Chris Dillow usefully collects a number of pertinent Hayek quotes regarding the debate about income and desert.
I think it’s useful to clearly reiterate what Hayek’s argument about the connection between distibution and overall moral desert really is. I think this is basically the argument:
The setup:
Gather the names of everyone inhabiting a certain social order (pretend that there is some non-arbitrary way to draw the boundaries between orders or societies). On the first list, List A, order the names according to some standard of overall moral virtue or praiseworthiness, from most virtuous to least. On the second list, List B, order the names according to last year’s income, from high to low.
Conclusion:
If you pick a name at random, there will not be an especially tight correlation between its place on List A and List B.
Reasoning:
Income is determined for the most part by the supply and demand for different forms of labor, and the supply and demand for capital (which determines rates of return for those with savings or investments), and an individual’s overall moral merit has almost nothing to do with the overall supply and demand for labor and other forms of capital. If computer programmers are in short supply, for example, they will command high wages, whether or not they are saints or sinners.
That’s the argument.
Now, Hayek’s larger argument about social justice is that it is incoherent to look at List B and criticize it for failing to map onto List A, or to map onto any other list ordered according to whatever normative standard you like as long as the general system of rules (both formal and informal) is desirable.
And we should
“. . . regard as the most desirable order of society one which we would choose if we knew that our initial position in it would be decided purely by chance.”
Or
“The Good Society is one in which the chances of anyone selected at random are likely to be as great as possible.” [LLL, vol. 2, p. 132]
Now, crucially, there is nothing in this argument that says that Gary (picking a name from list B) did not deserve $50,00 in 2004. The argument is that it is incoherent to say that Gary deserves his ranking on List B, which is determined by Gary’s income, which happens to be $50,000, and the number of people who brought in a greater income.
Suppose Gary inhabits a fairly Good Society in Hayek’s terms. Now it turns out that Gary entered into an agreement with the Institute for the Study of Distributive Justice that says that Gary will be paid $50,000 over the course of 2004 if he completes a number of tasks to the satisfaction of the ISDJ. And he did complete these tasks to the satisfaction of the ISDJ. So Gary straightforwardly deserves, has a genuine moral claim on, exactly $50,000 from the ISDJ.
And the ISDJ pays, as justice requires. Now, Gary’s $50,000 earns him a certain place on List B. Suppose Gary is on line 1000 of List B (it’s a very small society). Does he deserve to be on line 1000? Hayek’s argument tells us that this is an ill-formed question; it contains a category error. As Will Munny so wisely observed in a different context, “Deserve’s got nothin’ to do with it.”
If the winds of supply and demand throughout the economy had blown differently, Gary might have moved up or down List B, and this obviously has nothing to do with anything Gary can take credit for. So there is something pretty contingent and normatively arbitrary about his rank on List B. A butterfly spits in a pitcher of lemonade and he moves up to line 1001. Whatever. Nonetheless, Gary really and truly morally deserves $50,000. But not from society, which makes no sense. Gary has no claim against you and your sister. He has a claim against the ISDJ, with whom he entered into an agreement within the context of the rules of a pretty Good Society. They owe him, because that’s the amount they agreed on, and Gary came through. He has it — the agreed-upon amount — coming.
Consider the programmers of PeopleSoft. They entered into an agreement and then performed so admirably at their tasks that Oracle paid a huge amount of money to acquire their company.
What was their reward? They got fired, 5000 of them.
The reward of a fixed amount of money for a job done in a short amount of time is fairly obvious point to make. What needs to be taken into consideration in the context of SS and taxes is people’s earnings over a lifetime.
Did they enter into an agreement to not get fired? That is, did their dismissal violate the terms of their labor contracts? If so, and if their employer did not compensate them according to the terms of the contract, then indeed, they did not get what they deserved. Someone didn’t follow the rules of the process, and that is an injustice, according to Will’s argument.
Why are such simple concepts so difficult for some people to understand?
Micha,
I think it’s because many people don’t think that what’s fair means people getting what they can as the result of their (and others’) voluntary activity.
I suspect that they think it means getting what they, or angels, think it would be nice to see (often equality of results; independent of talent and success). And if that means forcibly interfering with people’s plans, taking what they’ve earned, expecting them to respond to incentives in a way that people rarely do; then so be it. And when it doesn’t work…do it harder.
Perhaps they think something else. I’m not sure because it doesn’t make any sense to me.
Hayek’s argument here sounds very reminiscent of a Rawls-style veil of ignorance. Is that intentional? Anyone who’s better at Hayek than I am want to comment?
It’s worth mentioning that Hayek’s phrasing of “selected at random” vs. Rawls prior-free approach has huge normative implications. In Rawls’ case you get the maximin rule (if you like his logic), and in Hayek’s case, you presumably get a straightforward utilitarianism.
Bob, Yeah it’s intentional. Hayek gives props to Rawls at the end of the previous chapter. H
This sounds to me actually quite reminiscent of a Humean argument about the is/ought divide. Making judgements about one based on the facts of the other is making a sort of category mistake.
However, unless I’m mistaken, this argument seems to suggest that any morally relevant use of the word “deserve” is unjustified, whether we’re talking about deserving money or anything else. Except maybe for talk of “placement on list A”.
Interesting how all of this talk of desert settles around money and contracts. Will seems to argue as if money and contracts between two parties exist in a vacuum. In fact, “money” and “contracts” exist in a community.
This community has, over time, developed laws to arbitrate contracts, and methods to enforce them.
Furthermore, this community has implemented systems to regulate the value of those pieces of green paper we horde and shuffle around.
Now, to me at least, it is obvious that participants who use money and rely on contracts to motivate and enforce behavior have some sort of obligation to the community as whole; however, other than immigrants, few in US society have chosen to enter into a contract to fulfill those obligations.
Now, if Hayek’s notions of ‘fairness’ and ‘desert’ are centered around freely entered contracts, how does he deal with the obligations we owe society to provide an infrastructure that makes the practical use of these contracts a reasonable expectation?
Whenever people talk of philosophical terms, I head to the Stanford Encylopedia of Philosophy.
Owen Macleod’s article on desert there seems to bring up an interesting distinction between desert and entitlement.
“Clearly, entitlement thus understood is structurally similar to desert. For entitlement, like desert, is a three-place relation among an entitled subject, a basis of entitlement, and an object of entitlement. Also, as noted above, many objects of entitlement — vacations, punishment, replies to invitations — are also objects of desert. Furthermore, failure to treat in accordance with entitlement, like failure to treat in accordance with desert, can be an injustice. These considerations might lead some to conclude that there is a profound relationship between entitlement and desert.
Some might want to say that the relationship between desert and entitlement is extremely intimate. Indeed, the “institutional” theories of desert mentioned in Section 3 are precisely those that identify desert with some sort of entitlement. However, this proposed connection (identity) is a bit too intimate, for there are cases in which a person is entitled to something but doesn’t deserve it, and also cases in which what’s deserved isn’t something to which the person is entitled. For instance, the rules that govern the state lottery might entitle the winning ticket holder to one hundred million dollars, even if the lucky winner doesn’t deserve so much money. Or, it might be that everyone in the United States deserves free or affordable access to basic health care, even though there are no rules that entitle us to it. These cases suggest that if there is an interesting relationship between desert and entitlement, it isn’t identity.”
From this, one could make an argument that while we can make good arguments that people are ‘entitled’ to their income, they do not necessarily ‘deserve’ it.
Or we could argue the opposite: that although people governed by predatory regimes deserve a certain income, they are not legally entitled to it.
Entitlement, having title, is clearly a legalistic, institutional notion. Desert is more basically moral. But you can think of morality as a kind of institution as well. In these terms, desert is moral entitlement. And, naturally, a system of legal or political institutions may fail to adequately reflect the institution of morality. In which case legal and political entitlements may fail to track our moral entitlements, i.e., respect what we deserve.
Will you say
Or we could argue the opposite: that although people governed by predatory regimes deserve a certain income, they are not legally entitled to it.
We could. Indeed, some have. But in order to do that, you have to have some sort of super-structure to appeal to — some sort of implicit contract that we all have ‘agreed’ to at birth. It seems to me that some people here are arguing against the existence of this ‘angelic’ contract.
Where do you think Hayek stands on this issue? Where do you?
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Consider the programmers of PeopleSoft. They entered into an agreement and then performed so admirably at their tasks that Oracle paid a huge amount of money to acquire their company.
What was their reward? They got fired, 5000 of them.
The reward of a fixed amount of money for a job done in a short amount of time is fairly obvious point to make. What needs to be taken into consideration in the context of SS and taxes is people’s earnings over a lifetime.
Did they enter into an agreement to not get fired? That is, did their dismissal violate the terms of their labor contracts? If so, and if their employer did not compensate them according to the terms of the contract, then indeed, they did not get what they deserved. Someone didn’t follow the rules of the process, and that is an injustice, according to Will’s argument.
Why are such simple concepts so difficult for some people to understand?
Micha,
I think it’s because many people don’t think that what’s fair means people getting what they can as the result of their (and others’) voluntary activity.
I suspect that they think it means getting what they, or angels, think it would be nice to see (often equality of results; independent of talent and success). And if that means forcibly interfering with people’s plans, taking what they’ve earned, expecting them to respond to incentives in a way that people rarely do; then so be it. And when it doesn’t work…do it harder.
Perhaps they think something else. I’m not sure because it doesn’t make any sense to me.
Hayek’s argument here sounds very reminiscent of a Rawls-style veil of ignorance. Is that intentional? Anyone who’s better at Hayek than I am want to comment?
It’s worth mentioning that Hayek’s phrasing of “selected at random” vs. Rawls prior-free approach has huge normative implications. In Rawls’ case you get the maximin rule (if you like his logic), and in Hayek’s case, you presumably get a straightforward utilitarianism.
Bob, Yeah it’s intentional. Hayek gives props to Rawls at the end of the previous chapter. H
This sounds to me actually quite reminiscent of a Humean argument about the is/ought divide. Making judgements about one based on the facts of the other is making a sort of category mistake.
However, unless I’m mistaken, this argument seems to suggest that any morally relevant use of the word “deserve” is unjustified, whether we’re talking about deserving money or anything else. Except maybe for talk of “placement on list A”.
Interesting how all of this talk of desert settles around money and contracts. Will seems to argue as if money and contracts between two parties exist in a vacuum. In fact, “money” and “contracts” exist in a community.
This community has, over time, developed laws to arbitrate contracts, and methods to enforce them.
Furthermore, this community has implemented systems to regulate the value of those pieces of green paper we horde and shuffle around.
Now, to me at least, it is obvious that participants who use money and rely on contracts to motivate and enforce behavior have some sort of obligation to the community as whole; however, other than immigrants, few in US society have chosen to enter into a contract to fulfill those obligations.
Now, if Hayek’s notions of ‘fairness’ and ‘desert’ are centered around freely entered contracts, how does he deal with the obligations we owe society to provide an infrastructure that makes the practical use of these contracts a reasonable expectation?
Whenever people talk of philosophical terms, I head to the Stanford Encylopedia of Philosophy.
Owen Macleod’s article on desert there seems to bring up an interesting distinction between desert and entitlement.
“Clearly, entitlement thus understood is structurally similar to desert. For entitlement, like desert, is a three-place relation among an entitled subject, a basis of entitlement, and an object of entitlement. Also, as noted above, many objects of entitlement — vacations, punishment, replies to invitations — are also objects of desert. Furthermore, failure to treat in accordance with entitlement, like failure to treat in accordance with desert, can be an injustice. These considerations might lead some to conclude that there is a profound relationship between entitlement and desert.
Some might want to say that the relationship between desert and entitlement is extremely intimate. Indeed, the “institutional” theories of desert mentioned in Section 3 are precisely those that identify desert with some sort of entitlement. However, this proposed connection (identity) is a bit too intimate, for there are cases in which a person is entitled to something but doesn’t deserve it, and also cases in which what’s deserved isn’t something to which the person is entitled. For instance, the rules that govern the state lottery might entitle the winning ticket holder to one hundred million dollars, even if the lucky winner doesn’t deserve so much money. Or, it might be that everyone in the United States deserves free or affordable access to basic health care, even though there are no rules that entitle us to it. These cases suggest that if there is an interesting relationship between desert and entitlement, it isn’t identity.”
From this, one could make an argument that while we can make good arguments that people are ‘entitled’ to their income, they do not necessarily ‘deserve’ it.
Or we could argue the opposite: that although people governed by predatory regimes deserve a certain income, they are not legally entitled to it.
Entitlement, having title, is clearly a legalistic, institutional notion. Desert is more basically moral. But you can think of morality as a kind of institution as well. In these terms, desert is moral entitlement. And, naturally, a system of legal or political institutions may fail to adequately reflect the institution of morality. In which case legal and political entitlements may fail to track our moral entitlements, i.e., respect what we deserve.
Will you say
Or we could argue the opposite: that although people governed by predatory regimes deserve a certain income, they are not legally entitled to it.
We could. Indeed, some have. But in order to do that, you have to have some sort of super-structure to appeal to — some sort of implicit contract that we all have ‘agreed’ to at birth. It seems to me that some people here are arguing against the existence of this ‘angelic’ contract.
Where do you think Hayek stands on this issue? Where do you?