Winners and Losers

This will be the third installment in my musings about useful forms of justice.

Here we will look at winners and losers of happenstance and chance.
We are all products of randomness. As a species, what makes us human is the result of a few billions of years of random mutation and selection. Trial and error on a gigantic scale.

As person, our genes are a randomly recombined sample of our parents’ DNA. The family we are born into, the friends we make at the playground, the information we glimpse from grown-ups’ discussions, the experiences that shape us, the habits we acquire unwittingly, none of it is under our control. And it takes a whole lot of effort and introspection to change what we call “character”, “personality” and “preferences” later on.

On a scale of 1 to 13, how good of an idea is it to punish people for the effects of randomness?

This is the question that was raised at the end of the last installment. I just hadn’t formulated it in the same way.

We were left with the 4 possible systems generated by the different interpretations of Rawls’ second principle of justice.

Let’s talk about some of the concepts first.

“Everyone’s advantage”

Efficiency, for Rawls, has a rather standard definition widely popular in the economic literature: A system is efficient, “if and only if it is impossible to change the rules, to redefine the scheme of rights and duties, so as to raise the expectations of any representative man (at least one) without at the same time lowering the expectations of some (at least one) other representative man.” [Rawls, S.70]
In other words: a system is efficient, “if and only if” there is no free money left. If there are improvements to be made for free, your system is not efficient.

There are a lot of configurations that satisfy this condition. For example, there could be nothing to improve in a situation, where one person owns all of the resources, from a perspective of efficiency. It’s already efficient, because you can’t give other people more, without at least one person, the rich guy, losing something. But it seems unlikely that this arrangement is “efficient” in any other meaning. Like not producing horrible suffering. So although it’s efficient economically, it’s not desirable.

The difference principle on the other hand singles out a particular point to judge the social and economic inequalities the system produces from. It states: “the higher expectations of those better situated are just if and only if they work as part of a scheme which improves the expectations of the least advantaged members of society.” [Rawls, S.75] . The difference principle is strongly, yet sensibly egalitarian. Unless there is a distribution that makes”the rich” AND “the poor” better off, an equal distribution is preferred.

This fundamentally changes the approach for the improvement of the society.

In line with what I talked about in “How to get to Utopia“, this shifts the focus from trying to improve the already great parts of society to improving those parts that need improving badly. And that are sometimes frustratingly cheap to fix.

“Equally open”

The other phrase that needs clarification is “equally open”. This can easily be satisfied, if any position is formally open to all. But is it really open to all? Obviously, not everybody can become a neurosurgeon or an Olympian athlete.
But the required skill set for most positions is attainable by a lot of possible candidates. And that is exactly the question: should a position be open formally to all applicants that happen to meet the requirements, however they got there? Or should society at large make efforts to educate and train its citizens to the fullest extend reasonable?
Most existing societies have made their choice: somewhere in between.
There is education and training, but there are also financial barriers to the best education possible. Likewise with positions: there are laws that require positions to be publicly announced and free of discrimination; but a lot of the “good” positions are filled via networks and contacts and not on the basis of skills, capabilities and willingness to work.
But existing imperfections like that are the motivation to think about improvements.

So let’s look the systems that arise from combining the different interpretations and choose the one we like best.

Natural Liberty

The system of natural liberty selects an efficient distribution. It assumes and acknowledges that there is an initial distribution of income and wealth as well as of talents and abilities. This initial distribution leads via the standard assumptions of a competitive market economy, namely that income and wealth will be distributed in an efficient way, to a certain resulting distribution. We don’t need to discuss the veracity of these assumptions here.
The system of natural liberty accepts the resulting distribution as just, whatever it is. There only needs to be a formal access to all positions and there is no effort to preserve an equality, or any bounds really, on social conditions.
Consequently, the initial distribution depends on natural and social contingencies. Thus the distribution of income and wealth at any time would be the cumulative effect of prior distributions of natural assets, like talents and abilities, that were developed or left unrealized and that were favored or disfavored over time by social circumstances and random effects like accidents, luck or misfortune.
This points to a problem with this system: it permits distributive shares to be influenced by factors such as the amount of money a family can spend on education, which might have been completely different, if great-grandpa hadn’t been forced to close down a promising shop an go to war. It seems entirely arbitrary to base the life chances a system offers to people on the effects of random events.

Don’t get me wrong. I believe in the power of randomness to break ties, remove bias or make systems work at all: a coin toss at the start of a game, randomized controlled trials, random numbers for cryptography or Monte Carlo sampling are just a few examples of beneficial randomness, about which I will talk about in a future post.

And it might be reasonable to keep accepting this kind of arbitrariness on the chances of people. But I think we can form a more coherent and productive society, if we make the possibility of realizing people’s potential a priority.

Liberal Equality

The liberal interpretation of “equally open” tries to correct some of the problems with the natural liberty interpretation by adding the principle of fair equality of opportunity. The idea is that positions shouldn’t be open just formally, but that those with similar abilities and skills should have similar life chances. Or to put it more specifically: if we assume an initial distribution of natural assets, those with the same level of talent, ability and willingness to use them, should have the same prospects of success in life, irregardless of their initial place in the system, i.e. independent of their parents’ income.
“In all sectors of society there should be roughly equal prospects of culture and achievement for everyone similarly motivated and endowed” [Rawls, S.73]
The liberal interpretation seeks to shift the influence of social contingencies and natural fortunes on distributive shares. If that’s the goal, a pure market economy, like in the anarcho-capitalists’ conception of the world, won’t suffice. It produces an efficient distribution, but there are no a priori bounds on it. It’s whatever it turns out to be.
There need to be additional institutions to ensure fair equality of opportunity.

This translates to barriers on excessive wealth accumulation and equal opportunities for education and training. I think we are well on our way to work on the latter part. Online education, free or almost free access to all sorts of topics, ranging from artificial intelligence to biotech and nuclear physics, the nascent approaches to create substitutes for the regular diplomas, like Udacity’s Nanodegrees and a growing disregard for formal education in favor for “real skills” lead in that direction. I am not so sure how good we are doing on the former point.

In the this scheme of society, income and wealth will still be distributed in accordance with natural abilities. That “feels” better than basing it on social contingencies like your parents’ wealth. But I am skeptical that basing it on the natural lottery is far superior. Why is that random distribution better than another random distribution the person has no influence over? I can’t think of a reason. But there might be one. Imagine yourself behind the veil of ignorance. What would be your reason to allocate the life styles based on natural abilities? How sure would you be to want that mode of distribution, if you might end up anywhere on the intelligence distribution?

Natural Aristocracy

I’d like to spend a few words on natural aristocracy here. No attempt is made to regulate the happenstances of social circumstances in this version, other than what’s required to satisfy formal equality of opportunity. Those people endowed by nature with fortunate characteristics for their particular social system are still “obligated” to use their abilities for the good. The better situation of those favored by nature is regarded as just only when less would be had by those below, if less was given to those above. The distribution of natural abilities and of social contingencies is accepted. Again, there might be reasons to favor exactly this interpretation of Rawls’ second principle of justice, but I can’t think of one.

Democratic Equality

Once we try to find an interpretation that deliberately treats every person as equally valuable and does not determine a person’s share in the benefits and burdens of social cooperation on their luck in the social and natural lottery, it becomes clear that the democratic interpretation is the preferred option.
We do what we can to give people of equal natural abilities equal chances of success in life, by implementing measures to mitigate social contingencies, but we also make sure that we have institutions in place that take care of those people, who draw a bad lot in the distribution of natural talents. A theme that might become increasingly more important with the advent of more and qualitatively superior automation. I will write about that in a future post.

Let’s be clear here. It’s a choice. And a forced one at that.

By choosing to reason from behind the veil of ignorance, by choosing to limit the available information to the general and reason about “representative” persons, instead of about our own concrete interests, we arrive at a point, where it looks like a good idea to spread out the risks of losing out in one or both of those random distributions. Keep in mind that differences in income and wealth are still fine. But:

According to the difference principle, it is justifiable only if the difference in expectation is to the advantage of the representative man who is worse off [.] [T]he greater expectations allowed to entrepreneurs encourages them to do things which raise the long-term prospects of laboring class. Their better prospects act as incentives so that the economic process is more efficient, innovation proceeds at a faster pace, and so on. […]
A scheme is unjust when the higher expectations [of the better off] are excessive. If these expectations were decreased, the situation of the least favored would be improved. How unjust an arrangement is depends on how excessive the higher expectations are and to what extent they depend upon the violation of the other principles of justice, for example, fair equality of opportunity[.] RAWLS, S.78-79

Of course we will run into all sort of problems, when we begin to measure the effects of income inequality and especially their effect on the future. But that’s what economics and randomized controlled trails are for. That’s something, we can work on.

My current thinking is that inequalities in society are probably unavoidable.

There are differences in interest, skill, luck, motivation, etc. and I am too familiar with my own psyche to expect of anybody to work purely for the greater good or uncritically follow a “great plan” devised by some expert panel.
If we mess with the incentives to contribute to society, we are playing a dangerous game. A lesson that can be gleamed from existing experiments with centralized planning; in the Kolkhoz and the cubicle. So keeping open the possibility for people to make a whole lot of money seems rather important to me. Because it works.

Without a major altruism upgrade in the human psyche, we have to design systems that pander to the personal profit motif and cope with inequalities. They aren’t “evil” in a moral sense, they are a risk to the cohesion of society and can be a drag on our potential for scientific, technological and material progress.

I think, we can do better than we are currently doing and will end this installment on justice by citing – and siding with – Rawls:

Social and economic inequalities are to be arranged so that they are both (a) to the greatest benefit of the least advantaged and (b) attached to offices and positions open to all under conditions of fair equality of opportunity. RAWLS, S. 83