Efficiency and justice revisited

At first sight, modern economics and justice seem not to fit together. Whereas the former primarily deals with individual self-interest and extrinsic incentives, the latter deals with other-regardingness and intrinsic social motives. However, recent findings, mainly from the field of experimental economics, reintroduce aspects of justice into economic modeling. Other theories, evolutionary models for instance, take up the key findings and apply the economic rationale in order to find out why human traits which apparently run counter to individual self-interest may have survived. In this introductory note we date this discussion back to the days of Adam Smith and argue that he already set the basis for such a discussion. Apparently, Smith was well aware that principles of justice and the market may, at times, be contradictory. However, he also found that both served a common purpose, or so we will argue. We further aim at bringing together Smith's classical position with recent ideas, for instance Binmore's theory of justice, and see whether the one can be fruitful for the other.