Of the various criticisms leveled at a combined ‘job or income guarantee‘, ones appealing to fairness usually go along the lines that it would be unfair for healthy individuals outside the workforce to receive an income while others are occupied in jobs. In considering this objection, a number of points come to mind:heteconomist
Carney is therefore totally correct to say that: "When the whole system is rigged, there’s often no good way to unrig just one part." This is precisely the point made by legal realists and made by Nagel and Murphy in their sweeping book The Myth of Ownership.
You can't just look at one single piece of the economic or tax system, whether that's the carried interest loophole, income tax rates, economic regulations, or anything else. The "whole system is rigged" together into one big edifice of production and distribution and it all fits together. From our system of property and contract law to our system of capital income taxation, we've constructed an entire economic system, and analyzing small pieces of it in isolation for their fairness makes no real sense.
What we have to do instead is analyze the whole system. When we set out to determine how to construct our economic institutions, we have to ask ourselves: what are we trying to do here in broad terms?
For me, the answer is to invent an economy that ensures everyone has access to the resources and capabilities necessary for them to flourish and pursue their personal projects. Instead, we've constructed a system that unnecessarilly generates widespread poverty, inequality, economic insecurity, and social immobility, all of which frustrate flourishing for huge swaths of those subject to our economic institutions."When the whole system is rigged, there’s often no good way to unrig just one part." Exactly.
We would like to think that it is possible for a society to embody basic institutions that work to preserve and enhance the wellbeing of all members of society in a fair way. We want social institutions to be beneficent (producing good outcomes for everyone), and we want them to be fair (treating all individuals and groups with equal consideration; creating comparable opportunities for everyone). There is a particularly fundamental component of liberal optimism that holds that the institutions of a market-based democracy accomplish both goals. Economic liberals maintain that the economic institutions of the market create efficient allocations of resources across activities, permitting the highest level of average wellbeing. Free public education permits all persons to develop their talents. And the political institutions of electoral democracy permit all groups to express and defend their interests in the arena of government and law.
But social critics cast doubt on all parts of this story, based on the role played by social inequalities within both sets of institutions. The market embodies and reproduces a set of economic inequalities that result in grave inequalities of wellbeing for different groups. Economic and social inequalities influence the quality of education available to young people. And electoral democracy permits the grossly disproportionate influence of wealth holders relative to other groups in society. So instead of reducing inequalities among citizens, these basic institutions seem to amplify them. ...
So how should progressives think about a better future for our country and our world? What institutional arrangements might do a better job of ensuring greater economic justice and political legitimacy in the next fifty years in this country and other democracies of western Europe and North America?
Martin O’Neill and Thad Williamson’s recent collection, Property-Owning Democracy: Rawls and Beyondcontains an excellent range of reflections on this set of problems, centered around the idea of a property-owning democracy that is articulated within John Rawls’s A Theory of Justice....
One thing that is striking about the discussions that recur throughout the essays in this volume is the important relationship they seem to have to Thomas Piketty’s arguments about rising inequalities in Capital in the Twenty-First Century. Piketty presents rising inequality as almost unavoidable; whereas the advocates for a property-owning democracy offer a vision of the future in which inequalities of assets are narrowed. The dissonance disappears, however, when we consider the possibility that the institutional arrangements of POD are in fact a powerful antidote to the economic imperatives identified by Piketty....
Two questions arise with respect to any political philosophy: is the end-state that it describes a genuinely desirable outcome; and is there a feasible path by which we can get from here to there? One might argue that POD is an appealing end-state; and yet it is an outcome that is virtually impossible to achieve within modern political and economic institutions. (Here is an earlier discussion of this idea; link.) These contributors give at least a moderate level of reason to believe that a progressive foundation for democratic action is available that may provide an effective counterweight to the conservative rhetoric that has dominated the scene for decades.Understanding Society
There's one point Greg Clark makes in The Son Also Rises which strikes me as plain wrong. It's this:Stumbling and MumblingThe world is a much fairer place than we intuit. Innate talent, not inherited privilege, is the main source of economic success (p14).The problem here isn't merely that, as Rawls said, talent is arbitrary from a moral point of view and so should not be the basis for unequal incomes. (In fairness, Clark endorses this view). Instead, it's that a strong correlation between talent - innate or not - and economic success is no indicator of a just society....
According to a Rasmussen poll released Wednesday, 53 percent of likely U.S. voters disagree with the sentiment that the economy is fair to people "who are willing to work hard." Only 41 percent agree with that statement.
Americans were more evenly divided on the issue just two months ago. In December, 47 percent of Americans agreed with the statement that the economy is fair, while 49 percent disagreed, according to Rasmussen.
This pessimism may reflect growing income inequality in the U.S. where the gap between the rich and the poor has risen more than any other major Western country since 1960. Unsurprisingly, high income inequality is linked to low economic mobility.The Huffington Post | Business
Taibbi tells Bill that fearing another economic calamity is no excuse for turning a blind eye to shockingly unethical decisions and management.AlterNet
“The rule of law isn’t really the rule of law if it doesn’t apply equally to everybody. If you’re going to put somebody in jail for having a joint in his pocket, you can’t let higher ranking HSBC officials off for laundering $800 million for the worst drug dealers in the entire world,” Taibbi tells Bill. “Eventually it eats away at the very fabric of society.”
Fiorina: ‘It is not fair’ that public workers are ‘so rich’ (via Raw Story )
Philip Pilkington has written a piece about the problem with individualism and myths, a topic I have written on also. While I agree with the bulk of what he has to say, and I offer some of my own comments (these are taken from a paper in review, a copy is available on request) in what follows, I feel he misses the true culprits in criticising Adam Smith.Magic, Maths, and Money — The relationship between science and finance
John [Tomasi]’s project is laudable — rediscover and synthesize common ethical ground between the two dominant branches of classical liberal thought. Roughly speaking, the bifurcation into what John labels “libertarianism” and “high liberalism” arose out of John Stuart Mill’s argument for the treatment of economic liberty as less essential than other civil liberties.
Thus the two branches of thought bifurcate from the classical liberalism tree trunk: modern libertarianism, which prioritizes property rights and economic liberty as foundational to all other civil liberties (e.g., Rothbard), and high liberalism, which picks up Mill’s moral demotion of economic liberty and builds upon it to justify a substantial government apparatus for regulation and intervention in the private economic decisions of individuals, with the stated objective of designing a social system that will generate benefit particularly for the least advantaged in society (Rawls’ operationalization of the maximin principle).Read it at Knowledge Problem | Commentary on Economics, Information, and Human Action
Ironically, actually, one justification often offered for this regulatory system is to maintain uniform treatment of residential customers in a way that will ensure that prices stay low and stable for “vulnerable” consumers such as elderly and low-income consumers; this justification sounds Rawlsian. But it also does constrain the self-authorship of other consumers, producers, and innovators in ways that may make them worse off, and moreover, if those others were allowed choice and freedom of expression through their technology and energy consumption decisions, they may bring about a world in which new products and services actually drive down costs or create unanticipated value that could benefit those vulnerable consumers. Is that tradeoff worth it, ethically or economically?What is questionable here is the "may." Evidence seems to point in the direction of the most vulnerable becoming worse off through deregulation initially with out some countervailing action like a subsidy.
