Comments on: A Hypothetical Contract with People You Cannot Escape

By: fast cash

fast cash — Mon, 17 Nov 2008 12:21:08 +0000

when the problem is to produce such goods in the first place. Assuming that the good exists is hardly a solution to the problem of how to produce it. Similarly, by excluding exit or choice among options as an option, the problem of distribution of rights and obligations is

By: fast cash

fast cash — Mon, 17 Nov 2008 04:21:08 +0000

By: David Johnston

David Johnston — Wed, 08 Oct 2008 07:29:30 +0000

This may be unrelated to payday loans, but this is something that deserves attention. Washington Mutual, recently purchased by J.P. Morgan Chase in the largest bank failure in US history, disclosed $8.1 billion in debt, and $32.8 billion in assets. Once depositors started to withdraw about $16.7 billion over eight days, Washington Mutual had a “liquidity problem.” According to Wikipedia, a “liquidity crisis occurs when a business experiences a lack of cash that is required for day to day operations, or meet debt obligations when due.” All J.P. Morgan had to pay to acquire Washington Mutual was $1.9 billion in an FDIC auction, and put themselves in a position to decide Washington Mutual’s future, and out of the FDIC’s hands. The FDIC would have had to pay billions out to insured customers of Washington Mutual, and many think that would have drained the FDIC’s own funds down to dangerous levels. J.P. Morgan Chase has assured Washington Mutual customers that it will be business as usual. However, with more and more bank failures looming over the horizon, how long will it last for? Payday advance is a mere drop in the bucket when compared with these events.

By: Contra Rawls « O Intermitente (R)

Contra Rawls « O Intermitente (R) — Fri, 07 Mar 2008 10:39:36 +0000

[...] comentários de Will Wilkinson Nota2: “Why I am not a Rawlsian” de Tyler [...]

By: JA

JA — Thu, 06 Mar 2008 19:42:42 +0000

Will, thought you might find this interesting (from Marc D. Hauser, Moral Minds, HarperCollins Publishers, New York (2006).

Citing the studies of Norman Frohlich and Joe Oppenheimer: “Just as Rawls predicted, subjects readily settled on a principle of fairness. But the winning principle was not quite as Rawls predicted. No group selected the difference principle, where distribution is anchored by the worst off. Instead, groups settled on a principle that maximized the overall resources of the group while preventing the worst off from dropping below some preestablished level of income. This principle provides a safety net for those who are disadvantaged, for whatever reason, while allowing for extra benefits to flow toward those who contribute more to society.” Pg. 88

“Attitudes toward these principles were high, and showed little change over the course of the experiment. However, when subjects had the freedom to choose, and vote unanimously, their satisfaction and confidence in the principle were significantly higher than when the same principle was imposed on them. The average-income [maximizing] -and-floor principle emerged as the clear winner. As a principle, it was stable after multiple iterations of the work-pay-redistribution cycle, but functioned to instill confidence in people, both those at the top and those on the floor. Contrary to many current political analyses, an income-distribution principle that allows for inequalities while taking care of those who are most in need does not reduce incentives to work hard, nor does it create a sink of free riders…Those who received from other players, and who actively participated in deciding the best principle, almost doubled their efforts in order to contribute to the overall income. In contrast, those working under the same regime, but with the principle imposed, cheated and decreased their efforts, because they perceived redistribution through taxes as their right.” Pg. 89

I’d say more, but I’m trying to save it until it’s ready to release all at once.

By: JA

JA — Thu, 06 Mar 2008 19:42:00 +0000

Will, thought you might find this interesting (from Marc D. Hauser, Moral Minds, HarperCollins Publishers, New York (2006).

I’d say more, but I’m trying to save it until it’s ready to release all at once.

By: Matt

Matt — Thu, 06 Mar 2008 15:59:15 +0000

I don’t want to comment on what the paper says until I read it, and I fear that if I comment more now I might be going to much into side issues, but my impression here is that this is mistaking what goes on in the first stage of the four-stage original position with what happens in the real word. That’s a common confusion but a confusion nonetheless. But, maybe that’s not what’s happening. When I have a chance to read the paper I’ll let you know what I think. Thanks for bringing it to my attention.

By: Matt

Matt — Thu, 06 Mar 2008 15:59:00 +0000

By: Will Wilkinson

Will Wilkinson — Thu, 06 Mar 2008 14:09:15 +0000

Matt, That fits my sense of what the closed society assumption is for. But then that pretty obviously runs us into G.A. Cohen land, doesn’t it? The thought experiment is constructed to rule out “to each according to his threat potential” by ruling out exit, but for some reason we allow the possibility that talented people will withdraw their labor at high levels of taxation as a consideration in formulating our principle of justice. Why? What’s the difference? It seems that if Rawls is consistent, he faces a dilemma: either Cohen-esque egalitarianism or free markets with large bargaining asymmetries. Which is exactly Tom’s point. Settling on justice as fairness depends essentially on permitting economic exit but disallowing political exit, but there is no non-arbitrary reason to treat the two differently.

By: Will Wilkinson

Will Wilkinson — Thu, 06 Mar 2008 14:09:00 +0000