Thursday, December 31, 2009

Desert dessert

Just to round off the... er... discussion that Sunny Hundal and I were having the other day, Chris Dillow adds his thoughts on the matter—asking whether the concept of "desert" should have any role in distributive justice.
The thing is, two of the most important books on this subject in recent years - Roemer’s Theories of Distributive Justice and Kolm’s Modern Theories of Justice—almost entirely neglect the notions of desert or merit.

There are, I think, two reasons for this.

One is that it’s impossible to tell what any individual really deserves. Do I, for example, deserve to earn more than the average worker? In one sense, no: my work is much less onerous or unpleasant than the average. But on the other hand, this pleasant outcome could be a just reward for years of effort earlier.

I don’t know which it is—or at least, I don‘t if I slough off the self-serving bias!—so I’m blowed if I can judge anyone else’s income. For this reason, I share the Devil’s consternation at the idea that public opinion should adjudicate.

Secondly, it’s possible that none of us deserve anything. This isn’t just the traditional Christian position that we are all miserable sinners. It’s also the Rawlsian one, that the distribution of talents—which include an appetite for hard work—is “arbitrary from a moral point of view.” And of course, none of us “deserves” the enormous good fortune of having been born into a liberal democracy in the late 20th century.

For me, these reasons suffice to disregard “desert” as a macro principle colouring our views about the distribution of income—though we might use it in other contexts, as when we say “he deserved that goal” or “he deserves to go to prison for that.”

This is not, in itself, a particularly leftist position. Intelligent libertarians share it. Hayek was wary of the idea of desert, and Nozick wrote of entitlements, not desert; there’s a difference.

Chris acknowledges that there are differences amongst the rich—though he draws only the easy distinction between the "talented footballer or musician or the innovative entrepreneur" and the "rent-seeking exploiter" (what about plain, old hard work? Or luck, e.g. Lottery winner?)—but opines, correctly, that our tax system probably cannot distinguish the difference between them.

Of course, what would really help to make this distinction is if the state were not so easily able to indulge in policies that lead to rent-seeking through, for instance, establishment of barriers to market entry.
Rent seeking generally implies the extraction of uncompensated value from others without making any contribution to productivity, such as by gaining control of land and other pre-existing natural resources, or by imposing burdensome regulations or other government decisions that may affect consumers or businesses.

While there may be few people in modern industrialized countries who do not gain something, directly or indirectly, through some form or another of rent seeking, rent seeking in the aggregate can impose substantial losses on society.

Studies of rent seeking focus on efforts to capture special monopoly privileges such as government regulation of free enterprise competition.

The term "monopoly privilege rent seeking" is an often-used label for the former type of rent seeking. Often-cited examples include a farm lobby that seeks tariff protection or an entertainment lobby that seeks expansion of the scope of copyright. Other rent seeking is held to be associated with efforts to cause a redistribution of wealth by, for example, shifting the government tax burden or government spending allocation.

To a large extent, therefore, rent-seeking is, at best, severely exacerbated by "big government"—which is, itself, generally seen as necessary to achieve social justice.

To sum up, the reality of Sunny's position is that he wishes to achieve "social justice"; to do this requires a big state and income redistribution; both a big state and income redistribution lead to a substantial increase in rent-seeking; rent-seeking leads to a class of people whom Sunny would call "the undeserving rich".

Ironic, don't you think?

And this is the problem with all too many people on the Left, especially in this country: they simply don't understand—or will not accept—that the measures that they advocate will not achieve the endgame that they desire.

This is something that is highlighted by Tim Worstall's comment on Sunny's expansion of his "class war" term.
“Economic populism of the left has deep roots”

Aye, deep roots in stupidity.

This is the point about that leftish economic populism that so enrages people like me. Not that the goal is undesirable (for many of the goals are desirable) but that the methods chosen to reach said goals don’t in fact work. In many cases they are actually counter-productive.

Just as one example, take the taxation of corporate profits. You’ve got the economically illiterate like Polly and R. Murphy shouting that companies must pay “their fair share”. That taxes they don’t pay fall upon the shoulders of the workers.

Then you’ve got the literate like Larry Elliott (well, he is on a good day) and Vince Cable pointing out that companies don’t pay tax: people do. The tax incidence argument.

Now, when you take on board that (not very surprising and long known point about incidence) you start to realise that if you want both an ongoing increase in living standards and also a more progressive tax and benefit system then you have to do what the Nordic countries do. You want lower taxes on corporate profits and capital in general than we have now. Sure, you can also have higher income taxes, as they do (and to get the money you really need for a large redistributive State you need higher consumption taxes, VAT, as well).

Now note that I’m not a supporter of this sort of social democracy. But that isn’t my point here. It’s that if you do desire this then it would help if you took on board how those places actually do work.

Rather than simply appealing to the populist instincts….make the companies pay!

That’s what annoys: this economic populism ends up not delivering the results that are promised.

Not only does this "economic populism" not deliver the results desired, but it also delivers those that are not—so-called "unintended consequences", such as the rent-seeking that leads to Sunny's "undeserving rich".

And despite a century of fruitless tinkering—and, in many places, outright dictatorship—many on the Left still won't accept that attempts to fix these unintended consequences through yet more laws and regulations will simply lead to more unintended consequences and undesirable outcomes.

I think that it might be a form of insanity.

6 comments:

Savonarola said...

I am not convinced that Sunny's inability to grasp the consequences of the policies he promotes is simply that he is thick/bitter/twisted etc.

Many who parade their bleeding hearts and proclaim their solidarity with the ignorant masses simply do so because is the soft option to gaining status and power. Sunny and co, once on top of the heap, will throw beads to the grateful natives.

Evil bastards more than misguided twats, I think.

ma said...

Life is not fair. Some people are born into huge amounts of wealth and have excellent educations handed to them, and others are not.

I think that rather than spending a lot time whinging about what is 'fair' and what is not, your debating partner should roll up his sleeves and do something about it.

Theorist on the redistribution of wealth rarely go about giving their money away. It's the worst in limosine liberalism.

I'm a big proponent of fixing things in education so that everyone gets a fair shake to make a large fortune if she or he chooses.

No sense in taking money from people who are probably helping the economy move along (at least here in the States).

Ryan said...

Rent seekers are often considered worthy by the left. I recently walked out of a Josie Long gig, having expected whimsy and been presented with a socialist worker rally circa 1983.

She got apeshit levels of applause for suggesting that 'everybody who works in the private sector for nasty dirty profits should get a job for the government or a charity, so that they can help people out rather than exploit them'

Then it went on to banning the Sun because it encouraged rape.

'Alternative' comedy is awfully monocultural.

Roy Stirred-Oyster said...

Wrong thread, I know, but it's the most current:


Richard North is being leant on:

http://eureferendum.blogspot.com/2009/12/rather-preoccupied.html

Spread the word.

Budgie said...

Ryan quoted Josie Long saying: 'everybody ... should get a job for the government or a charity, so that they can help people out ...'.

"We're from the government and we're here to help you." Ominous words indeed.

Socialism is insanity.

Anonymous said...

The idea of dropping the notion of desert from that of 'social' justice makes about as much sense as dropping the idea of freedom from that of liberty!

In the everyday understanding (which as J. L. Austin noted was the first word on any subject) the concept of justice simply is rendering to each person their just deserts. This is what all traditional discussions of justice amounted to, from those of Plato and Aristotle to that of Hume.

Indeed it is basic to our understanding of justice that punishments are unjust to the extent they are undeserved, rewards are unjust to the extent that the person rewarded does not get what they deserve or are entitled to.

Of course different people’s conception of what anyone deserves differ and as such their conceptions of justice will differ, but to pretend we can drop the concept of desert from that of justice means that whatever is left cannot be justice at all!