Two Views on Luck and Redistribution

This one's mainly for political philosophy nerds. Here are some schematic thoughts…
Luck egalitarians argue that the essence of distributive justice is that the lucky compensate the unlucky. This has been an extremely popular view in academic political philosophy and it is also completely ridiculous. To me, at least. Luck egalitarianism strikes me as a kind of extreme desert conception of justice: material distribution should be in accordance with desert. But nobody really deserves anything, good or bad. All inequalities are due to luck, really. So once all the winners “compensate” all the losers, we arrive at something close to equal shares. I don't think this makes any sense at all absent a fatalistic hard-determinist conception of agency and responsibility, and no political philosophers actually seem to believe in that. But some of them do seem to believe in extreme luck egalitariansism, so that's a puzzle. I think it's motivated cognition. Psychologically, we start at the desirability of equal shares and we search toward a view that generates it.
It really is a weird view, and I think it's dying because it's fundamentally silly and rests on what David Schmidtz calls the Big Bang Fallacy — which is that if you didn't cause the origin of the universe, you don't deserve your attributes or the consequences of anything you have done. The peculiarity of luck egalitarianism is that it is so metaphysical.  Yet the idea isn't usually that the lucky everywhere should compensate the unlucky everywhere. It's that the lucky within a nation state should compensate their unlucky compatriots. But WTF? The nation state you happen to be born a citizen of is about the biggest piece of luck or unluck anyone ever runs into. If you're going to ground redistribution in strange metaphysical views about luck and desert, you've got to go all out and argue for immense global redistribution and not completely arbitrarily ignore the great good luck of having been born Dutch. If what you wanted to do is argue for bigger welfare payments from rich Dutch to poor Dutch, the hard-core luck egalitarian argument is way too strong.
A not-so-silly view about luck and redistribution is a “social insurance” view that is very prevalent in actual public policy, and which you'd think you'd see more defense of in actual philosophy, since it's quite amenable to standard contractualist forms of justification. In this view, a nation state is a kind of semi-voluntary (you can always move, but may not have better options) territorially-based mutual insurance scheme. People within the political jurisdiction form a sort of risk pool. There are defined a few socially insurable events such as a involuntary unemployment, a fall below a minimum income threshold, catastrophic illness, or what have you, and a schedule of benefits, tied to a variety of conditions for continuing payment, to help soften the blow of bad fortune. There are a number of advantages that accrue to the society as a whole from the presence of the insurance scheme in addition to the value of the insurance to individuals (an increase in entrepreneurial risk-taking, e.g.), so even those who happen to not need social insurance benefit from it and have reason to support it.
This is the standard classical liberal argument for a safety net. And it is quite plausible. It's so plausible that it's more or less what all successful societies do in one form or another.  So  I wonder why more folks on the academic left don't advance this kind of argument?
Could it be because a scheme of redistribution from the lucky to the unlucky that minimizes the harm from bad luck might do too little to limit the gains from good luck? Maybe. But that strikes me as a spiteful worry, hard to credit morally. What's the moral point of limiting the gains from good luck, once the downside of bad luck has been successfully limited?
By the way, I think Rawls gets incoherently stuck between hard luck egalitarianism (a lot of this work is due to him) and the social insurance view.  When you read Rawls as arguing that a system of stable social cooperation will have social insurance that limits the downside of risk, he's extremely plausible. When you read him as arguing that inequalities per se are dubious and have to be justified, since nobody deserves their parents, he's much much less plausible because he's appealing to a metaphysical theory of just distribution that has no place inside his contactualist justificatory structure.
Again, these are notes. Forgive the prose. I am probably repeating things other people have said better or which I have read and forgotten. Citations please.

Author: Will Wilkinson

Vice President for Research at the Niskanen Center

3 thoughts

  1. The problem is economics is not, and never was, a “science” in the generally understood meaning of the term. Economics intersects too much with politics to ever be considered purely scientific. The overlap with politics comes from the fact that people (and markets and economies) do not always behave as classical economic theory would suggest. There are no cast iron laws, only probabilities and moral choices. The libertarians’ favourite economist, Adam Smith, actually said all this in his ‘other’ great work, The Theory of Moral Sentiments’:
    “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.”

  2. Mr. Denmore is mostly right: economics, for fairly evident epistemological reasons, faces major problems in its claim to be a hypothesis-falsifying objective enterprise, aka ‘science’, though it certainly is and will remain a science in the sense of being a disciplined and useful pursuit of shared knowledge.
    Thus, economists who argue as if their work were scientific in the rigorous sense naturally end up in tedious debates based on incommensurable ontologies, exactly what the natural sciences (through great effort) have managed to avoid.
    In contrast, those economists who recognize that they can provide a rational and empirically-based disciplinary perspective on important events — not ‘objective science’, but, like history or sociology, a set of plausible and coherent explanations — can and should continue commenting on public policy related to their discipline. And, like all other contributions to political debate that rest on thoughtful, empirical, but epistemologically contingent assumptions, their contributions must be weighed in light of their assumptions and other understandings, aka ‘ideology’, and in light of their potential consequences in our current predicament.

  3. Economists aren’t professionals in the same sense as plumbers, surgeons, or airline pilots. Their level of professional achievement is uncorrelated to their ability to bring to bear what they’ve learned in their sub-specialties on the issues of the day, there is no yardstick for basic competence, and the consequences for being wrong are minor. Taleb’s takedown of the so-called “Nobel Prize” in economics covers this nicely. However, to your plaint, I’d suggest casting your net a little wider than perhaps you have already: a diverse group of non-academic bloggers (some of mysterious affiliation) have been smarter, right-er, and earlier on our current crisis. Like everyone, they have ideologies, but they spend less time than the “professional” economists defending tiny pieces of intellectual turf. I recommend Mish Shedlock at Global Economic Analysis , “Jesse” at Crossroads Cafe, and “Cassandra” (does Tokyo) for starters.

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