Freedom with forgiveness

politics, philosophy & economics

Volumn 4, Issue 1, 2005, Pages 29-67

  Fleurbaey, Marc ^a  

^a UNIVERSITÉ DE PAU ET DES PAYS DE L'ADOUR   (France)

Author keywords

fairness; freedom; fresh start; incentives; preference changes; regret

Indexed keywords

EID: 34248041948     PISSN: 1470594X     EISSN: None     Source Type: Journal    
DOI: 10.1177/1470594X05049435     Document Type: Article

References (27)

1. See John Rawls, A Theory of Justice (Cambridge, MA: Harvard University Press, 1971); John Rawls, ‘Social Unity and Primary Goods’, in Utilitarianism and Beyond, edited by A. Sen and B. Williams (Cambridge: Cambridge University Press, 1982).
2. Ronald Dworkin, Sovereign Virtue: The Theory and Practice of Equality (Cambridge, MA: Harvard University Press, 2000).
3. Richard Arneson, ‘Equality and Equal Opportunity for Welfare’, Philosophical Studies 56 (1989): 77-93; G.A. Cohen, ‘On the Currency of Egalitarian Justice’, Ethics 99 (1989): 906-44; J.E. Roemer, Equality of Opportunity (Cambridge, MA: Harvard University Press, 1998); Peter Vallentyne, ‘Brute Luck, Option Luck, and Equality of Initial Opportunities’, Ethics 112 (2000): 529-57.
4. A.K. Sen, Inequality Re-examined (Oxford: Clarendon Press, 1992).
5. Arneson, ‘Equality and Equal Opportunity for Welfare’, p. 86, emphasis added.
6. M. Fleurbaey, ‘Equal Opportunity or Equal Social Outcome?’, Economics & Philosophy 11 (1995): 25-55; E.S. Anderson, ‘What is the Point of Equality?’, Ethics 109 (1999): 287-337.
7. Dworkin, Sovereign Virtue, p. 109.
8. M. Fleurbaey, ‘Egalitarian Opportunities’, Law and Philosophy 20 (2001): 499-530.
9. M. Fleurbaey, ‘Equality of Resources Revisited’, Ethics 113 (2002): 82-105.
10. Ronald Dworkin, ‘Sovereign Virtue Revisited’, Ethics 113 (2002): 106-43.
11. As will be explained later on, the optimal policy under incentive-compatibility constraints will precisely combine compensating transfers and limitations of options so as to reduce the extent of regret (and, thereby, the need for transfers).
12. Contrariwise, one may find miserable vegetables at the grocery store and regret not having spent enough on the dessert.
13. Barbara's satisfaction of basic needs is not necessarily at stake here. The absence of the fresh starts defended by certain egalitarians may indeed condemn some people to poverty, but the thesis of this article is that fresh starts may be set up to avoid any substantial inequality involving regret, not just to guarantee subsistence.
14. One may object that the example of games is simplistic in comparison to the complexity of social institutions. The purpose of this example is just to highlight some important points (in particular, the distinction between choosing rules and playing by the rules), not to cover all the issues.
15. Even the hypothetical choices in Dworkin's ‘hypothetical insurance’ are just a way of calibrating transfers to certain features of personal preferences.
16. Recall that harm to others is assumed away here. If one's past behavior has harmed others, there is indeed a moral duty to face up to it at some point later on, even though this need not always be a burden for the rest of one's life.
17. Such limits must be distinguished from the scarcity constraints discussed in the previous section. The latter imply that the fund for fresh starts must be financed (that is, fresh starts impose a cost on others), while the former imply that the corresponding tax creates a deadweight loss in the economy and that full equality is impossible (fresh starts will not fully alleviate the consequences of past decisions).
18. Throughout this article, all preferences are assumed to be strictly monotonic (more consumption at any period is better) and convex.
19. Otherwise, the best policy would be to warn the future regretful and induce them to choose point P instead of S. Then the EIS ex post would be equal to R for everyone and there would be no regret. This is indeed very simple, but quite unrealistic.
20. Preferences are assumed to satisfy the ‘single-crossing’ property: any two indifference curves of two different preferences cross once at most.
21. J. Buchanan, ‘The Samaritan's Dilemma’, in Altruism, Morality and Economic Theory, edited by E.S. Phelps (New York: Russel Sage Foundation, 1975).
22. For an interpretation of compulsory social security as a solution to the Samaritan's dilemma among altruistic generations, see I. Hansson and C. Stuart, ‘Social Security as Trade among Living Generations’, American Economic Review 79 (1989): 1182-95 and A. Lindbeck and J.W. Weibull, ‘Altruism and Time Inconsistency: The Economics of Fait Accompli’, Journal of Political Economy 96 (1988): 1165-82.
23. This may be due to the maximin criterion. I conjecture that with a less extreme criterion (with positive, but finite aversion to inequality), the proportions of preferences would matter.
24. The representation of the production function by a line of slope -1 may be obtained by measuring leisure by its opportunity cost in terms of production.
25. The reasons why we fret about forced labor more than about forced savings has to do with features of real life which are absent from such simple models (hidden costs of labor borne by workers, unemployment, and so on).
26. Here is a conjecture. Suppose that preferences over leisure do not change so that regret bears only on lack of savings. Then, the typical situation has the lazy being globally taxed (that is, the tax levied on the prudent among them overcomes the subsidy paid to the spendthrifts) in order to finance the transfer to the hard-working spendthrifts. The reason is that the hard-working spendthrifts make a bigger ‘mistake’ when they fail to save their big earnings, whereas the problem is milder with the small earnings of the lazy.
27. Recall that in the ‘first-best’ policy analyzed above, the steady spendthrifts pay less tax than the prudent in order to compensate for the distortion imposed on them by the protection part of the policy.