Fairness > equality

by on April 9, 2017 at 2:33 pm in Data Source, Economics, History, Philosophy, Political Science, Uncategorized | Permalink

Here is from a new research paper by Christina Starmans, Mark Sheskin, and Paul Bloom:

…despite appearances to the contrary, there is no evidence that people are bothered by economic inequality itself. Rather, they are bothered by something that is often confounded with inequality: economic unfairness. Drawing upon laboratory studies, cross-cultural research, and experiments with babies and young children, we argue that humans naturally favour fair distributions, not equal ones, and that when fairness and equality clash, people prefer fair inequality over unfair equality.

As I said in a talk at Harvard Business School a few days ago, “if you hear the word “inequality,” the chance that what follows will be wrong is at least 3/4.”

For the pointer I thank Michelle Dawson.

1 Donald Pretari April 9, 2017 at 2:47 pm

One problem I see with this approach is that, while you might be able to put a number to inequality for governmental purposes, meaning to have a way to address a problem however poorly, fairness is a concept too inexact for such uses.

2 Sam Haysom April 9, 2017 at 3:58 pm

That’s the point.

3 derek April 9, 2017 at 6:45 pm

And hence come the corrosive effects of government efforts to ‘fix’ inequality.

4 karl April 9, 2017 at 6:55 pm

Gee, I thought they were the corrosive effects of government efforts to ignore unfairness.

5 GoneWithTheWind April 9, 2017 at 7:10 pm

” humans naturally favour fair distributions”
What about honest? It might be fair to give everyone an equal share of something but is it honest? Is robbing Peter to pay Paul honest? It might be fair from Paul’s point of view and Paul will certainly vote for it. But wouldn’t honesty be a better policy?

6 Art Deco April 9, 2017 at 7:11 pm

fairness is a concept too inexact for such uses.

With ‘equality’, you have either an inexact concept or an exact concept that cannot be implemented on a scale large than an agricultural village. So, how are you better off adopting ‘equality’ as a goal?

7 prior_test2 April 10, 2017 at 12:39 am

Well, your point is clearly proven by the utter failure of the United States of America, founded by those who actually believed these apparently stupid words – ‘We hold these truths to be self-evident: that all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness.’

8 Anon7 April 10, 2017 at 3:36 am

The Declaration refers exclusively to political equality, not economic equality, the topic of the article and discussion. The founders were a lot smarter and wiser than you: “The diversity in the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results.” (Fed.10).

9 Art Deco April 10, 2017 at 6:00 pm

Well, your point is clearly proven by the utter failure of the United States of America, founded by those who actually believed these apparently stupid words – ‘We hold these truths to be self-evident: that all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness.’

Not only did they believe those words, unlike you, they understood to what they were referring. Occidental society was segmented into orders, each with its privileges and obligations: crown, nobility, clergy, burgesses, and peasantry. That declaration states that there is only one order and only one set of privileges and obligations.

10 Donald Pretari April 10, 2017 at 5:13 am

The point is thar for inequality you can find a number such as income to use. You can’t find a number for fairness. Governments need numbers, however iffy, in order to determine benefits. I’m not defending this, just bringing politics into focus.

11 OldCurmudgeon April 10, 2017 at 9:49 am

Even there, is the right number to judge “inequality” economic income? Adjusted taxable income? Net worth? Consumption?
Does it matter that one voluntarily earns less than their potential (e.g., religious workers, stay-at-home parents)?

12 Hazel Meade April 10, 2017 at 12:50 pm

So, this implies that direct redistribution of wealth is a flawed proposition. The government has no knowledge of what wealth distribution is fair, and hence *cannot* make fair decisions about how to redistribute income.

However, as libertarians prefer and have always preferred (and have argued for ad nauseum for 100 years), the government can enforce fair rules and let the income distribution fall where it may. How do you measure the fairness of the rules? Well, you can start with the concept of “equal justice under law” – the rules should treat everyone the same, and then you can look for simplicity – the more general and universal the rules are, the fewer exceptions there are, the more “fair” they are likely to be. There is an intuitive understanding among most people of what sorts of rules are “fair”.

13 Art Deco April 10, 2017 at 6:02 pm

The point is thar for inequality you can find a number such as income to use.

‘Use’ it toward what end? Soviet Russia rapidly abandoned uniform wages. There’s a lesson in their somewhere.

14 Andrew M April 10, 2017 at 7:14 am

Maybe we just haven’t been exploring how to put a number to fairness. It seems hard to assign a number to lots of things – e.g. the value of a human life – but accountants and lawyers do it all the time.

It could be an exciting new area of economic (and psychological) research for the next couple of decades.

15 Hazel Meade April 10, 2017 at 12:57 pm

One could count the number of lines in the legal code and then estimate fairness as the inverse of that.
Generally, the more complicated your laws get the less fair they are likely to be.

16 rayward April 9, 2017 at 3:42 pm

Cowen is right: most views about inequality are wrong. In particular, fairness isn’t the issue; life is unfair. Rather, the issue is whether inequality is an economic problem. Of course, to acknowledge that inequality is an economic problem is to acknowledge that something should be done to mitigate inequality. Don’t hold your breath. The Great Reset, however, will resolve the problem. That’s the beauty of markets: they self-correct problems. But as Cowen states in his book, the self-correction will make many uncomfortable. Did Cowen tell the fine young men and women at Harvard about his prophesy of the Great Reset and what that means to the aspiring leaders of finance? I didn’t think so; he wouldn’t be invited back.

17 Gavin April 9, 2017 at 3:57 pm

We spoke about quite a few things, many from the new book. And we’d be happy to have him back anytime, what a great speaker!

18 rayward April 9, 2017 at 4:11 pm

Absolutely! As I have commented many times, it’s better to read a transcript of what Cowen says than to listen to what Cowen says. “Odysseus returns to Aeaea, where he buries Elpenor and spends one last night with Circe. She describes the obstacles that he will face on his voyage home and tells him how to negotiate them. As he sets sail, Odysseus passes Circe’s counsel on to his men. They approach the island of the lovely Sirens, and Odysseus, as instructed by Circe, plugs his men’s ears with beeswax and has them bind him to the mast of the ship. He alone hears their song flowing forth from the island, promising to reveal the future. The Sirens’ song is so seductive that Odysseus begs to be released from his fetters, but his faithful men only bind him tighter.”

19 Gavin April 9, 2017 at 4:29 pm

I think it’s helpful for folks in places like HBS to reflect on what these trends like complacency and their coming counter-trends mean and what our role could be.

Day after Election Day was tense around here!

20 rayward April 9, 2017 at 4:46 pm

Of course, reflection is what one gets by looking in a mirror: one sees herself in the reflection. And that includes prophesy. I’m hopeful for our future, hopeful because we are blessed with many bright and inquiring minds. I don’t mean to denigrate finance, as innovations in finance (a futures market for rice changed the world) have made life so much better for everyone. On the other hand, the returns from speculation, whether it be in tulips or in advertising platforms, won’t bring progress but despair.

21 Viking April 9, 2017 at 6:41 pm

rayward writes : “As I have commented many times, it’s better to read a transcript of what Cowen says than to listen to what Cowen says.”

Why the vitriol and bitterness? Are you putting Cowen in the same class as Trump and Ms Clinton?

22 rayward April 10, 2017 at 3:02 pm

I greatly admire Cowen. The comment about reading a transcript rather than listening to him is meant as a compliment to his ability as a speaker. He has such a pleasant speaking voice and is so charming that it’s easy to get lost in what he says (the Sirens’ song); thus, the preference for a transcript.

23 Viking April 10, 2017 at 3:34 pm

Makes sense, thanks!

24 Ray Lopez April 9, 2017 at 4:00 pm

Cowen is always right, he’s a chess master. And indeed, it’s fair that rent seekers and other residents in the Washington DC area make up something like 8 out of the ten richest counties in the USA. Speaking for my 1% family (minimum net worth $9M), we think it’s fair that we won the geographic lottery by moving to the still then small DC area in the 1950s, and investing in real estate. We also think it’s fair that people pay all their taxes (we do cheat a little bit on our taxes, but no worse than any other family in the 1%). My family supported Trump (I did not) and don’t think it’s fair to either cut Social Security nor raise taxes (I disagree, but I don’t control that much money), and do support any and all efforts to increase the status and wealth of the Washington DC area. This April 15 I urge all of you to pay your taxes as model citizens. God bless America. (I almost typed an extra ‘l’ after the ‘o’ in that sentence, lol)

25 Floccina April 10, 2017 at 5:55 pm

People think Social Security is fair because they do not know the benefit formula. I bet that if they did most Republicans would be unhappy with how little it is related to how much you paid in and Democrats would be unhappy how much high earners get.

26 Thiago Ribeiro April 9, 2017 at 3:45 pm

“Rather, the issue is whether inequality is an economic problem.”

I doubt Sanders’ folks are chiefly concerned with economic efficiency – in fact, I easily imsgine them trading some efficiency for justice – whatever it may be.

27 Sam Haysom April 9, 2017 at 3:57 pm

Except for the fact that homogenous societies do oppose inequality. In Balkanized societies economic unfairness is just a way for differnt ethnic groups to claim they are being treated unfairly and claim more spoils. In that situation it is a lot more important to control whose wealth is being redistributed to whom rather than to argue over where the wealth cut off is. This is why Carlos Slim a villain in somewhat homogenous Mexico can masquerade as a champion of fairness for Mexicans in the US.

28 The Other Jim April 9, 2017 at 6:25 pm

Thank you for pointing out that “inequality” has been rendered a thoroughly useless and irrelevant word, much like “racism” or “Brazil.”

I’m guessing you’d dare not say so in publication or on NPR. But… baby steps.

29 Thiago Ribeiro April 9, 2017 at 7:00 pm

“Brazil” is not a thoroughly useless and irrelevant word. Quite the opposite, it embodies, stands for, symbolizes human greatness.

“May the shout from the Ipiranga
Be a defiant cry of faith!
Brazil sprang forth already free,
Standing above the purple vestments of royalty.
So then, forward Brazilians!
May we shining harvest green laurels!
May our country be triumphant,
A free land of free brothers!”

30 APFRules April 10, 2017 at 2:15 pm

“A free land of free brothers!””

That sounds a little gay.

31 Bill April 9, 2017 at 7:02 pm

Re inequality:

“Elites over the millennia have devised a variety of ways to control those under their rule. These have included brute force, conscription, tribute, and religious doctrines ordaining social inequalities. New research points to another possible strategy: Making a practice of ritualistically killing members of the lower orders.”

https://www.wsj.com/articles/human-sacrifice-as-a-tool-of-social-control-1490379093

32 So Much For Subtlety April 9, 2017 at 7:13 pm

I would have hardly thought this was news. Surely everyone knew this?

Still the important question is not whether they cut someone’s heart out with an obsidian knife or burn their infant at the shrine to Ba’al. The important question is whether the victims have been selected fairly. If it is a random lottery – as the Phoenician sacrifices may have been – then who can object? If you need to have done something to offend against the norms of polite society – like say the word “niggardly” – then I am sure we would all agree that was fair.

Actually I tend to think this does not matter. If you random kill people because you have a quota – as in Communist systems – then it still seems to work. Stalin, like most Communist mass murderers died peacefully in his own bed. Well, study.

33 Bill April 9, 2017 at 8:02 pm

Yeah, one would have thought that it is obvious that we need inequality of opportunity or initial conditions to preserve the social order for those elites and offspring who wish to maintain their position.

34 anonymous April 9, 2017 at 8:52 pm

But: Irrt euch nicht, God cannot be mocked. Read the first pages of Waugh’s Campion. Let us leave subtlety completely behind. Nobody reaches the very end of their lives thinking how happy they are that they got away with so much evil. They may be thinking of something else – as they may have hoped to be doing in their last moments on earth, when they gave such things a thought in the long ago times before their last days on earth – but they are not wishing, in those last moments, that they had done more evil than they did. You might say, perhaps they did not know they had been doing evil? Well, either you care about other people or you don’t – and if you reach the end of your life not caring about other people, and you have done bad things, you know you have done evil; and if you reach the end of your life caring about other people, and you have done bad things, then you know that you have done bad things, and you wish you hadn’t. Or maybe you die not thinking about anything important, and not having thought about anything important for a significant period of time. Very sad!

35 albatross April 10, 2017 at 8:42 am

I am not convinced about that. If Stalin had any deathbed regrets, I suspect they were probably about political enemies he never got around to purging. Similarly, Ghengis Khan probably thought wistfully of the cities he’d always meant to sack, but never quite got around to.

36 anonymous April 10, 2017 at 10:12 pm

Well, you might be right about what they were thinking. I have known some very unpleasant people but none who did not try to become at least just a little better as they reached old age or the end stages of a fatal illness: but as for Stalin-level tyrants, I have not known any, and I would not be surprised if they failed to try to be just a little bit better as they saw Death approaching. But who knows?

37 Kevin April 9, 2017 at 7:19 pm

This take is too simple. What people value foremost, I think, is their own material welfare, and if this is improving they won’t pay much attention to either inequality (ie. their neighbor having more) or unfairness. This explains why Chinese society became so stable during the two decades after Tiananmen. When people’s welfare isn’t improving, however, that’s when they tend to notice inequality and unfairness (and I don’t think it’s easy to distinguish between these two, because we’re in the world of perception, and people are looking for scapegoats). And if people’s welfare is declining, especially if this involves the risk of real hardship, the tendency of people to see those who are well off as corrupt is heightened.

38 Jon April 9, 2017 at 8:39 pm

Does the rule about what follows being wrong 3/4 of the time apply if Tyler writes it?

39 Dzhaughn April 10, 2017 at 2:58 am

Or maybe 3/4 is much better than average.

40 kaldc April 10, 2017 at 1:16 pm

This. Take any random topic talked about on this blog. What’s the average chance that what’s written about it will be wrong? 3/4 seems pretty good to me.

41 Matt April 9, 2017 at 9:23 pm

Some reasons to doubt the value of the paper here:

http://crookedtimber.org/2017/04/09/the-poverty-of-psychology/

42 Alex April 9, 2017 at 11:41 pm

Thanks, I think I’ll go over and read that whole post

Not

43 Matt April 10, 2017 at 12:02 am

Well, I guess that if a two paragraph post is too much for you, then there’s no arguing about it.

44 TMC April 10, 2017 at 8:46 am

Alex, I went over there for you. You made the right choice. Garbage.

45 A.G.McDowell April 10, 2017 at 12:57 am

That link is a treat for those who have enjoyed Asimov’s “Foundation” and remember it.

In Asimov’s parody of medieval scholasticism, Lord Dorwin describes a suggestion that he go out and gather new data instead of relying on an 800-year old book based on an even older book as “hopelessly wigmawolish”.

The paper under discussion claims “that these two sets of findings can be reconciled
through a surprising empirical claim: when the data are examined
closely, it turns out that there is no evidence that people are actually
concerned with economic inequality at all”.

The response in the link does not trouble with empirical claims at all. It castigates the writers of the original paper for not having read (or rather referenced) enough political philosophy.

46 Art Deco April 10, 2017 at 5:54 pm

In Asimov’s parody of medieval scholasticism, Lord Dorwin describes a suggestion that he go out and gather new data instead of relying on an 800-year old book based on an even older book as “hopelessly wigmawolish”.

If Asimov intended that as a parody of medieval scholasticism, it’s a pretty inept one. Scholastics were engaged in philosophical discourses, not historical inquiries. In the scene to which you’re referring, Lord Dorwin offers a review of literature in lieu of empirical investigation rather than in preparation for empirical investigation. He is not proposing a philosophical enterprise at all. He’s speaking of literature in archaeology. (While we’re at it, Europe wasn’t suffering net losses in techonological knowledge during the High Middle Ages, which is what Asimov portrayed in the earlier chapters of Foundation).

47 Tom T. April 9, 2017 at 9:34 pm

Isn’t this essentially a restatement of “equality of opportunity vs. equality of outcome”?

48 cowboydroid April 10, 2017 at 12:13 am

Fairness goes a step further than “equality of opportunity.” People want what they have worked for, and if they see themselves and everyone else getting what they’ve worked for, even if everyone is working at different levels and thus getting more or less than others, then they percieve fairness.

“Equality of outcome” means everyone gets the same no matter how hard they’ve worked. Nobody actually believes this is a *fair* outcome.

49 prior_test2 April 10, 2017 at 12:42 am

‘“Equality of outcome” means everyone gets the same no matter how hard they’ve worked.’

Which is supposed to be point of the rule of law, in the American framework. This includes, for example, everyone paying their fair share of taxes, of course.

50 TMC April 10, 2017 at 8:50 am

No. rule of law would allow me to get twice as much if I work twice as hard. Fairness would make me twice the taxes, as opposed to our current progressive tax scheme.

51 Art Deco April 10, 2017 at 6:04 pm

‘“Equality of outcome” means everyone gets the same no matter how hard they’ve worked.’

Which is supposed to be point of the rule of law, in the American framework.

Not outside your addled head.

52 Darf Ferrara April 9, 2017 at 10:55 pm

The chance that what follows will be wrong is at least 3/4? Where did you derive that inequality?

53 cowboydroid April 10, 2017 at 12:14 am

From my own observation, it’s probably more like 95/100.

54 albatross April 10, 2017 at 9:08 am

We need to know the base rate–when the lead-in sentence is *not* about inequality, what’s the probability that what follows will be wrong?

55 Alex April 9, 2017 at 11:48 pm

In this paper, “fairness” is defined as getting rewarded proportionate to your work. It seems hard to translate that to real situations. Are high earners using their intelligence to succeed or are they just taking advantage of their position to do things that others could do almost as well given the opportunity? If I know some secret info that allows me to do work worth 10 times as much as some other similarly skilled guy who doesn’t have the info, is that “fair”?

56 cowboydroid April 10, 2017 at 12:17 am

Seriously? You can’t imagine how to translate proportional compensation to real situations?

If you don’t even have an introductory familiarity with market economics, why are you commenting on this blog?

57 albatross April 10, 2017 at 9:05 am

How do you decide whether that’s fair or not?

Suppose we have two worlds:

In world #1, Alice makes twice as much as Bob because she’s a lot smarter, having inherited genes for high intelligence from her parents.

In world #2, Alice makes twice as much as Bob because she’s a lot better-connected, having inherited a title of nobility from her parents.

In both cases, Alice actually adds twice as much to her employer as Bob does–because of being smarter or because her title of nobility opens doors.

Is one of these worlds more fair than the other? And how would we decide which one?

58 Hazel Meade April 10, 2017 at 1:18 pm

World #2 implies a lot more than just Alice’s and Bob’s intrinsic qualities. World #2 implies a social order that contains a hereditary class structure. It is the hereditary class structure embedded in the social order where the unfairness lies, not on the difference in value which Alice’s connections provide to the employer. To correct the unfairness, the government should cease to recognize titles of nobility and repeal any laws which enforce inherited differences in class.

Now, you could probably still have a World #2 in which Alice has been born in a wealthy family and is a lot better connected, but maybe in that world, Bob would have a chance to catch up, since he can always go out and network and get connected, and there’s no guarentee Alice’s connections will remain important in 20 years. There’s also a concern that upper class people would somehow collude to favor insiders, creating a de facto nobility.

I think that if there was sufficient dynamism in the economy you could prevent starting conditions from being too important and rigid classes from forming. You want an economy where rich people have to stay on their toes to preserve their wealth. And where upstarts have a chance to notice a trend and ride it to wealth. You want an economy where complacency doesn’t pay.

59 albatross April 10, 2017 at 5:14 pm

You can think of ways to change the society to make it more fair, but the first question is whether it is unfair in a way that needs changing. Why is it more fair that Alice wins in life because she inherited her brains (or winning personality, or breathtaking beauty) than that Alice wins in life because she inherited her title of nobility (or parents’ connections in the ruling class)? In both cases, Alice gets a benefit she never earned, and Bob gets screwed over for something he never chose. If we think world #2 needs to be changed to become more fair, why doesn’t world #1 also need to be changed to become more fair?

The way this looks to me: There’s a moral argument for respecting differences in outcomes that come down to differences in effort or choices–if someone else saves a lot for retirement and I don’t bother saving anything, it seems unjust (as well as unwise in incentive terms) to take some of their savings to provide for my retirement.

But to the extent that differences in outcomes reflect differences in genes or early childhood environment, that moral argument goes away. There may still be a practical argument for respecting those differences in outcomes (demanding that NASA must stop giving their best jobs to people on the right end of the IQ distribution will probably end badly), but there’s no longer a moral argument against it.

To the extent we think differences in outcomes are driven by stuff nobody chose or could have chosen (genes, upbringing, developmental noise, luck), it’s easier to make a moral case for redistributive policies. This is one reason why I’ve always thought that _The Bell Curve_ was not a book that particularly supported conservative or libertarian policies.

60 Hazel Meade April 10, 2017 at 5:41 pm

I don’t see reward for intelligence as entirely “unearned”, or to be more precise, lacking in merit.
If some people are just more intelligent because they have better brains, that is who they are. You could say the same thing about being blessed with high motivational drive, or with a hard-working attitude. Or being cursed with an addictive personality or with a lack of remorse leading one to psychopathy.
Should we not reward the inclination to work hard either? Because that might be a genetic trait too. Should we not punish people for being psychopaths? Their brains made them do it, so it’s not their fault, is it? If someone can be punished for being a psychopath or rewarded for being hard working, why can they not be rewarded for being born with higher intelligence?

By contrast, being born with a noble title is not intrinsic to the individual, it is an arbitrary social construct. The value exists only because of the way that Alice is privileged within society by the class structure. There is no intrinsic merit to her personality or genes or traits whatsoever.

61 Roger April 10, 2017 at 8:10 pm

Albatross,

If the rules state you get six points for crossing the goal line according to the agreed procedures, then it is fair. If two people decide to split the writing credits even-steven on songs regardless of amount of contribution (Lennon and McCartney), then this is fair. If an employer and group of employees agree to pay 100% on commission sales then it is fair.

I don’t think we can compare theses systems and say which is MORE FAIR. They are all fair, assuming the participants agreed to the rules and had competing possibilities. The more important distinction isn’t fairness but practicality, utility and desirability. Which set of rules and incentives are most likely to achieve optimal results?

The reason it is wise to allow an intelligent person to benefit from their intelligence is because in a reasonable market the intelligent person is applying their intelligence to the creation of value for others. She is being paid to apply and use her intelligence to create, design, review or otherwise improve something for other people. By rewarding her we incentivize her using her skills to benefit fellow man. It is a positive sum process, benefiting her and others. She is creating more value then she costs.

Did she deserve it? According to the rules of the market, of course she did.

Is society better incentivizing people to apply their skills to the benefit of others? Of course. The dystopian world would be the one people convinced themselves that it is unfair or unwise to incentivize people to develop or apply their talents to helping others.

62 OldCurmudgeon April 11, 2017 at 9:48 am

“There’s a moral argument for respecting differences in outcomes that come down to differences in effort or choices…But to the extent that differences in outcomes reflect differences in…early childhood environment”

Even there, there is still volition. To provide that good early child environment, parents need to sacrifice leisure/consumption e.g., spending evenings reading to their child rather than [preferred activity], drive an old car so they can afford access to better schools, etc. Do we punish the parents (and/or their kids) who make those sacrifices in the name of “fairness”?

63 albatross April 11, 2017 at 3:37 pm

Hazel:

Surely, the fellow with the title of nobility in a society where everyone wants to meet a child of the House of Windsor can also say that being a Windsor is *who he is* with just as much justice as the guy with the 150 IQ can say that being very smart is *who he is*, just as the breathtakingly beautiful woman can say that being beautiful is *who she is*.

Roger:

We can talk about whether some process is fair in the sense of neutral rules applied equally to everyone, but we can also talk about whether the process is fair in some bigger-picture way, where we’re really discussing what the rules of the game should be in the first place.

Imagine a classroom where the teacher announces that the grades will be assigned based on the order in which assignments are turned in, and that’s the only rule in place. In that classroom, a clique of the biggest half-dozen guys can guarantee that they get As by not letting anyone else turn in their assignment until the big guys have done so, or by threatening to beat up anyone who turns in an assignment before them. That’s fair–the rules were specified clearly up front, and applied equally to everyone. But it would probably be a fairer process if the teacher forbad violence and threats of violence.

Similarly, basketball would still be an entertaining game without 3 point shots or rules against goaltending, but I don’t think it’s unreasonable that people tweaked the rules to make things more fair for shorter players, say.

It’s reasonable to consider whether the rules of the game have been applied fairly, but also whether they’re the right rules.

64 cowboydroid April 10, 2017 at 12:05 am

A very poignant observation, Tyler.

65 TallDave April 10, 2017 at 12:41 am

Hence the Protestant ethic. Consumption inequality matters a lot, especially for people at near-starvation consumption. Income inequality is the operation of free choice to organize an economy efficiently enough to raise everyone in the OECD well above near-starvation consumption.

66 Matthew Young April 10, 2017 at 7:18 am

Fairness is equal access to information along with the opportunity to bet.

67 The Other Jim April 10, 2017 at 8:49 am

Kind of. But there are still those who will whine that a hardworking, educated American has those things while a Brazilian who just watches TV and posts on blogs all day does not.

68 albatross April 10, 2017 at 9:00 am

The practical problem is that fairness of processes is often hard to observe, but (in)equality of outcomes is easy to observe. A big inequality in outcome is often taken as evidence of unfairness of the underlying process.

Women are about half the population and about 14% of the engineers. That doesn’t necessarily mean that the processes by which people become engineers are unfair to women, but that’s at least a *plausible* explanation for the difference, and once you’ve done away with overt discrimination (like corporate policies that forbid the hiring of women as engineers), it’s pretty hard to say exactly how fair the process is. Trying to measure the fairness of that process is subtle, subject to a lot of ways the results might be tweaked by selection of parameters for measuring it. There are anecdotes of extremely nasty work and educational environments that drive some women from the field, but it’s not clear whether that represents an explanation for the big differences in outcome. (Plenty of men are also driven from their chosen field by abusive work or educational environments.)

Worse, it’s possible to have an unfair, biased process and a difference in outcomes in opposite directions. For example, during the years of the Jewish quota, I think Jews were both being explicitly discriminated against in admissions to top schools, and also overrepresented at the top of medicine, law, math, and science.

69 Hazel Meade April 10, 2017 at 1:34 pm

But it’s not hard to observe the fairness of rules. You read the rule, and if it is the same irregardless of gender (for instance), then
you can generally say it’s fair. There a tiny number of rules and regulations compared to the number of individuals in society. It is possible to look at rules and regulations to determine if they are fair or not without doing aggregate metrics over society.

What you’re talking about in the fairness of “processes” is whether there is some social prejudice going on. It’s certainly hard to observe those things, but it’s not clear that it’s the government’s business to correct for them. For one thing, in a free market, there should be selection pressure on organizations that exhibit prejudice. Women who wanted to work in engineering would go to universities where they are not discriminated against and work for employers where they are not discriminated against, which would favor those organizations in the market. As noted the government has no mechanism to determine when the unfairness is corrected because the government has no means of knowing what percentage of engineers should be female. Finally, the government is not well positioned to be “fair” in it’s corrections , because it is driven by many political interests that generally aren’t aligned with the goal of universal fairness.

I think the best the government can do, really, is to set fair rules and let the chips fall where they may. If others in society (i.e. academia) can identify social processes that are creating unfairness, we can certainly work to change those things without relying on the blunt and treacherous tool of the state.

70 Roger April 10, 2017 at 3:18 pm

Hazel,

I think your comment is one of the few that is framing this issue properly. Let me cross post my comment from Crooked Timber:

Finally! I have been waiting for academics to point out that inequality and unfairness are completely different concepts and that inequality is simply a mathematical relationship but that we are strongly wired to reject unfairness.

Let me elaborate. Inequality is simply a value neutral relationship between any two dimensions. We are unequal in height, distance to Omaha, lightness of house color, or whatever. But nobody cares in the slightest. What we care about is unfairness and privilege (see Boehm for the evolutionary origins and anthropological support), with privilege defined as different rules (private law).

When evaluating equality we always must ask equality of what? There are multiple ways to define it and here are some of the most common:

1). Equal outcomes regardless of effort or contribution (raw income inequality)
2). Outcomes equal or proportional to contributions (commission sales) or effort (hours worked)
3). Outcomes equal or proportionate to role or position served (pay grades in business, or simply the way pirates would give double shares of booty to the elected captain and quartermaster)
4). Outcomes equal or proportionate to need (Marxism or family).
5). Outcomes proportionate to the rules of the game (rule egalitarianism) such as seen in a sport where games can be both wildly lopsided in outcome yet totally fair.

The problem is that these definitions can and do often contradict. Thus it is vacuous to claim INEQUALITY as we can often just use an alternative definition and argue that no, this is actually more equal or proportionate using this alternative measure of fairness.

Thus we are arguing the merits of which standard of equality or fairness is used at that point in time. And I think we can all come up with examples of when we would prefer to use each, and where it would clearly be pragmatic to prefer one over another (sports where we get equality of outcomes regardless of contribution is usually pretty absurd for example).

So, as per Boehm, we are very, very concerned with fairness, and for good reasons. However, the definition of fairness depends upon how we decide institutionally to operate and which definitions and rules will be applied.

The focus on income inequality usually completely misses this. In the US, it is easy to verify that most bottom quintile families don’t work at all, and less than a fifth work full time. This is certainly “inequality regardless of effort or contribution,” but it may (or may not) be completely fair in terms of rule egalitarianism or rewards commensurate with effort or contribution.

Those wishing to pretend that inequality is unfairness simply have not thought about the issue hard enough.

71 Hazel Meade April 10, 2017 at 5:23 pm

Thank you, the thing is that I have studied some of this while taking a minor in Cognitive Science, where Ultimatum Games and fairness and punishment norms are a major topic. It has been well known for some years that people will prefer unequal distributions when they are not presented as a windfall but as wealth that is earned. Whenever concepts of merit or relative effort come into play people no longer consider it “fair” to distribute wealth equally. They want to reward merit and effort and punish slackers. This is why cognitive scientists have started to identify “equal distribution” as just one of several possible fairness norms, and have ceased conflating “equal distribution” with “fairness”.

72 Roger April 10, 2017 at 7:50 pm

Well said!

This is one of those discussions where careful introspection reveals that the majority of people, even some so-called experts in the field, are simply framing the issue poorly (possibly intentionally). There is no fundamental reason to assume that equality of outcome is more fair than rule egalitarianism or outcomes proportionate to contribution.

73 albatross April 11, 2017 at 3:44 pm

I agree that different outcomes can happen with fair enforcement of rules, or even with a completely fair set of rules (if we can define what that is). Almost any set of rules you could come up with for basketball that left it recognizably the same game we know would give an advantage to tall people over short people.

On the other hand, it’s not enough to say “I’m going to establish some neutral on the face of it rules and then the outcome will be fair.” You can establish rules (or have rules evolve) that benefit some people over others without any explicit thumb on the scales.

74 Juan April 10, 2017 at 9:16 am

The useful inequality arguments are the ones which are about fairness. The bad inequality arguments have lost track of that grounding. I might reverse the ratio though, with 1/4 having really lost the thread. Perhaps I read different things.

75 rayward April 10, 2017 at 9:57 am

Here’s an amusing essay on inequality: https://newrepublic.com/article/141644/divided-fall-trump-symptom-constitutional-crisis-inequality. In the essay, the author argues that a high level of inequality results in a constitutional crisis, which can only be rectified by the actions of patriots:

“When the Industrial Age plunged America into its second constitutional crisis, wise patriots answered Madison’s call. From the 1890s to the 1930s, populists, progressives, and New Dealers alleviated the strain on our system by passing a combination of new laws and constitutional amendments. Anti-trust measures broke up the concentration of economic power. Working hours were regulated, and labor unions offset the power of employers. The Constitution was amended to establish a progressive income tax, helping redistribute superconcentrated wealth. The people’s voting power was expanded by requiring the direct election of U.S. senators, permitting citizens to float ballot initiatives to change laws by popular vote, and extending the franchise to women. These reforms were all designed to realign economic and political power—to give a fair measure of it back to the people. Only then could the Constitution work again as intended. By the 1960s, the progressive patriots had largely succeeded. This was the age of the Great Compression: The gross domestic product soared, wages rose, and the middle class boomed. Not since the founding era had America seen such economic equality.”

Of course, what the author fails to mention is that the high level of inequality to which he refers was “cured” by the financial collapse in 1929 and the Great Depression which followed. All that progressive legislation can be credited with “curing” inequality only if one attributes the financial collapse and Great Depression to that legislation. And, no doubt, many did at the time, just as many attributed the recent financial crisis and Great Recession to “regulations”.

76 Art Deco April 10, 2017 at 6:48 pm

It’s a political-sociological just-so story of the sort Arthur Schlesinger might have produced. Of what interest is that to anyone but a partisan Democrat searching for talking points?

77 Troll Me April 14, 2017 at 10:11 am

When you deal with countries where “inequality” may be measure in bone size of children which indicates average malnourishment among the local population, then this comes across a little offensively.

First world problems.

The fact that some people had all their opportunities practically handed to them directly bothers me more than their BMV, detached house and 5-start Michelin life in general compared to a lesser vehicle, shared apartment.and the luxury of no longer having to learn how to prepare foreign foods myself in order to afford to try them.

But I’ll tell you, the inequality itself and not the unfairness of it alone REALLY FUCKING MATTERS IN THINKING THAT’S NOT COOL!

People who grow up with a silver spoon in their mouth do not understand how much of an advantage that is. And the material stuff they can get with it? Really matter for why the inequality is not fair. Want to close the business deal? Oh, I cannot afford dinner as restaurants where people who sign bug business deals like to eat dinner. I cannot transmit my abilities and successes by throwing $500 to the wind on steak dinner for two. It will not scar my physique for pass on that steak dinner, but it is precisely that material inequality that makes the unfair aspects of it manifest for many people.

Because you judge books by their covers. And your shoes are worth more than my entire wardrobe.

78 required April 21, 2017 at 3:45 pm

“fair inequality” = non-communist state

“unfair equality” = communist state

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