if you're not drowning, then justice is done

Don Boudreaux (does reading Cafe Hayek make me a masochist, BTW?) thinks he has something here, but he doesn’t:

If (by whatever criteria) the process is fair, then the outcomes are fair.  If the process is not fair, then at least some outcomes are lamentable.  If those lamentable outcomes involve too little income for Smith and too much for Jones, then this income difference is evidence of the unfair or skewed or crony-fied process.  But the object of my concern in such situations isn’t the income difference as such; rather, it’s the unfair or skewed or crony-fied process that gave rise to it.

Forget about how much work is being done here by the parenthetical; this is mostly specious and otherwise useless. Let’s use some real life examples:

Let’s say black people are enslaved and forced to labor for centuries. I bet Prof. Boudreax and I would certainly agree that process is unfair.

Now let’s say that all slavery is abolished, and the entire socioeconomic system (somehow) peacefully replaced with a system that Prof. Boudreaux considers completely fair on a forward-looking basis. Are outcomes now fair? I would argue, no, because the inputs are biased then even an ideal process can’t produce ideal outcomes. But let’s say that the process iteratively produces improved outcomes. At what point does it produce ideal inputs that then lead to truly ideal outputs via the ideal process? One iteration? Two? Ten? Never? What if the theory of the second-best kicks in – where, once any condition of optimality is changed, you cannot presume that you can maximize your target goal by maintaining all the conditions that would have produced the ideal outcome under the original optimal set?

What if a process that is ideal at some time t produces outcomes that alter the process at some time t+x? Take Robert Nozick’s infamous example of Wilt Chamberlain, whereby ideal inputs and an ideal process can produce outcomes many would consider unfair (though, obviously, not Nozick or Boudreaux [or probably Wilt the Stilt]). What if Wilt decides that, now that he is vastly richer than everyone else in society, he is going to bribe a politician to sell him state assets at below-market prices. What if inequality, even inequality produced via ideal processes with ideal inputs, inexorably produce outcomes that lead to non-ideal processes?

What about luck? What if what distinguished Prof. Boudreaux’s Jones and Smith was some completely unpredictable and random event – an asteroid incinerates Jones’ barn, a once-in-a-thousand-year storm destroys Smith’s ship? What determines whether Facebook becomes a world-beater and not Friendster or MySpace? Can even an ideal process mitigate for those inequalities? What if luck, or chance, or events beyond human control and understanding, drive most of the gaps between life outcomes?

I agree with Prof. Boudreaux more than he probably would suspect. I believe that a system that allows for private property, broad freedom to transact, and inevitable dispersion in the distribution of wealth is likely ideal, both from a utilitarian and non-utilitarian perspective. Yet Prof. Boudreaux accuses those who worry about these inequalities of smallness, of envy, of corroded character. I would argue that it is he who has exploited a certain myopia and smallness to leverage a handful of economic insights into a worldview that justifies a corrosive lack of empathy and a smallness of the soul.

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