A Fair Distribution of Resources

3 mins read

By Isa Lappalainen

Many attempts have been made at defining what a fair distribution of resources in society would look like. Utilitarians have argued for any distribution that maximises welfare, while libertarians have argued for the legitimacy of any distribution that follows from a just initial acquisition or transfer. Liberal theorists, like John Rawls, have argued that a just distribution is one that maximises welfare for the worst off — this is called the maximin principle. It entails that inequalities are only allowed in cases where the unequal distribution itself generates a better outcome for those at the bottom.

This idea has been criticised. Most inequalities probably derive from unequal initial opportunities due to one’s place of birth or discriminatory class, gender, or race structures. It is, however, also true that some inequalities arise because people differ in their level of ambition. Take the example of two sisters: High-Achieving Hanna and Lazy Lucy. Having more or less identical initial opportunities (same class, gender, skin color, place of birth), any differences in income between the two of them are likely to be the result of differences in their levels of ambition. Not allowing any income difference between the sisters might go against our intuition that hard work should pay off. A redistribution from High-Achieving Hanna to Lazy Lucy seems unfair as it means that one is able to benefit from a situation where they let other people do all the hard work.

Justice-based arguments about the desirability of progressive taxes usually deal with these questions. People in favour of high taxes tend to think it is more important to try and equalise the outcomes of circumstances that people have no control over (endowments), often at the expense of also mitigating advantages that arise by virtue of ambition. People in favour of lower taxes tend to think it is more important to avoid a situation that mitigates the results of people’s ambitions, even if this means that people who have just been unfortunate in the lottery of birth place/class/gender/skin color will not be compensated for their hardship.

Seemingly, we have not come up with a redistributive system that manages to distinguish between outcomes for which people are personally responsible, and outcomes over which they have no control. This is sometimes referred to as the trade-off between endowment-insensitivity and ambition-sensitivity.

Nonetheless, Yale economist John Roemer has developed a model of redistribution that he claims to be both endowment-insensitive and ambition-sensitive. He calls it the egalitarian planner. The model identifies a certain set of ‘circumstances’ on which it bases the formation of a ‘type’. While Roemer suggests that the ‘circumstances’ identified may differ in different societies, he proposes using ‘parental education’, ‘parental income’, ‘ethnicity’, ‘gender’, and ‘health status’. Depending on the categorisation of oneself according to these criteria, one will fit into a certain ‘type’. As the ‘circumstances’ identified are what usually is considered to impact a person’s opportunities, any inequalities within each type are considered to be due to differences in ambition. Redistribution will subsequently only occur between people from different types.

The division of types into percentiles is what then guides the redistribution. The model suggests that there is no reason to believe that people in the 90th percentile, in any of the types, should have exercised a differing degree of responsibility to those in the 90th percentile of another type. Basically, the top ten percent of earners amongst healthy black working-class born females are, according to the model, likely to work just as hard as the top ten percent of healthy white upper-class born males. Any inequalities between these groups are therefore thought to be due to unequal endowments rather than different levels of ambition and, consequently, these inequalities will be compensated for through redistribution. This means that while inequalities are still allowed within each type, the 90th percentile of each type will have an equal income, as will the 80th, 70th (…) and 10th percentile.

Implementing the egalitarian planner would surely require some radical changes. In Sweden, for example, the State is currently not allowed to register people’s ethnicities. The extensive collection of such information will inevitably be met with criticism due to the potential dangers related to the coercive nature of the State. But the nature of class, gender, and racial structures is indisputably coercive as well. If we truly wish to live in a just society, fair opportunities are crucial. We need innovative alternatives like the one developed by John Roemer to be able to move beyond the perceived impossibility of satisfying contesting ideas of fairness. Radical change should not be considered an obstacle — rather, it is the only way.

By Isa Lappalainen 

Illustration by Billie Brundell

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