Saturday, 16 January 2016

Economic desert bases

People who complain that society "gives x more than they deserve" and "gives y less than they deserve" presumably have some basis for making this judgment. We can take this question one step back and ask the underlying basis for this. We call this the desert base.

Essentially, a desert base is the underlying thing which determines what people deserve. For winning the best leading actor oscar the base is providing the most impressive acting performance in an eligible film. However, where it comes to economic desert agreement about the ideal base is lacking.

The three most commonly cited desert bases are:

·         Effort (people who work hard deserve more than the lazy)
·         Contribution/Productivity (people who make a larger contribution to society should get more)
·         Compensation (people who give up more should get more)

However, there are problems with each of these bases:

To reward people for the effort they make opens the question as to what activities should count as ones which efforts count. If I put a lot of effort into playing football with my friends this presumably doesn’t mean I deserve as much as someone who works hard as a paramedic. However, does this mean that the professional footballer is also undeserving? Presumably there would have to be a threshold at which point people’s activities become ‘work’ and thereby qualify them as deserving.

But this means that a particularly hard working lower division footballer is as deserving as a premier league one. Perhaps they are, but this raises further concerns about the incentives that such a system creates. If only your efforts determine your rewards then this reduces the pressure to increase productivity or for people to do work that they are more suited to—natural footballers would be better off playing rugby and vice versa so that both are putting in extra effort. Indeed people might find the work they would be best at easier and taking that work might make them worse off.

To reward people according to their contribution, on the other hand, would provide very good incentives for people. Someone who provides goods and services that are more valued by others (according to how much they are willing to pay for them) will receive more. One major concern with this is that it does not seem fair to reward people according to their productivity. Some people are more naturally talented than others and such people would be able to contribute more than others.

The third prominent approach could be seen as a solution to the two problems above. By providing people compensation for their activities in the name of the social product this would seem to take account of the effort that people put in but also allows for further sacrifices that people make that do not fall under the heading of effort. So someone who takes a particularly risky (though not otherwise taxing) job might be deserving of greater reward. It gets around the talent issue to a degree because people who find a job easier due to their talent would deserve less than their colleagues who find it difficult.

However, the compensation approach still shares a lot of the issues with the effort approach. People who suffer more for the economic produce because of their inefficiency would be more deserving than others. This again discourages people from doing work to which they are most suited and from making productivity gains.

Supporters of their preferred desert base can just bite the bullets presented above. However, specifying the potential underlying desert bases can draw out problems that might not occur to those who unreflectively adopt a desert-approach to economic justice.

In the next blog I will present a more fundamental reason to doubt the applicability of desert to economic justice. 

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