John Roemer's egalitarian planner (long)

[moorobot]

Yale economist John Roemer has tried to come up with a way to make the distribution of resouces in the world, inter alia, more sensitive to choice and less sensitive to circumstances. This, incidentally, is one way, I believe, to bring about a more just society without much in the way disincentive effects, even if you believe monetary incentives are very important for productivity/effiecncy.

On his proposal, society would decide on a list of factors which are matters of circumstance rather than choice: e.g. age, gender, race, disability, and economic class and education level of one's parents. we then divide people into groups or 'types' based on thes factors. For example, one type would be 40-year old able-bodied white males whose parents were middle class and college educated; another type would consist of 40-year old able bodied black women whose parents recieved only primary education and were poor.

Now, within each type, people will vary dramatically in their income or wealth. Within the group of 40-year-old able-bodied white males whose parents were college educated (call them type A), most persons might earn around $70,000, with the top 10 percent earning $125,000 and the bottom 10 percent earning under $40,000. We assume that such inequalities within type A are due primarily to the choices people make. Since all members of type A share the same basic socio-economic and demographic circumstances, the inequalities we see within this group are likely to reflect different decisions about work, leisure, training, consumption, risk, and so on. So we will not seek to redistribute resources withing type A: we assume that the distributions within types are broadly ambition-sensitive: hard working and prudent white males of educated parents are not forced to 'subsidize' the choices of comarable white males with expensive tastes for leisure, or irresponsible habits.

Similarly, there will be considerable variation in income within the group of 40-year old black women from less-educated parents (call them type B). Perhaps the average income in this group is around $20,000, with the top 10 per cent earning $33,000, and the bottom 10 % earning 10,000. As before, hard-working and prudent black women should not be subsidizing the expensive or imprudent tastes of other black women.

So we accept for the sake of public policy that inequalities between types are ambition-sensitive. However, notice that there are enormous inequalities between types A and B, and these, by hypothesis at least, are due to circumstances not choices. Hard-working and prudent members at the 90th percentile of type A earn three as much as hard-working and prudent members at the 90th percentile of type B. That inequality cannot be explained or justified in terms of choices. People should be rewarded for above-average levels of work or prudence, but there is no reason why members of type A who exhibit these characteristics should be rewarded three times more than members of type B who exhibit the same characteristics.

Similarly, compare the reckless and indolent white male at teh 10th percentile of type A who earns four times as much as teh reckless and indolent black female at the 10th percentile of type B. People should pay for their choices, and so reckless and indolent people should accept that they will do less well than others who are prudent and hard working. But there is no reason why the costs of these imprudent decisions should be four times harsher for members of type B that for type A.

The goal of an 'egalitarian planner', therefore, is to accept inequality within types, but to equalize across types. thus everyone at the 90th percentile their type should have the same income, no matter what type they belong to; similarly at the 50th percentile or 10th percentile.. This will ensure that people are held responsible for their choices: hard-working and prudent members of each type will do much better than members with expensive or impudent tastes. But we will have neutralized the impact of the most important unchoosen circumstances; and incentives to productivity are not dramtically reduced.

For the sake of the reader, This summary draws very heavily on the summary of it found in the 2nd edition of Will Kymlicka's outstanding "Contemporary Political Philosophy", perhaps the best introduction to the subject in existensce, written by a highly distingusihed political theorist, btw.

If you are interested further in this, last time I checked, Roemer had links to more articles about this and related topics on his website, although some are largely technical in nature. Also, check out his book "Equality of Opportunity", (Harvard UP, 1998) for a more detailed explanation. Here is the link: Roemer's home page

[lehighguy]

Off the top of your head, how do you think people would react if such a system were put in place. How would it affect human behaivor.

In what practical way would the system be implemented, i.e. who would make the rules and who would enforce them.

[moorobot]

I should mention that the social policy that Roemer advocates is meant to equalize opportunities (for, e.g., income) at the highest possible level.

[hmkpoker]

I'd like to express some thoughts on affirmative action a little bit:

Businesses, for the most part, are concerned about <i>making money.</i> When they hire employees, they want the ones that are the most productive. They want people that can do the job <i>well.</i>

It follows naturally that people with more resources will tend to cultivate better skills, making them more eligible for the job. Whites, being of a generally higher socioeconomic status, are going to tend (slightly) to manifest better job skills than blacks.

The problem with affirmative action is that it, in the name of egalitarianism, does the same evil thing that EVERY egalitarian ploy does: it decreases productivity.

If you want to help minorities gain a better position in the workplace without compromising economic activity, you have to make businesses want to hire them. You have to help them get better skills. How this can be employed, I'm not sure, I haven't thought it out that far. Perhaps the creation of schools that only help minorities gain job skills?

[dragon14]

[ QUOTE ]
So we accept for the sake of public policy that inequalities between types are ambition-sensitive. However, notice that there are enormous inequalities between types A and B, and these, by hypothesis at least, are due to circumstances not choices. Hard-working and prudent members at the 90th percentile of type A earn three as much as hard-working and prudent members at the 90th percentile of type B. That inequality cannot be explained or justified in terms of choices. People should be rewarded for above-average levels of work or prudence, but there is no reason why members of type A who exhibit these characteristics should be rewarded three times more than members of type B who exhibit the same characteristics.


[/ QUOTE ]

These groups do not exhibit the same characteristics. The main attribute that separates high income earners from lower income earners is intelligence. Intelligence is not randomly selected but comes from the genetics of a person's parents.

Intelligence is not random. It's not as if the children of two parents with Ph.D's and a child of two people who were unable to complete high school (because of lack of understanding of the work, not social conditions) are likely to have roughly the same intelligence levels. It's not even close.

From looking at Mr. Roemer's site it appears that he has been advocating a 1960's style " the environment is responsible for all" theory throughout his life. The evidence of the importance of genetics continually looks stronger while the pure environmentalist looks to be quite mistaken on a number of issues.

Whether or not society makes attempts to share resources is one thing, but to suggest that unequal distribution is purely by chance is incorrect.

Someone with an IQ of 85 can be a hard worker but they will not reach management nor master higher level thinking. Someone with an IQ of 125+ can manage and innovate on the job. If a hard worker with an much lower IQ is rewarded equally then we would be rewarding pure physical skills as highly as mental skills. The higher standard of living in the U.S. comes from the innovators, not the brute force worker.

[moorobot]

[ QUOTE ]
I'd like to express some thoughts on affirmative action a little bit:

Businesses, for the most part, are concerned about <i>making money.</i> When they hire employees, they want the ones that are the most productive. They want people that can do the job <i>well.</i>

It follows naturally that people with more resources will tend to cultivate better skills, making them more eligible for the job. Whites, being of a generally higher socioeconomic status, are going to tend (slightly) to manifest better job skills than blacks.

The problem with affirmative action is that it, in the name of egalitarianism, does the same evil thing that EVERY egalitarian ploy does: it decreases productivity.

If you want to help minorities gain a better position in the workplace without compromising economic activity, you have to make businesses want to hire them. You have to help them get better skills. How this can be employed, I'm not sure, I haven't thought it out that far. Perhaps the creation of schools that only help minorities gain job skills?

[/ QUOTE ] But this is not directly about affirmative action; it is income redistribution and a fair equality of opportunity. Employers can still hire whoever they want, and I don't see how Roemer's plan does much if it does anything to decrease productivity.

[moorobot]

[ QUOTE ]



These groups do not exhibit the same characteristics. The main attribute that separates high income earners from lower income earners is intelligence. Intelligence is not randomly selected but comes from the genetics of a person's parents.

Intelligence is not random. It's not as if the children of two parents with Ph.D's and a child of two people who were unable to complete high school (because of lack of understanding of the work, not social conditions) are likely to have roughly the same intelligence levels. It's not even close.

From looking at Mr. Roemer's site it appears that he has been advocating a 1960's style " the environment is responsible for all" theory throughout his life. The evidence of the importance of genetics continually looks stronger while the pure environmentalist looks to be quite mistaken on a number of issues.

Whether or not society makes attempts to share resources is one thing, but to suggest that unequal distribution is purely by chance is incorrect.

Someone with an IQ of 85 can be a hard worker but they will not reach management nor master higher level thinking. Someone with an IQ of 125+ can manage and innovate on the job. If a hard worker with an much lower IQ is rewarded equally then we would be rewarding pure physical skills as highly as mental skills. The higher standard of living in the U.S. comes from the innovators, not the brute force worker.

[/ QUOTE ] Where did he state they are equally intelligent? If IQ comes from genetics it is still derived from luck and not choice; nobody chooses who their parents are.

He said they are equally hard-working/prudent, given their circumstances. Notice the phrase "these characterstics" in the last sentence, referring to prudence and hard work; that is what "same" refers to in that sentence; nobody says they are exactly identical in every way.

BTW- The article I talk about in the post I just started on inheritance states that "the genetic transimission of IQ appears to be relatively unimportant" in the intergenerational transmission of economic status in the U.S.

[lehighguy]

Leveling different income taxes on different workers is affirmitive action.

Example:
Richy McProductive is taxed at 80% of his income
Poory McStupid is taxed at 0% of his income.

Let's say Richy is twice as productive. He therefore should be paid twice as much as poory. However, given his high tax rate his employer must pay him 10 times as much in order to employ him.

He pays:
Richy pre-tax: $100
Richy post-tax: $20
Poory: $10

So he will naturally employ lots of poory, even though he is less productive. Note, no taxes are being applied to him, but taxes on employees and taxes on employers are basically the same thing when determining economic efficiency and behaivor.

[hmkpoker]

[ QUOTE ]
But this is not directly about affirmative action; it is income redistribution and a fair equality of opportunity. Employers can still hire whoever they want, and I don't see how Roemer's plan does much if it does anything to decrease productivity.

[/ QUOTE ]

Redistribution NECESSARILY decreases productivity.

It is always done the same way: tax the rich more, taxc the poor less, give some money to the poor. In addition to the resources being wasted in the process of doing this, productive incentives are harmed. Productive people get less reward for their productivity, so they are less motivated to be productive. Unproductive people get more reward for doing less, so they have less incentive to be productive.

Duh.

[moorobot]

[ QUOTE ]
Let's say Richy is twice as productive. He therefore should be paid twice as much as poory

[/ QUOTE ] This is not how people are paid; nor is it how they 'should' be paid...

Pay, in market societies, is largely based on supply and demand, with the capitalist trying to pay each worker as little as they can without losing them to some other company; pay is not decided by which offered rate would be the most profitable, not on which one would be the 'fairest' according to some absurd conception of what it would mean to be fair or how much they 'should' be paid.

And, thanks to fiscal and monetary policy, we know how to ensure and have ensured that most people are employed most of the time, so both poory and richy will have jobs.