In some situations, society permits individual citizens to not fulfil otherwise binding requirements when the latter conflict with the individual’s deeply held ethical convictions. The classic example are pacifists who obtain an exemption from military service. I submit that an argument along these lines also applies to collective pension plans. Such plans need to offer their participants a minimal level of influence over their portfolios to be legitimate.
Category: Economics Page 5 of 11
In this post, Justice Everywhere’s Nicolás Brando and his co-editor Gottfried Schweiger introduce their recently-published collection on philosophy and child poverty.
Philosophy and Child Poverty: Reflections on the Ethics and Politics of Poor Children and their Families (2019) is the first full volume to address child poverty from a philosophical perspective. It brings together contributions from a plurality of philosophical approaches, providing an ample exploration into the conceptual, ontological, normative and applied questions that arise when looking at child poverty as a philosophical subject.
While Justice Everywhere takes a break over the summer, we recall from our archives some memorable posts from our 2018-2019 season.
In a first for Justice Everywhere, we hosted a colloquium on the topic of “just wages”. This discussion was sparked by a paper by Joseph Heath in the Erasmus Journal for Economics and Philosophy. Our colloquium – a précis to a full special issue on the topic – included three critical engagements with Heath’s argument, as well as a response from Heath:
- Andrew Lister on Talents and Wages.
- Peter Boettke, Rosolino Candela, and Kaitlyn Woltz on Is the Market Wage the Just Wage?
- Peter Dietsch’s post, On the Very Idea of an Efficient Wage.
- Joseph Heath’s reply, On the Very Idea of a Just Wage: Response to Critics.
Justice Everywhere will return in full swing on 2nd September with fresh weekly posts by our regular authors. If you have a suggestion for a topic or would like to contribute a guest post on a topical subject in political philosophy (broadly construed), please feel free to get in touch with us at justice.everywhere.blog@gmail.com.
As the famous adage holds, we should try to Do More With Less. We’re living in a time in which minimalism has become a movement and to Marie Kondo has become a verb. As we all know, materialism is bad for the planet and people around us, but I will only focus on how self-interest might also be a significant motivator to reduce our materialism, and also give a humble suggestion as to what fundamentally underlies moving to Doing More With Less (or getting even better at it if you’re already on the programme).
The category of „meaning“ is not one that analytically-minded folks working on public policy and PPE issues use very often. And yet, it is one that I could not stop thinking about for quite a while. I mean by it, very broadly, the kinds of projects that individuals pursue, in which certain values are realized – love, beauty, truth, or whatever, in whatever interpretation individuals chose. A quote from a text about professionalism, by historian Thomas L. Haskel, captures an unease that I had had about markets, and the economic way of thinking about them, for a long time: “Where would liberation stop if the entire social universe was given over to competing selves, none acknowledging any standard higher than his or her own desires?”[1]
Most moral objections to nudging–the practice of altering choice environments in order to subconsciously steer behavior–have been grounded in the value of personal autonomy. The autonomy of the nudged are claimed to be undermined because the control individuals have over their evaluations, deliberations and decision-making is effectively reduced, if not fully bypassed. More so, nudging seems autonomy-threatening because the architects look to supplant the wills of their targets with their own.
When nudging was first discussed by its main proponents Thaler and Sunstein in their book Nudge in 2008, it was proposed as an innovative supplement to government policy-making. In response, most of the autonomy-related objections focused on the paternalism of governments carrying out the nudging. Surprisingly, few have paid much attention to similar forms of influences in the market setting–behavioral techniques used in advertising, pricing, and other market interactions. I claim the standard autonomy-based objections against nudging raise more worries about current market practices than emerging and prospective policy practices.
In this post, Joseph Heath responds to three critical engagements with his paper, which have been published over the previous three weeks on Justice Everywhere (and in full in this EJPE symposium).
My central objective in writing this paper (“On the Very Idea of a Just Wage”) was to respond to the reappearance of what Paul Krugman has referred to, somewhat abusively, as a “cockroach idea.” The thing about cockroaches is that, no matter how many times you kill them, they keep coming back. Similarly, there are some ideas that, no matter how many times they may be refuted, nevertheless keep reappearing, or get “rediscovered” by people who consider them fresh insights.
The idea that the marginal productivity of labour represents the “contribution” that an individual worker makes to production is a cockroach idea in this sense. It is something that many people would like to believe, because it implies that the natural tendency of markets will be to set wages at a level that corresponds to an intuitively plausible principle of distributive justice (i.e. “to each according to his or her contribution”). It was, however, intensively debated in the early 20th century and rather decisively rejected.
Peter Dietsch’s post is the third in our four-part series on “Just Wages.”
There are valuable human activities which require the motive of money-making and the environment of private wealth-ownership for their full fruition. […] But it is not necessary for the stimulation of these activities […] that the game should be played for such high stakes as at present. Much lower stakes will serve the purpose equally well, as soon as the players are accustomed to them. (John Maynard Keynes, The General Theory of Employment, Interest, and Money, New York: Harcourt, 1953 [1936], 374)
This quote from John Maynard Keynes suggests that while a capitalist economy requires incentives to function, the magnitude of these incentives is variable. This suggestion puts Keynes at odds with the conventional wisdom in economics today. The latter includes the idea, eloquently presented by Joe Heath in his EJPE article, that there exists a rigid trade-off between economic efficiency and equity: If, as a society, we try to make wages more just, we will necessarily thereby undermine the efficiency of the market.
I shall argue that this conventional wisdom suffers from an important blind spot, which can explain why it overestimates the rigidity of the equity-efficiency trade-off. This blind spot lies in the fact that economists take as given the labour supply preferences of economic agents, rather than treating them as a variable of their analysis. To see why this matters, we need to introduce two concepts: reservation wages and economic rent.
Peter Boettke, Rosolino Candela, and Kaitlyn Woltz’s post is the second in our four-part series on “Just Wages.” It offers a reassessment of factor pricing and distributive justice.
Does the market generate just wages? This question has plagued the minds of those concerned with justice for centuries (Aquinas, 1485). In his recent (open-access) article, “On the Very Idea of a Just Wage,” Joseph Heath argues that the market does not generate just wages. Instead, he argues that factor pricing is irrelevant to normative issues like distributive justice. Heath argues that market forces will produce efficient wages, but not just wages.
We challenge Heath’s argument, arguing that his conclusion, while not invalid, is misplaced. His critique is of a model of the market and not the market itself. In particular, his critique is of equilibrium models of the market.
Andrew Lister’s post is the first in our four-part series on “Just Wages,” which will be running this month.
Gregory Mankiw argues that those who are more productive should get a higher income not only as an incentive, but because this income is rightfully theirs (295). In a competitive market, factors of production are paid the value of their marginal product (32), which is the change in output associated with adding an extra unit of that input. Firms hire workers of a given type up to point at which the revenue the firm gains from hiring an additional worker is equal to the cost of that worker. Thus, in competitive equilibrium “each person’s income reflects the value of what he contributed to society’s production of goods and services.” In this way, the theory of “just deserts” gives “a new normative interpretation” to the economic theory of competitive equilibrium (295).
Joe Heath responds that wages in a competitive market aren’t intrinsically fair. Wage-setting is not a unidirectional process from unequal skill and effort to unequal contribution to unequal wages. Where workers of a given skill-level are more abundant, they will be cheaper, and so hired for lower-value tasks, and so less productive even if equally skilled and diligent. The rationale for pricing labour according to supply and demand is that it directs people’s talents to where they can best be used, generating prosperity that can benefit everyone. As Heath says, “[t]he market has one job to do, and it does that job very well [allocating resources efficiently]. Producing ‘just’ wages, however, is not that job” (31).