantaged are more likely to be harmed, as they have less access to information and less power in decision-making.

In light of these reasons, Woodhouse and Sarewitz conclude: ‘New techno-scientific capacities introduced into a non-egalitarian civilization will tend to disproportionately benefit the affluent and powerful’ (142). Yet, Rawls’ theory legitimates inequality prima facie to the extent that it benefits those least advantaged. Further to the principle of contribution introduced in the last section – as a way to contain this inegalitarian tendency – the focus on the innovation process moreover suggests to break free from the indirect and monetary focus of the contribution principle and to actively focus on purpose in the innovation process.²⁴ Three interlinked aspects of this challenge can be distinguished: goal specification, transparency and participation, and equality as a background condition.

First, the concern with innovation for those least advantaged naturally suggests pro-poor innovation policies, that is, policies that specifically ask innovators to develop products and services to improve the well-being of those least advantaged (Cozzens 2007; Woodhouse and Sarewitz 2007).

Second, innovation from a justice perspective calls for more transparency regarding our insufficient knowledge regarding the implications of innovation for those least advantaged – and thus puts into question general legitimations of science as promoting societal progress. Accordingly, society needs to anticipate the impacts of innovation (Owen et al. 2014, 38) and it again needs to reflect on the goals of innovation, not just what should not be done, but also what should be done (Owen et al. 2014, 29). Once we have noted the bias of scientists and innovators, who – like everyone else – have a societal problem focus drawing on their own life experiences, the need for broad or inclusive participation in goal discussion and impact assessment and evaluation follows (Cozzens 2007, 91).²⁵ This process should include a response to problems and challenges that only become apparent in the process of innovation (Owen et al. 2014, 38). These transparency and participatory requirements might slow down the pace of change, but if the reason for the slowdown is greater consideration of the goals and impacts of innovation with a view to improving benefits to the least advantaged, then the slowdown in such cases is part of innovation for justice (Woodhouse and Sarewitz 2007, 147).

Third, in the background of both points just raised, there is the issue of inequality. The unintended consequences of innovation on the poor are stronger in unequal societies; likewise, inclusive participation is harder to achieve in such societies. As Cozzens suggests, Rawls’ legitimation of inequality may produce an ‘inclusive utilitarianism’, her term for a society that seems roughly fair in Rawlsian terms, but exhibits a strong tendency towards inequality (2007, 90f) – that is, a tendency that undermines the process adjustment just outlined.

However, her assessment needs to be reconsidered in light of the prior liberty principle. Equal liberties require a variety of devices to ensure what Rawls’ calls the fair value of political liberties (Rawls 1999, 197). Liberty is not just a matter of formal rights; everyone is to have a roughly equal chance to participate in politics (Rawls 2001, 44). Yet, what is the scope of politics? Economic inequality threatens the equal value to participate in politics, for example, as far as party politics and elections are concerned. Already for this reason, economic inequality has justice limits. In addition, if we open the economic black box and consider the economy not only as something with monetary output but also as a process, we note that political liberty also pertains to this process. What kind of innovations are pursued or blocked, adapted or scaled is a matter of discussion and decisions.²⁶ If justice as fairness requires us to specifically consider those least advantaged, we are accordingly driven to participation in the innovation process and with it, the challenge of sufficiently equal preconditions to make this possible. Accordingly, there are liberty reasons to restrict inequality to the extent that it undermines a fair say in the discussion of the innovation process.

4. From inclusive growth to inclusive innovation

This discussion so far has not yet explicitly reconsidered the focus on innovation for markets in the established image. With the political economy critique of the conventional perception of innovation, the role of the ‘active state’ becomes visible, yet there remains a narrow, problematic focus on innovation. In addition to the economic discussion of innovations, there is also the sociological perspective on social innovations (Zapf 1989; Heiskala 2007; Howaldt, Kopp, and Schwarz 2014). Social innovation is a variant of innovation that also requires relative novelty, putting ideas into practice and to this end, actor networks; however, social innovation is specifically focused on the change of norms, regulations and cognitive frames with a view to improved social practices. Social innovation is thus very relevant for justice. Changes in rules, norms and cognitive spaces can potentially deal with issues related to the liberty principle, for example, innovations in communications technology that make representatives more accountable.²⁷ Such innovations can also help to meet the social minimum, because meeting basic needs is just as much a matter of norms and rules that prevent social exclusion and marginalization as it is a matter of income.²⁸ Last but not least, with a view to the just-savings principle, it is commonly known that sustainability transitions cannot be achieved only with more efficient technologies and market innovations, but that technological change needs to be accompanied by changes in rules, norms and cognitive frames concerning nature and wealth (sufficiency not just efficiency).

In parallel to the consideration of creating fair space for innovations in markets (to the benefit of those least advantaged), social innovation also requires resources and institutional space. The space creation – and the mission-oriented state – is a demanding challenge precisely because the issues here are changes in rules, norms and cognitive frames and are thus most likely a challenge to (a part) of the dominant order. The following excursus illustrates this point with a paradigmatic example of modernization: water dams.

4.1. Excursus: innovation and water management

Geographers and political scientists speak of a hydraulic mission in twentieth-century water management (see among others Reisner, 1986; Allan, 2001). This entailed the construction of significant hydraulic infrastructure to capture as much water as possible for human use and economic development. The mission held that water, as nature in general, should be conquered for the sake of progress. The hydraulic mission entailed well-known innovations: irrigation systems were developed for very large areas and large dams were built for flood prevention, energy supply and drinking water provision. Indian Prime Minister Nehru even spoke of the large dams as the ‘temples of modern India’ (Conca 2006). The hydraulic mission also had intended and unintended environmental and social consequences. For example, large dams have a heavy footprint on the natural environment and often displace large numbers of people, sometimes disrupting traditional societies. ‘The World Commission on Dams estimated that 40–80 million people have been relocated to make way for dam construction projects around the world, often with no compensation or voice in the process’ (Conca 2006, 168).

Against this background, consider a stylized example. In country X, the hydraulic mission has powerfully shaped water management. Government has financed and regulated the construction of large dams for energy supply, flood prevention and drinking water provision. The introduction of large dams is an innovation in the name of progress, linked to the prestige of engineering feats and national glory, the growth of large organizations building and maintaining the dams, and teaching and research on these topics at universities. The innovation has positive impacts such as energy production for industry, drinking water provision for growing cities and flood prevention. There are also impacts that have come to be perceived as problematic. The change in water management is accompanied by soil erosion and further detrimental environmental impacts. Once the best sites for large dams have been identified, it is increasingly difficult to find suitable sites. In line with the growth of citizens’ initiatives worldwide, civic disagreement is increasingly vocal with powerful protests against forced evictions and habitat destruction (Khagram 2004).

Now suppose that in such a context, a citizens’ initiative opposes the construction of a large dam for flood prevention and proposes an alternative approach to water management. The initiative proposes decentralized water retention. Its motive is a civic concern with democracy – they are displeased by the top-down decision-making of large-dam building – as well as with social and ecological security. Local water retention, according to the initiative, prevents soil erosion and reduces flood risks, it strengthens the ground water supply and it can produce local jobs. As it is an NGO with not-for-profit interest but still with a practical and in this context novel idea, we can call it a prospective social innovator. The idea has mostly been worked on conceptually (there is a small, grey literature) and there have been a few small pilot projects. In contrast to the large dams, the technology for the new idea seems underdeveloped and it lacks the engineering prestige and national glory of large dam construction (only small dams constructed by local people). There is no powerful organization scaling and maintaining the innovation (like a corps of engineers) or producing research and education. To the contrary, established actors oppose the new idea as a challenge to their way of doing things as it makes little sense to have both a large dam and a system of small water retention in one catchment. The two approaches to water management exhibit very different levels of development and power. One idea is well established (locked-in); the other is a fringe idea frequently ridiculed by the mainstream.

Now imagine in this situation that in the summer before the national election the country experiences the biggest flood problems in recent history, i.e. a problem that the large dams were meant to solve. Following the flood, the government for the first time decides to fund a series of pilot projects advancing the idea of the citizens’ initiative, with prospect for rapid large-scale scaling. Proponents of the established innovation oppose the idea: they fear a loss of resources and their educational outlook makes them sceptical regarding the value of the alternative. They suspect an arbitrary one-off decision motivated by party politics. The citizens’ initiative is delighted: finally, they are given (some) space for their idea. Has the government made a just decision? Has it created a fair(er) space for innovations?

No doubt, in any real context, the answer to such questions depends on contextual information and the art of political judgment. Still, the example illustrates some central points concerning justice and innovation. Many innovations involve technology in relation to improvements in affluent lifestyles and its consumption options, but at least for a subset of innovation, there is a direct link to basic rights and needs, as well as to sustainability. Questions of justice necessarily arise. Moreover, as the water sector illustrates well, for basic needs, the innovation does not have to be in the market; even if it is possible, a market focus is frequently controversial as the focus here is on basic rights and needs. What is called for is an inclusive approach that encompasses ideas that are not necessarily for market development (for-profit), and ideas that are not (yet) fully established innovations. In practice, this will require decisions on resource allocation to create a space for new ideas to be tested and tried out in face of power asymmetries. Without principles for creating a fair space for innovation, such resource allocation decisions are prone to look like party politics (in the example: Is government prior to the election not just demonstrating ‘active government’ to the electorate?).

5. Conclusion

Justice as fairness at first sight focuses on the role of innovation in markets for generating wealth and with it possibilities of redistributing the resulting wealth for the benefit of all, especially those least advantaged. This perspective frames the dynamic in terms of a general concern with the basic structure of society, and the way its institutions advantage some and disadvantage others. Thus, we can ask in a Rawlsian spirit: What are the ethical aspects of creating a fair space for innovation?

Putting this question without bias requires a framing of the innovation process as not just a matter of entrepreneurs in pursuit of private gain in markets but rather more generally in terms of a network of actors who carry out a new idea. This general conception of innovation includes innovation for markets but it also includes new ideas for changing norms, rules and cognitive frames (as associated with social innovation). Both are potentially important for justice (as well as in practice frequently interrelated).

With a view to innovation in this general sense, there is a double role of innovation for justice:

1. to contribute to the long-term stability of society, and thus to find creative responses to societal challenges such as climate change;

2. to find ideas that specifically improve the benefits for the least advantaged in the present.

Specifically, as the liberty principle and a social minimum are a constitutional essential – and probably also the principle of just-savings²⁹ – the practical implication when these principles are not met nor challenged is for society to find creative responses and thus also innovations (in the general sense used here) to deal with these issues. As noted earlier (see footnote 11), this point is relevant beyond justice as fairness, because an overlapping consensus on this kind of basic justice seems feasible.

Within this general picture, a further fairness consideration is noteworthy. Innovation is not just a matter of entrepreneurs but also of investors. In addition, innovation is not just a process between private investors and private entrepreneurs; it includes direct public investment along with indirect ways of creating the preconditions for the innovation process in markets. As a pure exchange mechanism is unlikely – especially not with a view to basic needs, for which there is frequently no market anyway – a principle of contribution that takes into account both the input of entrepreneurs and that of investors should orient the process. The principle would reduce the inegalitarian tendencies of the innovation process and create funds for justice investments.³⁰

The inclusion of non-market innovation further complicates the relation of justice and innovation. Social innovation as a change in rules, norms and cognitive frames calls for a discussion of change that likely requires different tools and considerations from that of innovations in markets. Creating fair space for innovation in the first place is to create a space for this challenge, even if the theoretical and practical implications of this move require much further discussion.

Let me thus conclude with a final question: What is the role of justice as fairness for such further research? According to a first interpretation, innovation is something that needs to be better articulated in justice as fairness. No general change in the theory is required, rather a more integrated focus on innovation may simply better promote the concerns of justice. According to the second interpretation, the theory provides important lessons for creating a fair space of innovation, but it is insufficient on its own for an appropriate account of justice and innovation. Here are three reasons why the second interpretation might be more plausible: First, a differentiated position on innovation changes the economic rationale of thinking about inequality. Instead of giving more to an entrepreneurial class and then redistribute the gains, the focus here shifts to the process of innovation as such. The main driver for the need to deal with and justify inequality (the prospect of a larger pie for all) is replaced by a complex concern with what could be called the architecture of creating a fair space for innovation. Second, at the level of meta-ethics (and meta-economics), the focus on fair space for innovation (rather than growth and its redistribution) implies a shift from (reflective) equilibrium and its concern with stability to a perspective of fairly and proactively dealing with a process. These innovations will have to be evaluated for their impact on humans and their environments. Recalling the example of large dams and their alternatives, such evaluation does not seem to be properly conceptualized as a matter of income and wealth, that is, the Rawlsian primary goods. Rather, there is a heterogeneous impact on income and also on the environment, on health, on sense of place, and so on. Third, which of these impacts are particularly important, and how they are to be weighted, is no doubt controversial and calls for evaluative discussion. The Rawlsian metric of primary goods is limited for this purpose; the capabilities approach with its heterogeneous account of goods and capabilities (Nussbaum 2006; Sen 2009) may provide a more satisfactory conception for this aspect of the challenge. In fact, in his discussion of the fair value of liberty, Rawls is driven into a direction of capability – not the formal right, but the worth of the right for the individual. For these reasons, I think that what is required in the end is a shift in the style of thinking – but not without taking on board the important lessons of justice as fairness.

Acknowledgements

This paper has benefited from presentations at the Responsible Innovation Conference in The Hague, the Centre de recherche en éthique of the Université de Montréal and at the University of Greifswald, as well as from joint research on social entrepreneurship and social innovation with my colleagues from GETIDOS and CRESSI. In addition, I have benefitted from written comments by Peter Dietsch and Amelia Pope, as well as generous feedback from two anonymous referees.

Notes on contributor

Rafael Ziegler studied philosophy and economics at the London School of Economics and at McGill University. He has worked as a lecturer at McGill University, ECLA, and FU Berlin, and as a deputy professor for environmental ethics in Greifswald. Since 2009, he is head of research of GETIDOS (Getting things done sustainably), a research group at the University of Greifswald and the IÖW Berlin devoted to research on social entrepreneurship and innovation (www.getidos).

ORCID

Rafael Ziegler http://orcid.org/0000-0002-7156-7042

Notes

1. In this paper, I draw on a general conception of innovation comprising the following elements: relative novelty, the carrying out of the idea in practice (innovation is not the same as mere thoughts or inventions) and to this end, a network of actors (e.g. investors, research institutes, and firms). This conception draws on chapter 2 of my book project “Fair space for innovations”. See Fagerberg (2005) for an excellent overview of innovation studies. In practice, innovation is also always associated with societal ideas such as modernization, competitiveness, growth and sustainability. These ideas provide resources for the legitimation of the respective positive connotations and power the expectations and hopes associated with innovation (jobs, national leadership, green growth, etc.). Here, the focus is on innovation from a perspective of justice.

2. A part of this problem is that innovation also tends to require exnovation: not just introducing the new, but also doing away with the old (innovations). For all issues that address a genuine human need, innovation and exnovation are intrinsically linked because we cannot just exnovate the old technology. For example, if you are against nuclear power, you still need some other source of energy provision. Conversely, innovators advocating a new source of energy, ‘green energy’, typically are involved in struggles with ‘old’ energy providers such as coal or nuclear.

3. If, for example, an industry finds it easier to market pseudo-innovations and on this basis pockets monopoly gains from ‘new patents', the social cost of this phenomenon is high. Luc Soete, drawing on work by Calvano, speaks of destructive creation to highlight the possible mismatch between the profit motive and societal goals (Soete 2013).

4. ‘Creating space’ here refers to the effort not to take ‘the economy’ and ‘innovation’ as given, but rather to investigate the evaluative aspects of the innovation process from an ethical perspective. This investigation in turn seeks to provide orientation for practical suggestions of creating a fair space for innovation (e.g. what rules might be needed, what norms conducive, which actors important, etc.). For this, we must work from two ends: the theory of justice and the economic process of innovation. These two ends are entangled in practice; the goal here is to work towards a better understanding of their relation.

5. Jens Beckert makes an intriguing observation in relation to this point: economic principles, such as the focus on efficiency in economics, are themselves subject to historical revision and scrutiny (Beckert 2014). In the terminology of innovation, we can reformulate this historical question as follows: maybe efficiency in the form of a division of labour that Adam Smith put so much focus on was an important innovation of the period of industrialization (I owe this way of framing innovation to Havas 2015). What forms of innovation and thinking about innovation are relevant for our time?

6. Examples are early socialist alternatives to market organizations (such as the cooperative).

7. Accessed August 23, 2013. http://healthimpactfund.com/.

8. ‘Market’ here means exchange relations between buyers and sellers, mediated by monetary prices resulting from a process of supply and demand.

9. There is an overlap here with the perception of the utilitarian approach to innovation that is also frequently perceived in terms of the general idea of a “larger pie” that will benefit all (Cozzens 2007, 87). As is well known, however, the concern with inequality is even less pronounced in the utilitarian framework than in Rawls' approach.

10. As Brian Barry notes, ‘Rawls’ incorporation of this notion of a social structure into the theory represents the coming of age of liberal political philosophy. For the first time, a major figure in the broadly individualist tradition has taken account of the legacy of Marx and Weber’ (quoted in Cohen 2000, 183).

11. It is an important but sometimes overlooked refinement of Rawls' view that the liberty principle is constitutionally guaranteed and in additional also a social minimum to meet the basic needs of all citizens (Rawls 2001, 48). Thus, a sufficientarian, constitutional threshold is built into the theory, independently of the difference principle and the question of relative inequality. This is an important point as these ‘constitutional essentials' (Rawls 2001, 46) are much more widely agreed upon than the difference principle. Therefore, there is a possibility of an overlapping consensus with a view to a basic conception of justice that can be justified from a variety of philosophical and religious perspectives (Nussbaum 2000).

12. For an excellent survey of the complex discussion of the difference principle see van Parijs (2003).

13. See the data of the Maddison project. Last accessed April 9, 2015. http://ourworldindata.org/data/growth-and-distribution-of-prosperity/gdp-growth-over-the-very-long-run/.

14. See Gosseries 2004 for a discussion of the reasons why such accumulation could be required for stable institutions.

15. More recently, this question has appeared as a question of degrowth in response to the global sustainability society, and whether such degrowth is possible by design or by disaster. In the history of political economy, Johan Stuart Mill is the outstanding example to welcome a stationary state as an improvement for society.

16. In a paper that came out after the publication of a theory of justice, Rawls repeats the incentives point but adds that inequality may also be a way to put resources in the hand of those who can make the best social use of them (Rawls 1975). The importance of access to resources is a much less controversial requirement for innovation processes. However, it is logically independent from the notion of economic inequality (e.g. somebody could be given access to resources within a public institution to advance some innovation without any private ownership and private monetary gain involved).

17. But does the state not receive indirect financial reward via the jobs created and taxes paid in the economy? As Mazzucato points out, in a global economy, the indirect reward argument runs into the difficulty that especially large corporations can find many ways of avoiding taxes, and moreover, the creation of jobs is not necessarily linked to the region or country that made the investment (Mazzucato 2013b, 196).

18. There are differences here too: some states clearly fail or poorly deliver in this respect.

19. Moreover, as Beckert notes, this contribution is, strictly speaking, not only enabling but also accompanying (of consumer and producer choices) as well as constraining (what products and services should be available on exchange markets, Beckert 2014).

20. ‘Within’ means within Rawls' framework and hence that this principle is constrained by the just-saving rate, equal liberty, fair equality of opportunity as well as the difference principle.

21. To make matters worse, corporations may even adapt to government expenditures and use the capital that they would have to invest in research and development into purchase of company stocks so as to increase the company value. Mazzucato speaks in this case of a ‘parasitic ecosystem' (2013b, 197f).

22. Partly, this discussion is already taking place in current climate change policy negotiations, and there is much to learn from this discussion of beneficiary pays and polluter pays and adaptation funds for climate change (see Baatz 2013).

23. Here I follow Woodhouse and Sarewitz 2007.

24. The focus is indirect in the sense that the assumption is that entrepreneurs pursuing their private gains will produce benefits “behind their backs” that will benefit society at large via the wealth they produce and the redistribution possibilities thereby created.

25. Cozzens specifically links this point to communitarian policy, but it should be clear that this call also can be motivated via a liberal egalitarian framework once we have properly understood the more than monetary impact of innovation as well as the complex nature of the innovation process.

26. Note that if a social minimum is constitutionally guaranteed to meet basic needs, but if for some groups this minimum and associated needs are not met, then the practical implication of the constitutional requirement is to become innovative in a pro-poor way.

27. See, for example, the social entrepreneurship initiative Abgewordentenwatch, which seeks to make the legislative process more transparent inter alia via the disclosure of the voting record of parliamentarians as well as of their extra earnings (Last accessed April 9, 2015. http://www.abgeordnetenwatch.de/).

28. See, for example, the emergence of so-called neighborhood mothers in European cities: women of a specific cultural background counsel newly arrived immigrants from the same background on matters of health and education and in this way change the cognitive image of social service provision (e.g. Last accessed April 9, 2015. http://www.stadtteilmuetter.de/).

29. Rawls discusses the liberty principle and social minimum as constitutional essentials, but he does not consider the just-saving principle in this context (Rawls 2001, 42–50). On the assumption that the just-savings principle at the societal level is the equivalent to the provision of a social minimum at the personal level, it should also be considered as a constitutional essential. However, in an earlier book, Rawls adds an epistemic criterion of visibility (is it possible to tell whether the principle has been met?), and justifies the exclusion of the difference principle from the constitutional essentials on the ground that it is difficult to tell whether the principle is realized in practice (Rawls 1993, 229). The epistemic criterion might suggest a reason not to include this principle as a constitutional essential due to all the difficulties of anticipating the future. Putting both considerations together could speak in favour of a procedural solution in the form of future chambers or other institutions that are specifically devoted to intergenerational justice but not subject to the short-time horizon of democratic government.

30. Moreover, as noted in section 2, the resources required for innovation do not logically imply a requirement of private ownership and private monetary gain. There is still much space for new ways to provide recognition and incentives for not-for-profit innovation.