Tuesday, 11 February 2020

Philosophers utilising hours

Sometimes I notice political philosophers mentioning things like hourly pay that play a prominent role in my hourly averaging proposal.

I thought it might be useful to list these. Perhaps I should make a similar list regarding economics too.

Rawls and Pogge

Reading Thomas Pogge's Realizing Rawls (1989) prompted this blog. He mentions leisure as a good at several points in the book. I particularly noted the following table, which considers economic systems with different hourly tax rates to illustrate his discussion of Rawls' difference principle.



Pogge here considers how many hours people with different hourly incomes would work if they faced different levels of tax.

Rawls himself discussed leisure-time after being challenged by economists. He then added leisure-time to his index of primary goods. In Justice as Fairness Rawls notes that leisure-time can be added to the index of goods much more readily than native endowments and states of consciousness. He writes (p179) that "leisure-time has a reasonably objective measure and is open to view."

Pogge (1989, p198-9) writes "the index must also include leisure time as a distinct social primary good...Leisure time must play a role in interpersonal comparisons through which the least advantaged within an existing social system are identified. Even though their annual or lifetime income is rather low, those who choose to do only a few hours of well-paid work each week cannot plausibly be considered less advantaged than others who work many more hours per week in a lower-paying job."

Marxist economics

Marx developed a theory of surplus labour value from the pre-existing labour theory of economic value. Time spent working has a key place in this theory, since workers effectively have part of their working time stolen from them each day by their employer.

I'm not convinced by theories of economic value of this kind, and Marx's position isn't really the type of thing I'm interested in here. Nevertheless, I felt it should be mentioned that hours and working time do play some role in this approach as they have historically pushed activists to consider the issue. 

The Distribution of Time 

Other authors have considered how to conceptualise the distribution of time in society. Bob Goodin's Discretionary Time and Julie Rose's Free Time consider whether people have insufficient time available to them; time in which people have autonomy or over which they have freedom.

People's wage rate will influence how much free time they have. Hourly wage rate plays a part in determining someone's dicretionary time (Discretionary Time p43-5) and their free time (Free Time p40). One of Rose's illustrations contrasts people with differing hourly rates, and the difference this creates between them.

The focus of these works is different, but within the realm of work, different hourly wages will make a difference to the time they have available.

Endowment, Talent and Economic Rent

Other authors mention hours worked and hourly income when discussing the ideal form of tax or income.

Socialist philosopher G.A "Gerry" Cohen, for instance, argues that people should be paid the same per hour, unless they have a particularly onerous job. He says as much in Why Not Socialism? (around page 19-20). He writes that "under socialist equality of opportunity income differences obtain when they reflect nothing but different individual preferences, including income/leisure preferences. People differ in their tastes, not only across consumer items, but also between working only a few hours and consuming rather little on the one hand, and working long hours and consuming rather more on the other. Preferences across income and leisure are not in principle different from preferences across apples and oranges." So /leisure/work choices can lead to different levels of consumption even in a socialist utopia.

Stuart White in his book The Civic Minimum (p79-83) considers people's responsibilities to contribute to society in accordance with his "egalitarian earnings subsidy scheme." This determines people's pay with regard to their endowment, but also the number of hours they work. The approach is designed to get around some of the most troubling aspects of endowment taxation, and while it gets around the worst aspects of endowment taxes, it does not get around all of them. While White presents his subsidy as applying for each pound the person earns, my proposal is to apply the subsidy for each hour the person works (if their lifetime average is low).

Kristi Olson's paper "The Endowment Tax Puzzle" advocates a tax on economic rents and uses hourly income to illustrate the various cases she considers. Olsen argues that both endowment taxes and earnings taxes fail to distinguish between income based on economic rents to talent and earnings from other sources.

I believe my hourly averaging scheme gets closest to capturing the rents obtained by high earners, without requiring knowledge of people's endowments and setting of tax-rates accordingly.

Olson writes (p270) "Part of this problem could be alleviated simply by altering the current tax system to take into account not only the individual’s total earnings, but also the individual’s hourly earnings, such that individuals with lower hourly earnings would be taxed at a lower rate." 

Essentially, Hourly Averaging offers a way to put these suggestions into practice as well as can be without taking account of endowment (which could lead to a "slavery of the talented").

Conclusion

I have argued that hourly averaging is attractive from a broad egalitarian perspective, as an attractive hypothetical insurance choice, and that it can be appealing to non-egalitarians too.

Perhaps if the above authors had known of my proposal they could have invoked it as a close approximation of their own ideal.

It is also worth mentioning that the thinkers above mostly do not advocate a Universal Basic Income, but rather argue that income should track, however indirectly, the number of hours someone works.

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