Monday, November 26, 2012

Fairness

We are commonly tricked by a mythology of intrinsic fairness into adopting and promoting outcomes and procedures that there are few real-world reasons to promote.

[I]f I had $100, and another person had $5, and then an collective tax of $35 was invoked, it would not be fair for me to pay $30, and expect the other person to pay the remaining $5 just because I had already payed for 86% of the tax.

Why not?

I agree with the sentiment. However, it does raise the question: What makes something "fair" or "unfair"?

For context, the comment above was written in response to a post on taxing those who make more than $250,000 per year. I argued that we have put two wars on the national credit card, and that refusing to tax the top 2% as a way of paying for part of these costs means that we are having wars funded almost entirely by those making less than $250,000. Many of those have already paid with life and limb - they are being told to pay the rest of it in the form of reduced government services as well while those making more than $250,000 contribute nothing.

This, I asserted, was unfair.

But what does it take for something to be fair? How do we prove fairness?

Before analyzing fairness, it is useful to note that there are two distinct types of fairness - fairness in results, and fairness in procedure.

Fairness in results means that we are looking at the outcome and judging it as good or bad. For example, we each contribute $5.00 to a pool where we buy 100 lottery tickets. If any ticket wins, we split the money evenly. Perhaps one of us can double our stake in the outcome by doubling our contribution. If I donate $10, then I get "two shares" of the jackpot.

Procedural fairness says that the final result does not matter as much as the procedure for getting that result. A game is an example of procedural fairness. If everybody followed the rules, then it does not matter what the final score was, it was a fair game. A fair trial does not look to produce good results for the accused. It aims to establish a procedure whereby the accused is not handicapped in proving that he does not deserve punishment. A fair punishment, on the other hand, is an example of outcome fairness - disproportionate punishment is unfair.

Now, let's look at the question of what it takes for an outcome or procedure to be fair.

A lot of times it is argued that a particular outcome or a particular procedure is simply, intrinsically fair or unfair. In many cases, a person will simply assert that a procedure or outcome is fair or unfair without offering any type of evidence or support for that conclusion. She expects the listener to grasp this quality of unfairness.

This does not guarantee that the person is making a claim that an outcome or procedure has intrinsic value - but it is a moderately reliable sign.

However, intrinsic value does not exist. All claims about an outcome or procedure being intrinsically fair are false.

All real value exists as relationships between states of affairs and desires. Moral value exists as relationships between malleable desires (desires that can be molded through rewards such as praise and punishments such as condemnation) and other desires. A virtue is a malleable desire people generally have reasons to promote, while a vice is a desire they have reason to inhibit.

Fairness, then, is an outcome or a procedure that people generally have many and strong reasons to cause others to like - whereas unfairness is an outcome or procedure people generally have reason to cause others to dislike. This liking or disliking then motivates people to act in ways that "realize" a fair outcome or procedure while avoiding unfair outcomes or procedures.

Let us take this view of fairness and apply it to the principle that, when it comes to taxes, everybody should pay the same percentage of their income. Let us say . . . 20%. A person who makes $110 will pay $22, while a person who makes $11000 pays $2200.

When it comes to taxes, is there a reason to get everybody to like a result where everybody pays the same percentage?

Recall, that the only reasons that exist are desires themselves.

In a sense, it depends in what you are measuring.

Let us imagine a community with 100 people. They make different amounts of money. It is agreed that everybody pays 20% of their income in taxes. However, it is a community where $100 is needed to survive. Those who end up with less than $100 will die.

In one sense, the person with $110 who pays $22 in taxes is paying the same percentage as the person with pays $11000 who pays $2200.

However, it is not the case that $2200 to the person who has $11000 has the same value as one's life to the person who makes $110. Consequently, the claim that the flat tax is "fair" in the sense that "everybody pays the same percentage" is an argument that contains a seriously flawed assumption. It assumes that $1.00 to the person who has $100 is worth exactly the same as $100 to the person who has $10000.

Because there are certain necessitities to living - food, health care, energy - this is almost certainly false. The first few dollars a person makes are significantly more valuable than anything that counts as disposable income. Furthermore, this basic amount is not the same for all people. Some people need more health care than others. For example, some need medications that others do not need.

Fairness in this case is not grounded on intrinsic values. It is an argument grounded on relationships between states of affairs and desires - where desires provide reasons to promote the liking of various outcomes or procedures. There are many and strong reasons to promote disapproval of a procedure in which a person is deprived of the basics for a minimum quality of life. The term "unfair" is a prudent and effective way of promoting an aversion to that type of outcome.

A common argument that we hear in economic debates is that economic justice or fairness is not an output-type of fairness, but is a procedural fairness. As long as everybody plays by the rules of the free market, it does not matter what the results are. They are fair. This is true in the same way that if everybody obeys the rules of a game, it does not matter what the final score is - it was a fair game.

However, there is no intrinsic merit to procedural fairness either. There are only relationships between certain procedures and desires that give people reason to promote a fondness for some procedures and to acquire an aversion to others. The reasons for promoting a particular set of rules have nothing at all to do with their intrinsic moral quality - it has none. It has everything to do with the fact that the procedure is one that people generally have reason to cause others to like.

In a game, if the rules do not produce an entertaining (desire-fulfilling) outcome, it is a simple matter to change the rules. The same is true of the procedural rules for economic justice. If the rules as exist prevent the fulfillment of desires that could otherwise be fulfilled, the desires being thwarted are reasons to act to promote a different set of rules and to call it "fair" (or "just").

The claim that a procedure has an intrinsic value that can disregard outcomes - that can disregard the preventable suffering they cause or fail to prevent - is simply false.

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