How should egalitarians cope with market risks?

Theoretical Inquiries in Law

Volumn 9, Issue 1, 2007, Pages

  Anderson, Elizabeth ^a  

^a UNIVERSITY OF MICHIGAN   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 38049168921     PISSN: None     EISSN: 15653404     Source Type: Journal    
DOI: 10.2202/1565-3404.1175     Document Type: Review

References (81)

1. JACOB S. HACKER, THE GREAT RISK SHIFT (2006);
2. Elizabeth Warren, The Growing Threat to Middle-Class Families, 69 BROOK. L. REV. 401 (2003).
3. JOHN RAWLS, A THEORY OF JUSTICE 74-77 (rev. ed. 1999).
4. Other interests may justify rules for criminal trials that result in deviations from this standard of justice. For example, our interest in constraining arbitrary state power may justify the exclusionary rule for illegally seized evidence, even though this reduces the probability of the guilty being convicted.
5. Time and space constraints prevent me from replying in any detail to the contribution by Richard Epstein in this volume. Richard A. Epstein, Decentralized Responses to Good Fortune and Bad. Luck, 9 THEORETICAL INQUIRIES L. 309 (2008).
6. I would, however, like to point to two large-scale disagreements between Epstein and egalitarians today, who, as Daniel Markovits has also noted, seek to reconcile egalitarianism. with widespread reliance on private property and market mechanisms. The first has to do with Epstein's characterization of egalitarian programs as wedded, to government intervention in an already defined system of markets and a supposedly pre-political initial distribution of property rights in persons and things. From an egalitarian point of view, property rights are artificial, all the way down. A primary role of the state in a market egalitarian system is to define a system of artificial property rights that realizes the freedom and equality - which is to say, the personal independence - of each individual in it, to the extent possible. What Epstein disparagingly calls tax and transfer programs, such as social security and universal health insurance, and interference with the market, such as minimum wages, are construed, from the point of view of what Rawls has called, a property-owning democracy, as simply another form of artificial property right, added to others, such as patents, copyrights, and rights to the broadcast spectrum, that are obviously artificial. For more on these points, see Elizabeth Anderson, Ethical Assumptions of Economic Theory: Some Lessons from the History of Credit and Bankruptcy, 7 ETHICAL THEORY & MORAL PRAC. 347 (2004) and my blog posts on political economy, Postings of Elizabeth Anderson to Left2Right, http://www-personal.umich.edu/ %7Eeandersn/blogpoliticaleconomy.html. The second major disagreement between Epstein and egalitarians concerns the role of charity in a system for the satisfaction of individual needs. Epstein regards a system of poor relief that relies on private charity as benign. In practice, however, widespread reliance on private charity leads not to a system of free individuals, but to large-scale patron-client relations closer in spirit to Latin American latifundia, which are structured so as to lock the poor into permanent relations of personal dependence on the rich. Personal dependence of adults on specific others who may withhold their charity at will leads to relations of personal subjection, which are, like feudalism, incompatible with a free society. That is why property rights should be defined so as to avoid any adult's need to rely on the arbitrary good will of others, and why individuals enjoy greater freedom under an impersonal egalitarian system of property rights than under a libertarian or classical liberal system.
7. Gerald A. Cohen, On the Currency of Egalitarian Justice, 99 ETHICS 906, 908, 932 (1989).
8. See THOMAS M. SCANLON, WHAT WE OWE TO EACH OTHER 248-49 (1998)
9. (distinguishing attributive responsibility from substantive responsibility) and SUSAN L. HURLEY, JUSTICE, LUCK, AND KNOWLEDGE 191-95 (2003) (distinguishing attributive responsibility from prudential responsibility).
10. My distinction between RCLE and DCLE owes much to Hurley. See also Mathias Risse & Michael Blake, Two Models of Equality and Responsibility (Aug. 23, 2006) (unpublished manuscript), available at http://ksghome.harvard.eduTmrisse/Papers/Papers%20%20Philosophy/ Two%20Models%20III.pdf (distinguishing Rawls's treatment of responsibility from that of luck egalitarianism).
11. Leading advocates of RCLE include Ronald Dworkin, What is Equality? Part 2: Equality of Resources, 10 PHIL. & PUB. AFF. 283 (1981)
12. and ERIC RAKOWSKI, EQUAL JUSTICE (1991).
13. Leading advocates of DCLE include Richard J. Arneson, Luck Egalitarianism and Prioritarianism, 110 ETHICS 339 (2000)
14. and JOHN E. ROEMER, A Pragmatic Theory of Responsibility for the Egalitarian Planner, in EGALITARIAN PERSPECTIVES. 179 (1994).
15. Although Arneson calls his view "responsibility-catering prioritarianism," it counts as desert-catering because it licenses inequalities that track differential prudential responsibility, holding degrees of attribution responsibility constant. While it upholds a prioritarian rather than an egalitarian baseline against which deviations must be justified, this does not disqualify it from the luck egalitarian family. Arneson, supra, at 341.
16. Dworkin, supra note 7, at 293-94.
17. Friedrich A. Hayek, The Use of Knowledge in Society, 35 AM. ECON. REV. 519 (1945).
18. FRIEDRICH A. HAYEK, THE CONSTITUTION OF LIBERTY 93 (1960).
19. ROEMER, supra note 8.
20. HAYEK, supra note 11, at 96.
21. 2 FRIEDRICH A. HAYEK, LAW, LEGISLATION, AND LIBERTY: THE MIRAGE OF SOCIAL JUSTICE 125 (1976).
22. HAYEK, supra note 11, at 95-97.
23. DCLE must choose between invading privacy and reinforcing group stigma. Roemer's group-based standards of desert avoid invading individual privacy at the cost of making stigmatizing judgments about racial, ethnic, gender, and religious groups. Arneson's version of DCLE, which assesses responsibility at the individual, level, would reduce group stigmatization at the cost of privacy.
24. Arneson, supra note 8,
25. and Richard J. Arneson, Egalitarian Justice Versus the Right to Privacy?, 17 SOC. PHIL. & POL'Y 91 (2000).
26. Richard J. Arneson, Luck and Equality, 75 PROC. ARISTOTELIAN SOC'Y (SUPP.) 73 (2001).
27. Gerald A. Cohen, Facts and Principles, 31 PHIL. & PUB. AFF. 211, 244 (2003) advances the same objection.
28. STEPHEN DARWALL, THE SECOND- PERSON STANDPOINT (2006) provides the definitive account of the second-person status of judgments of justice and moral lightness.
29. The act in question may be simply deliberative or procedural - for instance, to weigh A's interests in deciding what to do.
30. The notion of substantive responsibility in this claim is the stronger sense that could justify complaints against B for failure, not the weaker sense in which B has no complaints against anyone else for failure. Assignments of weak, substantive responsibility for an outcome do not presuppose that the responsible parties have the power to achieve it. Each adult in a free society is weakly responsible for choosing a suitable spouse, in that they have no one to blame but themselves if they choose poorly. Yet they may not have the power to choose well.
31. Hayek argues that if no agent is attributively responsible for some distributive outcome, then the outcome is not unjust. HAYEK, supra note 14, at 67-70. Hence, since aggregate market outcomes are not intended or chosen by anyone, the concept of justice is not applicable to market distributions. Hayek errs. The relevant concept of responsibility here is substantive, not attributive. If the state were able to satisfy some valid claim, of distributive justice that the unregulated market fails to meet, then, although no agent is attributively responsible for market distributions, the state may still coherently be held substantively responsible for correcting it.
32. This epistemic objection applies better to Arneson's individualized "inner worth" conception of desert than to Roemer's group-stereotype conception of desert, which is pragmatic rather than metaphysical. My objection from authority applies to both Arneson's and Roemer's versions of desert-catering.
33. HAYEK, supra note 11, at 99, allows that desert-catering principles may be implemented at the enterprise level. His argument, like mine, is directed against desert-catering principles for the basic structure of society.
34. Individually allocating constraints based on need are indispensable to an egalitarian society. However, the scope of directly need-based allocations is mainly confined to publicly provided or subsidized in-kind goods, such as education, health care, disaster relief, and the public transportation/ communication infrastructure. Other needs can be largely provided through the market. To ensure that everyone's market-provided needs are met, a range-constraining rule providing an income floor should be sufficient.
35. Elizabeth S. Anderson, What is the Point of Equality?, 109 ETHICS 287, 296-97, 322-23, 287-337 (1999).
36. Seana V. Shiffrin, Egalitarianism, Choice-Sensitivity, and Accommodation, in REASON AND VALUE 270 (Jay Wallace et al. eds., 2004) objects to RCI's refusal to accommodate certain choices on grounds of liberty more than equality.
37. RAKOWSKI, supra note 7, at 73-90.
38. Dworkin, supra note 7, at 294.
39. Id. at 295.
40. Despite its notoriously steep tax rates, Sweden boasts 5 of the richest 525 people in the world. Forbes.com, The World's Richest People (Aug. 23, 2006), http://www.forbes.com/lists/2006/10/Residence_14.html. One can progress very far in an egalitarian distributive program without significantly threatening the freedom to pursue risk-loving, fortune-seeking conceptions of the good.
41. Kasper Lippert-Rasmussen, Egalitarianism, Option Luck, and Responsibility, 111 ETHICS 548 (2001).
42. Marc Fleurbaey, Egalitarian Opportunities, 20 LAW & PHIL. 499, 517-20 (2001).
43. Marc Fleurbaey, Equal Opportunity or Equal Social Outcome?, 11 ECON. & PHIL. 25, 40-41 (1995);
44. Lippert-Rasmussen, supra note 32, at 557-62.
45. Marc Fleurbaey, Equality of Resources Revisited, 113 ETHICS 82, 83 (2002) observes that luck egalitarians including Dworkin, Roemer, Cohen, and Arneson (in his earlier equality of opportunity theory, which he has since recanted) allow choice to legitimize catastrophic outcomes for individuals.
46. FRIEDRICH A. HAYEK, THE ROAD TO SERFDOM 120-21 (1944).
47. See also HAYEK, supra note 11, at 259;
48. HAYEK, supra note 14, at 55.
49. As Daniel Markovits proposes in this issue. Daniel. Markovits, Luck Egalitarianism and Political Solidarity, 9 THEORETICAL INQUIRIES L. 271 (2008).
50. Lippert-Rasmussen, supra note 32, at 557-62.
51. Markovits, supra note 37, at 297-303.
52. Id. passim.
53. SCANLON, supra note 6, at 258.
54. Id. at 258-63 (arguing that such standing may be lost even in the absence of a voluntary assumption of risk, if the injuring party has taken sufficient precautions to prevent and limit injury to others, and has provided reasonable opportunities to avoid the injury, although these opportunities were unknown to the injured party).
55. As Markovits acknowledges. Markovits, supra note 37, at 302-03.
56. Id. at 286-87.
57. This is the starting point of the "equality of what?" debates, including the works cited supra notes 5, 7, and 8.
58. See Anderson, supra note 26.
59. See, e.g., LARRY S. TEMKIN, INEQUALITY (1993) (arguing that it is bad for some people to be worse off than others through no fault of their own)
60. and David Enoch, Luck Between Morality, Law, and Justice, 9 THEORETICAL INQUIRIES L. 23 (2008).
61. The current discussion pertains to constraints on permissible outcomes, without regard to anyone's chances of attaining better or worse outcomes within the permissible range. I thus omit consideration of constraints pertaining to equality of opportunity, which have to do with each person's chances of attaining positions greater than the minimum acceptable. For my views on this question, see Elizabeth Anderson, Rethinking Equality of Opportunity, 2 THEORY & RES. EDUC. 99 (2004).
62. See RAWLS, supra note 2, at 132-35 (arguing that if individuals are so motivated, then they will, choose the difference principle, which only permits inequalities to the extent that they maximize the prospects of the least advantaged).
63. See JEAN-JACQUES ROUSSEAU, THE SOCIAL CONTRACT 2.11 (G.D.H. Cole ed. & trans., J.M. Dent & Sons 1913) (1762) ("[N]o citizen shall ever be wealthy enough to buy another, and none poor enough to be forced to sell himself.").
64. The ideal of equality is but one element in a comprehensive theory of justice. Other claims may arise that are based on non-egalitarian considerations, such as the obligations of humanity, individualistic contractualist considerations, and so forth.
65. Anderson, supra note 26;
66. MARIA H. MORALES, PERFECT EQUALITY: JOHN STUART MILL ON WELL-C ONSTITUTED COMMUNITIES (1996).
67. John Rawls, Kantian Constructivism in Moral Theory, 77 J. PHIL. 515, 546 (1980).
68. A " society between equals... can only exist on the understanding that the interests of all are to be regarded equally" and "consulted." JOHN STUART MLL, UTILITARIANISM 40 (Oskar Piest ed., Bobbs-Merrill 1957) (1861).
69. See Anderson, supra note 26
70. and Samuel Scheffler, Choice, Circumstance and the Value of Equality, 4 POL. PHIL. & ECON. 5 (2005).
71. ADAM SMITH, THE WEALTH OF NATIONS V.2.148 (Edwin Cannan ed., 5th ed. Methuen & Co. 1904) (1776) ("By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but what ever the customs of the country renders it indecent for creditable people, even the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life.... But in the present times, through the greater part of Europe, a creditable day-laborer would be ashamed to appear in public without a linen shirt....").
72. I borrow this conjecture from John Roemer, Prospects for Achieving Equality in Market Economies 12 (Sept. 30, 2006) (unpublished manuscript), available at http://www.stanford.edu/dept/EIS/equality_and_markets/ papers/Roemer.pdf.
73. RAWLS, supra note 2, at 197-200.
74. Brian Barry, The Welfare State Versus the Relief of Poverty, 100 ETHICS 503 (1990).
75. Therese Bjorkholm has suggested that egalitarian policies in Sweden are sustained, by the motive of duty rather than solidarity. However, even in Sweden some sense of solidarity or common identity will, need to be cultivated between native Swedes and growing immigrant populations to facilitate the latter's integration into society, which is a prerequisite for their standing in full, relations of equality with respect to citizens of Swedish ancestry.
76. Theoretically, egalitarians should be neutral between policies that prevent people in the middle from falling too far from their accustomed positions, and policies that ensure that others replace them in those positions. In practice, it is easier to maintain the former policies, since these can also take advantage of individualistic motives for social insurance, such as are represented in the contractualist argument for middle-range constraints.
77. RAWLS, supra note 2, at xiv-xv, 242.
78. Id. at xv.
79. ROBERT NOZICK, ANARCHY, STATE, AND UTOPIA 160-64 (1974).
80. HAYEK, supra note 14, at xii-xiii.
81. Id. at 100.