The other day, I seem to have upset lots of people by claiming that fairness is a poor grounds for debate unlike productivity. My evidence for that was the question over whether the Coalition’s Paid Parental Leave Scheme was fair — Labor says it isn’t, the Coalition (and Peter Martin) says it is and I said that they are all incoherent on this point. While productivity too can mean different things in different contexts it at least has an undisputed definition of what is “not productive” given to us by Pareto. As my children often learn, any proposed definition of “not fair” can come back to bite them.
Anyhow, as I was concentrating on PPL I didn’t really spend much time on fairness itself. For that, the clearest statements have come from Scott Adams so I thought I’d quote them here to get people thinking.
I often laugh when someone declares a thing to be fair. Fairness is a funny illusion. It’s one of our most useful illusions, but it’s an illusion nonetheless.
Imagine trying to “fairly” divide ten identical marbles between two kids. You could give five marbles to each kid, wave your arms and declare it fair. The kids would probably agree with this arrangement. The illusion of fairness works.
Is five marbles apiece actually fair?
Don’t you need to know how many marbles each kid already owns? What if one kid has a thousand and the other has none? The marginal utility of an extra marble is much higher for the marble-poor kid.
Doesn’t their different level of enthusiasm for marbles come into play? If you think about it, you’re trying to be fair with their happiness, not their marbles. What if one kid loves marbles five times more than the other? In that case, the fair thing to do is give most of the marbles to the kid who doesn’t enjoy them as much. He needs more marbles to obtain the same level of happiness as the marble lover gets with one. Of course that solution would cause one kid to melt down because it wouldn’t have the illusion of fairness.
Even the simplest example of fairness falls apart when you put it under scrutiny. Luckily, people are morons, so they imagine fairness where none exists. Otherwise nothing would ever get done.
As I’ve said before, fairness is a concept invented so dumb people can participate in debates. Fairness isn’t a natural law of the universe. It’s a psychological problem.
We sometimes get fairness confused with equality. Equality is usually good, and can often be measured with a satisfying precision. Fairness, on the other hand, is usually just a rationale for some sort of bias.
To demonstrate my point that fairness is about psychology and not the objective world, I’ll ask you two questions and I’d like you to give me the first answer that feels “fair” to you. Don’t read the other comments until you have your answer in your head.
Here are the questions:
A retired businessman is worth one billion dollars. Thanks to his expensive lifestyle and hobbies, his money supports a number of people, such as his chauffeur, personal assistant, etc. Please answer these two questions:
1. How many jobs does a typical retired billionaire (with one billion in assets) support just to service his lifestyle? Give me your best guess.
2. How many jobs should a retired billionaire (with one billion in assets) create for you to feel he has done enough for society such that his taxes should not go up? Is ten jobs enough? Twenty?
Make sure you have your answers before reading on.
I thought of this question because I heard an estimate of how many families a particular billionaire supports. The estimate was a hundred. If you figure an average family is 2.5 people, one billionaire is supporting 250 humans. He gets a lot in return, of course, but what struck me is how this number affects my feeling of fairness. When I hear that one person is supporting 250 non-relatives, plus a number of relatives too, it feels as if that billionaire is doing more than his “fair” share. But as I’ve said, fairness isn’t a real thing. It’s just a psychological phenomenon that is easily manipulated.
My personal view is that if most credible economists say higher taxes on the rich are necessary to save the economy, I’m all for it. I think every rich person would agree with that statement. The question that matters is whether taxing the rich will help or hurt the economy. Fairness should be eliminated from the discussion.
I was using the same tricks to break apart arguments on PPL. If the benchmark was strong it shouldn’t be that easy. And it isn’t easy when it comes to using productivity or, for that matter, equality which is a very precise quantitative definition.
In Australia, we are on somewhat safer ground with “fair go” but I would urge everyone to move away from fairness and when we see a politician or someone else not doing so, to pick it quickly to shreds.