A collage of images, featuring most prominently a person holding a sign reading "no justice no peace"

Category: Economics

Democracy / Distribution / Economics / Governance

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Sacrificed for hope?

Sacrificed for hope?

Economic transition and intergenerational justice

« Poverty and oppression are here, and they will not

be alleviated by the possibility of a better future.”

Adam Przeworski

Suppose you believe that the nationalization of the means of production is necessary for the achievement of justice. Suppose, besides, that your political party enjoys enough popular support (an absolute majority) for this radical reform. Yet you know from experiences in other countries that such radical reforms engender an economic crisis, with higher unemployment and lower incomes. What you do not know is how the economy is going to fare in the future and how long the crisis can last.

These are a lot of assumptions, certainly, but please accept them for the sake of the argument. What I am asking you is to put yourselves into the shoes of western European socialist leaders from the first half of the 20th century. They faced both a strategic and an ethical dilemma. (more…)

Economics / Old Blog

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Beneficial competition or attack on legitimate interests: What to make of Uber’s disruption of the taxi industry?

Imagine you are standing on the street and waiting for a taxi to take you home. While you are having second thoughts as to whether the convenience of a taxi ride is really worth the cost, a private car stops in front of you and the person at the steering wheel offers to drive you home for a price significantly below the taxi rate. Once you have convinced yourself of the driver’s competence and reliability, what could possibly speak against accepting the offer? Not much, it may seem.

Granted, the scene just described may appear too unrealistic to merit serious ethical reflection. In cities around the world, however, smartphone technology has recently led to a surge of structurally similar situations. Ride-hailing platforms that act as brokers between private drivers and potential clients have been experiencing rapid growth and offer rates that are often below those of established taxi industries. Uber, the most prominent example, has extended its operation to 54 countries and has created headlines by attracting more than $2bn of investment during the last two years. In many places, however, this expansion has been accompanied by fervent political controversy, and in a number of jurisdictions regulatory opposition has brought Uber’s operation to a halt.

Some of the criticisms voiced in opposition to Uber reflect concerns that seem relatively uncontroversial. For example, the enforcement of adequate safety standards in cars (including mandatory liability insurance for drivers) and appropriate forms of taxation appear to represent valid objectives, both from the point of view of public interest and in terms of ensuring a level playing field in Uber’s competition with traditional taxi providers. At the same time, these objectives do not necessarily conflict with Uber’s business model. Assuming that drivers are subject to the same safety and tax requirements as traditional taxi providers, Uber may still be able to offer lower fares. In the following, I would like to consider two additional concerns that are more fundamentally connected to the way Uber operates and that also seem more difficult to evaluate.

The first concern relates to the interest of drivers that rely on their job as a primary source of income. One of the prominent complaints of taxi associations has been that Uber’s competition threatens the ability of professional drivers to make a living from their occupation. While Uber argues that its drivers are able to achieve incomes far above the average income of taxi drivers, protests by Uber drivers cast doubt on the generalisability of this claim. Moreover, recent data shows that the majority of drivers do not treat Uber as their main source of income, which in turn may contribute to the preparedness of Uber drivers to work for lower rates. If it is indeed the case that Uber’s business model poses a threat to the interest of drivers in being able to make a living from their occupation (be it in the traditional taxi sector or after a switch to Uber), does this interest provide a legitimate basis for banning Uber?

On the one hand, Uber would appear to exemplify the general potential of freelance working arrangements to erode income levels. Given that earnings in the established taxi industry are already at the low end of the income spectrum, we may think that, if anything, policy should aim at improving wages in the taxi industry, e.g. through appropriate minimum wage legislation, rather than allowing income levels to be threatened by Uber’s business model which, in virtue of treating drivers as individual contractors, is not bound by wage regulations. On the other hand, the interest to make a living from taxi driving would have to be defended against the interest of those who are willing to offer their service at a lower price, if only as a partial source of income, and would be prevented from doing so through an ban of platforms such as Uber. Such a defence, it seems to me, cannot necessarily be taken for granted. A judgment on the issue would have to take into account the level of material well-being and the occupational alternatives of both groups.

Setting aside the interest of drivers, the second concern may be cast in terms of public or general interest. While taxi rates are legally regulated, ride-hailing platforms are free to set their prices according to demand and supply. Uber, for example, relies on rate increases in times of high demand in order to incentivize additional drivers to offer their services. As a result, on holidays or in situations of emergency, fares can increase up to fourfold, to levels far above standard taxi rates. Regulated taxi fares, in contrast, may be thought to serve an important public interest in the availability, in general, of rides at rates that are affordable for a relatively wide section of the population. To the extent to which the success of Uber and other ride-hailing platforms leads to an erosion of the supply of fix-rate taxis, people with urgent transportation needs may find themselves in situations without affordable options.

Is the interest in affordable rides compelling enough to justify a ban on unregulated services such as Uber in order to protect the supply of fix-rate taxis? The answer to this question does not seem obvious either. Among the countervailing interests to consider are the interests of customers who would take advantage of Uber’s service during times at which fares are below the taxi rate. Among them are equally going to be people with urgent needs, some of whom may in fact not be able to afford the regulated taxi fare. And to the extent to which the taxi fare is affordable for them, can they be expected to effectively subsidise the rides of others? One consideration that seems clearly relevant here is the existence of alternative modes of transportation that may serve to protect the interest in generally available affordable transportation. An answer thus appears even more context-dependent than in the case of the first concern. What do you think?

Democracy / Economics / Gender / Old Blog

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Defending Quotas

 
 
We live in a society that contains severe gender injustice. One way in which to combat this injustice is via the use of quota policies. A quota policy is a policy that requires that members of certain specified groups to make up some stipulated minimum complement of an organisation or group of organisations. For example, we may require women to constitute at least 40% of non-executive board directorships. The use of quotas can be a highly effective tool for changing or maintaining the make-up of an organisation or group of organisations, especially when accompanied by harsh penalties for non-compliance with the quota policy.
Despite these credentials, the use of quota policies remains hotly contested and highly controversial. Indeed, the use of quota policies has been much more politically and constitutionally controversial than the use of other affirmative action policies, such as those that involve giving greater weight to applications from members of certain specified groups. I take it that part of the reason for this is that quota policies run the risk that worse candidates will be hired at the expense of better candidates. In other words, quota policies risk being genuinely discriminatory. The same risk does not arise with respect to policies that give greater weight to applications from members of certain specified groups. This is because the purpose of this greater weight can plausibly be seen simply as counterbalancing the effects of certain discriminatory norms, such as gendered social norms.
Even though quota policies risk being genuinely discriminatory, I believe that we should be prepared to defend their use. To this end, I shall make two points. First, as I have suggested, quotas can be highly effective, much more so than other affirmative action policies. As an illustrative example, let’s consider ‘reaction qualifications’ – that is, qualifications that a candidate possesses by virtue of others’ reactions to them. One stubborn way in which sexist discrimination occurs is when an employer rejects a female candidate’s application on the basis of how it is expected other people (other staff, customers, etc.) would interact with her. A quota policy provides a way in which effectively to challenge the effect of reaction qualification. Here, I agree with L. W. Sumner, who writes:
An employer who needs to hire women in order to meet a stipulated quota will be less likely to worry whether this particular woman is too pushy, or will not be a good team player, or is likely to get pregnant, or whatever. Although numerical quotas will come as an acute shock to many employers, I know of no other way to concentrate their minds as wonderfully on the genuine qualifications of female job candidates (214).
Second, the defence of the use of quota policies is strengthened if we can offer a reply to those who resist their use on the grounds that they run the risk that worse candidates will be hired at the expense of better candidates. This objection is typically put in terms of an appeal to rights and, in particular, the rights of the best qualified candidates. One fundamental problem with this objection is that it is insufficiently sensitive to costs that are imposed by the absence of a quota policy. At least in the short run, the alternative to the introduction of a quota policy is the survival of unjust discrimination, which leads to widespread rights violations. In short, if my first point in defence of the use of quota policies is correct, then we should conclude that there is no way to avoid imposing morally objectionable costs, at least in the short run. This is important as I think we should prefer imposing costs, as quota policies do, with the aim of minimising these costs in the long run, by moving towards a more just society.
To be sure, I do not claim that the use of quota policies is sufficient to end gender injustice. No doubt that, in addition to quota policies, we must pursue other goals to combat the causes and effects of gender injustice, such as challenging certain gender stereotypes and restructuring socio-economic institutions to protect greater and more equal opportunities. Nor do I claim that the use of quota policies is always necessary. In some cases, a quota policy may be futile and, if this is the case, it may risk being harmful. I support the more modest claim that we should in principle be prepared to use quota policies to combat gender injustice; that is, I believe that the quota policy is a legitimate weapon in our arsenal.  

 

Economics / Old Blog

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Can Grading Love & Care be an Injustice?

Can grading love and care (and other goods) be an injustice?
It is a widespread intuition that some things in life cannot and should not be measured. For example, quantifying our love for a partner seems problematic. We do not want to rate our affection on a scale of 0-100.*  It is an important question, though, whether we can have a complaint of justice about measuring certain goods.  Here I consider two lines of argument for thinking that measuring certain things in quantifiable terms can be objectionable.
The first is indirect. It concerns unjust effects of things being measured that were not measured previously. An example is the measurement of the willingness to pay for parking spaces, which Joshua Kopstein recently discussed. Some start-up companies have developed apps through which people bid for spare parking spaces. Kopstein suggests that this system turns a public good into a private good that is allocated according to willingness and ability to pay, thus privileging the rich. This example does suggest that certain kinds of measurement can lead to complaints of justice, if they introduce an allocation mechanism that is not appropriate for the good. But in such cases it is the possibility of wrongful use, not the measuring itself, that can be criticized.
The second way in which measuring could raise complaints of injustice is more direct. Consider a stylized example. Assume that elderly relatives have a legitimate claim to receive some acts of love and care from younger family members. Assume that a start-up company develops an app that evaluates family members, on a score from 0 to 100, on how well their acts deliver care to elderly relatives. And assume that using the app becomes a social trend, such that most people start using it. This might have some beneficial effects. For example, it might become easier to share knowledge about how to cheer up grandma “efficiently” when she is gloomy. But could it also mean that what the elderly relatives receive are not, any longer, acts of love and care, but something else: acts calculated to enhance the wellbeing of elderly relatives? If this is the case, it seems that they could raise a claim of justice. They are denied what they have a legitimate claim to receive. Schematically put, they have a legitimate claim to good X (love and care), but what they receive is good Y (acts that will efficiently enhance wellbeing), because by measuring and quantifying X, it is transformed into Y.
One problem here is whether we can specify a sufficiently clear and plausible account of what good X is and why good Y is different from it.** One possible issue might be that good X is a complex and multi-dimensional good, but by measuring it, we necessarily reduce it to fewer dimensions. Although modern technologies offer increasingly sophisticated ways of measuring things, they still cannot capture all the dimensions of what it means, for example, to have a trusting and loving relationship with someone. Another issue could be that offering good X requires openness to new challenges or a certain degree of spontaneity. Again, these cannot be easily captured in quantitative terms and are, thus, likely to be excluded if one tried to measure X. For example, an important aspect of a loving relationship is that one is sensitive to subtle changes in the other person’s situation, and maybe even that one understands such changes before the person herself fully understands them. It is therefore unclear how they could be included in quantitative measures.
Certain forms of measurement may be simply dysfunctional. In finance, there is Goodhart’s law: “When a measure becomes a target, it ceases to be a good measure.” This might also hold for other areas and make it simply unwise to try to utilise measurements there. But in additional to dysfunctionality, we should not exclude the possibility that measuring certain things may be an injustice.  At least in the case of care and love, it seems there is reason to believe that that is the case.
*In Dave Egger’s The Circle there is an episode in which one of the protagonist’s lovers asks for an evaluation of his qualities, on a scale from 0 to 100, directly after the sexual act. The protagonist is somewhat startled, and then resorts to a white lie.
**Aspects of this question have been explored in the debate about limits of the market, where one concern is whether the socially defined “meaning” of goods can be a basis for not measuring goods in market terms. See for example Debra Satz’s discussion of Elizabeth Anderson’s approach in her Why Some Things Should Not Be For Sale.

Distribution / Duties / Economics / International / Old Blog / Rights

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Taxing FIFA: Asides from having their board room modelled on the war room from doctor strangelove, are there any other reasons as to why FIFA should be taxed?

Some have called it the best football World Cup ever. And it has indeed been incredibly exciting.[1]Yet the circumstances which brought us the event (and will bring us future ones) are very troubling. For a year now, there has been widespread anti-World Cup protests and riots in Brazil crying against the high cost of the event for Brazilian citizens. Investigationshave revealed the slave conditions migrant workers building the 2022 World Cup infrastructure are subject to in Qatar. At the same time, there has been renewed criticism directed at FIFA, football’s international governing body. There are corruption scandals, FIFA’s dismissive attitude to the Brazil riots, their inaction on the Qatar front, and then there is the tax issue.
FIFA demands from any country who wishes to bid for hosting the world cup full tax exemptions for itself and its subsidiaries and tax breaks for its official sponsors. Estimates are that tax exemptions in Brazil, for instance, will cost up to half a billion dollars.  To many this sounds outrageous (see video).  And so it does to me.
John Oliver on Last Week Tonight tells us perfectly why we should hate FIFA
But why exactly is it outrageous?
Some, including FIFA and the Brazilian government, have argued that the country hosting the World Cup stands to greatly benefit economically from the infrastructure investments and tourism, a benefit that surpasses the amount of tax exemption in question.  Whether such forecasts about the benefits to the host country are correct is highly contestedas these rosy forecasts do not take into consideration many indirect social and economic costs (worker deaths, security costs, crowding out other tourists, etc…)An indication that hosting events such as the World Cup is unattractive even to the richer countries is the fact that only three European countries bid to host to the European Championship in 2020.

But is the issue only a question of mutual benefit? Surely we don’t expect countries to provide corporations or investors with full scale tax exemptions on the account that they generate net benefits to the economy. Countries are perhaps often forced to provide incentives for investors and corporations due to tax competition but this is reason to call for more global tax harmonization. And whereas companies and investors competing against one another may, in at least some way, be justified to seek conditions that render them competitive FIFA has no competitor. It is the sole body responsible for organizing the World Cup. And, it is a non-profit organisation.
Perhaps it being a non-profit organization can actually justify the tax exemption. After all , it is common, and we often think laudable, to exempt non-profit organization from taxes. The fact that FIFA actually makes a lot of profit (in 2012 it was $ 89 million)  often raises eyebrows, but I don’t think this is in itself the issue. What makes an organization non-profit is not that it doesn’t make profit but that it does not distribute its profits or dividends to shareholders and instead uses its profits to further achieve or promote its goals.

We definitely have some good reasons to exempt some non-profit organizations from taxes irrespective of the profit they make or the net economic benefit that accrues from their activities. We do, for example, want to have organizations that track human rights abuses. Evidence that they make huge profit or that their net financial benefit locally or internationally is negative is not reason against exempting them from taxes as long as we know that their profits are being invested to pursue their aims. To the contrary, the more profit they make the better!
Protecting and tracking human rights abuses is an aim we want to pursue even at a large financial cost. Yet, it is not clear that this applies to the variety of aims pursued by the variety of non-profit organisations. It is certainly not clear when it comes to FIFA whose aim is to promote sports and football. Yes, there are the commitments to anti-racism and anti-discrimination, but there is little done to prove them more than slogans. Perhaps if serious effort were being done to promote those aims; if FIFA for instance were to be a driver for labor law reforms in countries like Qatar; or if it were successful in promoting other humans rights (say the right of children in poor countries to play in safe environments) then this could be good reason to exempt them from taxes. That said, even if such were the case, the tax burden ought not to fall on the hosting country but be fairly distributed on the international community.
Absent such aims, the question of whether promoting football is a ‘worthy’ pursuit, perhaps like the question of promoting some forms of art, ought to be settled democratically. This would exclude non-democratic countries from bidding for the world cup, but that doesn’t strike me as an outrageous conclusion.

[1] Until the last of three teams I supported returned home, that is.

Duties / Economics / Gender / Old Blog

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Does systemic injustice justify Robin Hood Strategies?

Does systemic injustice justify Robin Hood strategies?
Many injustices arise because of patterns of behaviour, single instances of which seem harmless or at least pardonable. For example, if professors help the kids of their friend get access to university programs – and given the fact that professors and their friends tend to come from the same socio-economic background – this can lead to structural discrimination against applicants from other backgrounds (as discussed by Bazerman and Tenbrunsel here, p. 38-40). Other examples concern implicit biases against women and ethnic minorities. Much work has been done recently that helps us to understand how these mechanisms work (see e.g. here). Given how pervasive these mechanisms are, it is understandable that they cause moral outrage. The question is, however, what individuals should do in reaction to them.
Imagine that you are in a situation in which you have some amount of power, for example as a reviewer or as a member of a search committee. You might be tempted to use a “Robin Hood strategy”, i.e. a strategy that breaks the existing rules, for the sake of supporting those who are treated unjustly by these rules. Given how structural injustices work, many such “rules” are not formal rules, but rather informal patterns of behaviour. But it is still possible to work against them. For example, could it be justified to reject male applicants not because of the quality of their applications, but because they are white and male and come from a rich Western country?
One has to distinguish two levels of what such a strategy could imply. The first concerns correcting own biases that one might have, despite all good intentions (to check them, the various tests offered by Harvard University on this website can be helpful). The best way to do this, if possible, seems to be anonymity. When this is not feasible, the alternative is to scrutinize one’s patterns of thought and behaviour as best one can. The more power one has, the more it seems a requirement of justice to do this.
This is different from a second level of Robin Hood strategies, for which the name seems more appropriate: these concern not only own biases, but biases of the system. The idea is to work against them on one’s own, in one’s little corner, maybe hoping that if enough of us do this, the problems can be solved or at least attenuated. Could this be a defensible strategy?
The problem is, of course, that one risks introducing new injustices. One consciously deviates from what are supposed to be the criteria of selection, for example a candidate’s performance in previous jobs or the likelihood of being a good team member. In some cases, however, it is reasonable to assume that if a candidate comes from a group that suffers from discrimination, achieving the same level of merit as a candidate from another group takes much more effort. So according to this argument, and as long as these problems are not recognized by the official selection criteria, it seems defensible to privately factor in these previous structural inequalities.
But one’s epistemic position in judging such cases is often a weak one. For example, standard application material for many jobs includes a CV and some letters of reference. These materials are often insufficient for understanding the details of a specific case and the degree to which discrimination or stigmatization might have had an impact on the candidate’s previous career. One risks making mistakes and importing one’s own subjective biases and prejudices; taken together, this can make things worse, all things considered.
Robin Hood strategies do not provide what seems most needed: good procedures and public accountability. They do not get at the root of the problem, which is to create collective awareness of the issues, and to find collective mechanisms for addressing them (the gendered conference campaign is an example). Collective mechanisms are not only likely to be more effective, they also bring things out into the open, and create a public discourse on them. Although public discourses also have their weaknesses, there is at least a chance that the better argument will win, and there are opportunities for correcting what end up misguided strategies. Robin Hood strategies, in contrast, fight fire with fire: they remain within a logic of power, trying to find ways in which one can use counter-power to subvert the dominant power elites. But this does not change the fundamental logic of the game.

Thus, our preferred strategies should be different ones: strategies that really change the logic of the game, openly addressing problematic patterns of behaviour and looking for collective – and maybe formally institutionalized – solutions. Nonetheless, and despite all the reasons mentioned above, I cannot bring myself to thinking that Robin Hood strategies can never be justified in today’s world. Of course one has to be very careful with them, not only with particular cases, but also with regard to the slippery slope one might get onto. But are they ruled out completely? What do you think?

Economics / Education / Old Blog

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Should Teaching be Open Access?

Many universities have begun making teaching material freely available online. In 2012 the UK’s Open University launched a platform, FutureLearn, where one can take a ‘Massive Open Online Course’, from a substantial range offered by 26 university partners and three non-university partners. There are also providers in America, Asia, and Australia.  Meanwhile, some universities – Yale is a prominent example – simply place recordings of their modules on a website, many collated at iTunesU, and, indeed, one can watch some directly via YouTube, including Michael Sandel’s course on justice:
These developments raise various ethical questions.  Here is a central one: why, if at all, should teaching be open access?  I suspect that the answer to this question depends on the kind of teaching and what precisely is meant by ‘open access’. Thus, (leaving open whether the arguments are generalizable) here I will consider a narrower suggestion: all university lecture series (where feasible) should be freely available online. Here are two reasons that speak in favour of this idea.
First, people (worldwide) should have the opportunity to know what is known. Knowledge is both intrinsically and instrumentally valuable and university lecture series are one (important) place where knowledge is housed. These points alone suggest there is some reason to give people access where possible. (Similar thoughts can be advanced in favour of internet available commons, such as Wikipedia or the Stanford Encyclopedia of Philosophy, as discussed previously on this blog). Perhaps there are cases in which access to certain knowledge must be restricted – certain intelligence information during a just war, for example. But the vast majority of information delivered through university courses is harmless (in that sense) and granting access to it would simply mean granting access to cutting edge research in a form engineered for easy consumption.
Second, the move could have a (Pareto-efficient) egalitarianising effect on university education. To wit, by giving students access to lectures from courses similar to those on their own degree, we might reduce various differences in educational and developmental opportunities that exist between attendees of different universities. Benefits would include better access to teaching more suited to one’s learning style and better accessibility for a more diverse range of users, points often emphasised about digitalising learning materials.
Here, meanwhile, are responses to some worries and objections:
Who would pay for it? The exercise would be fairly costless: many universities are already equipped with the necessary facilities and posting lectures online is fairly straightforward. In that sense, it would be funded largely by existing revenue streams from governments, research councils, and students.

Why should these actors pay for others to learn? To the extent that what is provided is a public good, I see no problem with it being government subsidised. Revenue from students is more difficult, but (a) students would continue to receive distinctive returns for their payment (such as library access and tutorials) and (b) the issue, anyway, casts as much question on whether university education should be student or government financed as on the proposal above.

Are not the courses the intellectual property of the lecturers and, thus, within their right to disseminate as they choose (including, if they wish, only for a fee)? I have some doubts about whether university courses, especially those publically funded, can be deemed individual intellectual property, but, even if so, lecturers would not need to exercise this right and the case here would imply that they should not do so.

Would it impact badly on student attendance? Might it even, as some lecturers have worried, undermine the viability of some universities and cost jobs if students can study by watching online lectures posted by other institutions? I doubt either of these effects: evidence shows access to online material typically does not decrease attendance and, as noted above, universities will continue to attract numbers and attendance based on the other, more site-specific components of their teaching profile.
Do online educational resources actually help people learn?  Much here might depend on ideas about learning theory.  Those who think we learn through stimulus and repetition (‘behaviouralists’ and, to some extent, ‘cognitivists’) are likely to place greater value on the idea than those who think we learn through communication and collaboration (‘collectivists’ or ‘constructivists’). But formats might be tinkered to respond to what would be most beneficial here, and, in any case, does not the potential of the benefits outlined above suggest that it is worth a try?

Distribution / Economics / Old Blog

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What’s Mine Is Yours, or Is It?

In the past few years we have all become familiar with the idea of the ‘sharing economy’ and this is true even in the absence of a clear-cut definition of it. If I asked you to name some examples of the ‘sharing economy’, your list would probably include Wikipedia, Spotify, Linux, airbnb, ebay, Mendeley. This, I believe, has to do with the fact that there is nothing much new about the logic that grounds it: we have all experienced practices of renting, lending, swapping, bartering, gifting and we have all shared spaces, meals, textbooks, opinions, skills, knowledge, etc. with others. We engage in such practices for various reasons: sometimes it is because we simply cannot afford to buy, and access, rather than ownership, is a more viable option. Sometimes we prefer to re-use unwanted items than to throw them away because, in this way, we reduce the production of waste and, with it, our carbon footprint– all of which seems like a good idea in a world of scarse resources and increasing levels of pollution. Some other times sharing is just more enjoyable; it creates or fosters relationships with other people, and often it leads to new uses and innovative ideas. So, what is different now? Why do we come across a number of articles and blog-posts talking about the rise of the “sharing economy”? And what has turned ‘sharing’ into an ‘economy’ proper?
 
Digital technology, and the advent of Web 2.0 in particular, appears to be the main driver of this transformation. It’s not just that ‘sharing’ seems to be the fundamental and constitutive activity of the Web 2.0, and especially of social networks (John 2013); the Internet is also changing the way in which we engage in the ‘old’ practices of sharing. This is evident if you consider how easy access to the Web 2.0 scales-up the pool of potential ‘sharers’, and the amount of information about them, thus decreasing the high transaction costs associated with more traditional forms of sharing. In other words, the Web 2.0 allows the creation of systems of organized sharing both in the production (i.e. commons-based peer production)and consumption mode (i.e. collaborative consumption).
 
By leveraging information technology and the empowerment opportunities it makes available, the ‘sharing economy’ would seem to advance a new socio-economic model, where the production, exchange and consumption of goods and services is based on horizontal networks and distributed power within communities, rather than on the competition between hierarchical organizations. This seems like a valuable characteristic. And, indeed we find that much of the enthusiasmabout the sharing economy is generally expressed through the egalitarian language of cooperatives and civic groups. It invokes values like the dispersion of power, sustainability, community-level connectedness and solidarity, the opposition to hierarchical and rigid regulatory regimes in favour of peer-to-peer (P2P) schemes (e.g. “What’s Mine is Yours: The Rise of Collaborative Consumption“). 

But, does this mean that the sharing economy is also changing capitalism from within? Are we all witnessing a switch to a “camping-trip” type of economic organization? Is the Web 2.0 really fostering an egalitarian ethos in our societies? Or is the sharing economy just the hi-tech version of the invisible hand?
These are of course big questions and answering them requires more empirical evidence and critical reflection than I can provide here. That said, I would like to offer one critical insight, precisely about the appropriateness of describing the ‘sharing economy’ as an egalitarian practice. To do so, I will focus on the consumption side of it and the reason is that I find the egalitarian narrative surrounding collaborative consumption more troubling than that of commons-based production.

Solidarity without reciprocity? Often the egalitarian character of collaborative consumption is justified by drawing a comparison with economic systems like the gift-economies. What they have in common is that they are solidarity-producing or enhancing practices. But there is a crucial difference. In gift economies the act of gift giving was meant to be reciprocated: it created obligations to respond in kind and these mutual obligations were the ties that bound society together. Collaborative consumption does not seem to work like that: benefitting from what is shared through the Internet does not create an obligation to reciprocate, and the increasing involvement of capital in the sharing economy (e.g. airbnb has now raised more than $300M in investments) is rapidly substituting reciprocity-driven initiatives with entrepreneurial ones.
Indeed, the more collaborative consumption goes mainstream, the more it becomes just a new business model for large companies. Even when the language and rhetoric of sharing is maintained, what characterized platforms like airbnb and Lyft is the profit-seeking of shareholders, rather than the egalitarian solidarity of more traditional forms of sharing, such as gift giving. With this I am not suggesting that the idea is to be abandoned altogether, but that we should be more prudent in welcoming it as a practice that fosters our egalitarian inclinations. It also means that we should be more attentive to the quick developments that the ‘sharing economy’ is undergoing: indeed, there is very little egalitarianism in tactics like those of “surge pricing” (rising the price of a ride in busy times or during bad weather conditions in order to attract more drivers on the road) that Lyft and Uber have adopted recently.

Distribution / Economics / Old Blog / Rights

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What is the value of (even fair) equality of opportunity in an unjust society?

People across the political spectrum care a lot about social mobility. For instance, a recent BBC documentary entitled ‘Who Gets the Best Jobs?’, about how little upwards mobility there is in the British society today, seems to have hit a nerve – judging form the large number of views on youtube but also form the large number of passionate comments from the public:

And there are people who would equate perfect social mobility with justice, and who therefore deplore its absence as the most worrisome form of injustice today.

I assume this is so because equality of opportunities of one form or another is a very widely accepted political value today. Why would anyone be against fair chances? For people on the right, the principle of equal opportunities embodies an ideal of meritocracy which in turn promises that desert will be rewarded. Those on the left are keen on a version of the principle designed to condemn as unjust the obstacles that class (and other kinds of social inequalities) pose in front of individuals’ efforts to obtain socially desirable positions. For instance, John Rawls‘ principle of fair equality of opportunities(henceforth FEO) requires this: ‘[s]upposing there is a distribution of native endowments, those who have the same level of talent and ability and the same willingness to use these gifts should have the same prospects of success regardless of their social class of origin.’ The rest of this post explores the value of this version of the principle.
One of the most compelling reasons for valuing FEO is the belief that it is unfair when factors such as the level of education or wealth in one’s family of origin determines one’s chances to lead a good life. This reason is either unstable or less compelling than it seems at first glance. If it is interpreted to say that how well someone’s life goes ought not to depend on factors that are outside her control and for which she cannot be held responsible, then the principle is unstable: we are as little responsible for our native talent, and, possibly, for our ambition, as we are for our parents’ money and education. If it is interpreted to say that people deserve to reap and keep the benefits of their talents the principle is contentious precisely because people have no merit in being born with particular native talents.
Here is an illustration: imagine that two children have an equally strong desire to get a job and that occupying it will contribute equally to their overall wellbeing; one is more talented, while the other has more parental support. If we bracket the question of the social utility of that job being occupied by one, rather than the other, person, does it make any moral difference which of the two gets the job? In any case there will be a winner and a loser, and in any case a form of luck will dictate who is who.
You may think that the issue of social utility ought not to be bracketed. A second ground for valuing FEO is that the ideal of meritocracy it embodies makes possible various kinds of excellence that all of us have reason to desire (who does not want to be served by competent doctors or civil engineers?). This reason has more weight when in comes to selection for some occupations than for others, and it may be often irrelevant in an unjust society. There is some reason to want, all other things equal, that the people who are most talented for medicine (amongst those who wish to practice it) become doctors. But with respect to other professions that are sought after, ‘good enough’ will probably do (say, when it comes to who ends up practising civil law.) FEO is not necessary to avoid the social disvalue of incompetent individuals landing jobs where they can do harm. A method of eliminating candidates below a certain threshold of competence will do.
An even more important point here is that people who live in unjust societies have reasons not to want the most talented people to occupy those desired positions that are connected to the exercise of power. The most talented lawyers serving a corrupt legal system are likely to do more damage than more mediocre ones; the most talented conservative politicians will be most efficient at keeping in place unfair institutions; and similar things can be said about the most talented bankers, tax advices and top managers working in unjust societies.
One last thought on why it is not socially useful if the most talented land the best paid social positions in unjust societies: such societies tend to have mechanisms that harness talent in the service of a well-off minority – one such mechanism is, obviously, better pay. To take again an example from medicine, much research talent is currently used to seek cures for trivial conditions that afflict mostly the rich. There is no social utility in the most talented researchers who compete for these positions getting them. Therefore (and other things equal) it is far from clear that FEO in an unjust society contributes to the maximisation of social utility.
Third, FEO can also be instrumental to improving the situation of the worst off. In Rawls’ theory of justice FEO is nested in a more complex principle, demanding FEO to regulate the competition for desirable social positions in a society whose basic institutions are organised to ensure that the worst off members of society are as well off as possible. If the most talented individuals occupy the best rewarded social positions in a well-ordered society, this will supposedly lead to the maximisation of the social product. As a result, everybody, including the worst off members of society, will end up better off than the would if other, less talented individuals were to occupy those positions. This is the meritocratic component of FEO. The best results in this sense will be achieved if individuals can develop their talents equally, unencumbered by their class, gender, race etc. This is the fairness component of FEO. In this justificatory story, the value of FEO is entirely dependent on its operation in an otherwise distributively just society. Rawls himself came to the conclusion that the realisation of the difference principle requires market socialism or property owning democracy. One may dispute this, but few dispute that current societies fail to realise the difference principle. How important is it to make sure that people have fair chances to win unfair competitions?
So, it seems a mistake to worry too much about social mobility. We should be a lot more worried about substantive inequalities than about the distribution of chances to end up as a winner rather than as a loser.

Duties / Economics / International / Migration / Old Blog

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Migrant Domestic Workers in Lebanon: An unjust system, how should individuals act?

In Lebanon the law covering the work of migrant domestic workers (MDWs) is deeply unjust. The situation of MDWs in Lebanon and the Middle East has been described to be a “little better than slavery”. That the law and practice should be reformed is clear. Whether this will happen any time in the near future is much less clear. What I want to focus on in this blog post is the question of how individuals who object to the law and practice should act.
A brief background: There are an estimated 200,000 MDWs employed by Lebanese families. The vast majority are women from Sri Lanka, Ethiopia, the Philippines and Nepal. MDWs are employed on short-term contracts. They are admitted into Lebanon on work visas that link them to a specific employer (a sponsor) and obliges them to live at the home of their employer. Their contracts are not covered by Lebanese labour law. This means they are excluded from entitlement to the Lebanese minimum wage guarantees, maximum number of working hours, vacation days and any compensation for unfair termination of contract. The contracts the migrants sign in their home countries with recruitment agencies are not recognized in Lebanon. Upon arrival they sign a contractual agreement (in Arabic), binding them to a specific employer (sponsor) often with different terms than the contract they signed home. The fact that their stay in the country is tied to their employer means they have practically no room for negotiating the terms of the contract. The government has recently imposed a standard contract for employing MDWs but it is far from being fairand is in any case poorly enforced. The facts are that there is a high incidence of abuse against MDWs. This ranges from “mistreatment by recruiters, non-payment or delayed payment of wages, forced confinement to the workplace, a refusal to provide any time off for the worker, forced labor, and verbal and physical abuse”. 
                                                       Source: Al-Akhbar (http://english.al-akhbar.com/node/18752)
The question: International organizations and more recently local NGOshave been advocating and proposing reforms. Meanwhile, what should individuals do?  They should take a clear stance in favor of the reforms, support NGO initiatives and awareness campaigns and combat attitudes of racism. That much seems obvious. A more difficult question, I find, is whether individuals ought to
  (A) refrain from employing MDWs as long as the practice is unjust; or 
  (B) employ MDWs while individually applying the terms and conditions that a fair law would  require.
On reason in favor of (A) is that employing MDWs counts as contributing to sustaining an unjust practice. One can easily avoid participating in the system as there is no sense in which refraining from employing an MDW imposes an unreasonable cost on individuals. Additionally, even if one could improve the conditions through individual arrangements with the MDW herself/himself (the vast majority of MDWs in Lebanon are women), one has no control over the other dehumanizing factors starting with the recruitment procedures in their home countries. Moreover, it is not only the contractual framework that is unjust. The justice system offers little protection, and a biased media and widespread racism make it the case that MDWs are highly vulnerable to mistreatment and abuse. I find this position rather convincing, but I also have the worry that it seems to be the easy way out.
I also think there are strong arguments in favour of (B). One can point out that the vast majority of MDWs migrate to escape severe poverty and send most of their earnings back home (remittances were estimated at $90million dollars in the first half of 2009; and remittances make up a high shareof the GDP of some countries).[1]Surely, it is better to offer them employment under fair conditions, notwithstanding the objections above, especially when noting that they are going to seek employment in Lebanon anyhow? The difficulty with this line of argument, however, lies in the host of tricky questions it raises. To mention only some, should one ensure that her prospective employee was not coerced (or misinformed) into taking up the job in her home country?  If so, when does the cost of doing so become unreasonable? What counts for a fair wage and working conditions? Is that the country’s minimum wage? What if someone cannot afford paying the fair wage? Does that mean one should opt for (A)?
These questions raise a difficulty for the following reason: if the rationale behind choosing (B) over (A) is that (B) improves on some person’s conditions and as such reduces the harm whereas (A) merely allows the harm to happen, then any improvement on the current conditions, no matter how small, would justify (B). This seems problematic. My intuition, is that one should try to maximally provide what ideal conditions would require. Take the example of wages for instance. I am assuming that determining what counts as a fair wage, whether equal or higher than the minimum wage, is not very complicated. Now, if the ideal wage exceeds what one is willing to pay for the service of an MDW, then one should not necessarily opt for (A) but rather pay the maximum amount beyond which the service is no longer attractive. This would imply, I presume, that people with higher incomes should pay higher wages. The assumption here, of course, is that individuals are genuinely interested in making the right ethical choice.
I am not sure I can fully defend the above intuition. Therefore, I would like to hear your views on this. I find the choice between (A) and (B) difficult, and this is a dilemma faced by many friends and family members home.
 
[1] Still trying to find more recent figures!