Justice And Economic Distribution Pdf
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The ultimate purpose of all the virtues is to elevate the dignity and sovereignty of the human person.
- Taking Action: Educating Ourselves on Economic Justice
- Introduction: The Idea of Distributive Justice
- Can Rights Combat Economic Inequality?
Taking Action: Educating Ourselves on Economic Justice
Distributive justice is often considered not to belong to the scope of economics, but there is actually an important literature in economics that addresses normative issues in social and economic justice.
A variety of economic theories and approaches provide many insights in these matters. Presented below are the theory of inequality and poverty measurement, welfare economics, the theory of social choice, the theory of bargaining and of cooperative games, and the theory of fair allocation. There has been a good deal of cross-fertilization between these different branches of normative economics and philosophical theories of justice, and many examples of such mutual influences are exhibited in this article.
The role of ethics in economic theorizing is still a debated issue. In spite of the reluctance of many economists to view normative issues as part and parcel of their discipline, normative economics now represents an impressive body of literature. One may, however, wonder if normative economics cannot also be considered a part of political philosophy.
In the first half of the twentieth century, most leading economists Pigou, Hicks, Kaldor, Samuelson, Arrow etc. The situation is very different nowadays. But there has also been a persistent ambiguity about the status of normative propositions in economics.
The subject matter of economics and its close relation to policy advice make it virtually impossible to avoid mingling with value judgments. Nonetheless, the desire to separate positive statements from normative statements has often been transformed into the illusion that economics could be a science only by shunning the latter. Robbins has been influential in this positivist move, in spite of a late clarification Robbins that his intention was not to disparage normative issues, but only to clarify the normative status of useful and necessary interpersonal comparisons of welfare.
It is worth emphasizing that many results in normative economics are mathematical theorems with a primary analytical function. Endowing them with a normative content may be confusing, because they are most useful in clarifying ethical values and do not imply by themselves that these values must be endorsed.
There have been many mutual influences between normative economics and political philosophy. In particular, Rawls' difference principle Rawls has been instrumental in making economic analysis of redistributive policies pay some attention to the maximin criterion, which puts absolute priority on the worst-off, and not only to sum-utilitarianism. It has taken more time for economists to realize that Rawls' difference principle applies to primary goods, not utilities.
Conversely, many concepts used by political philosophers come from various branches of normative economics see below. There are, however, differences in focus and in methodology. Political philosophy tends to focus on the general issue of social justice, whereas normative economics also covers microeconomic issues of resource allocation and the evaluation of public policies in an unjust society although there is now philosophical work on non-ideal theory. Political philosophy focuses on arguments and basic principles, whereas normative economics is more concerned with the effective ranking of social states than the arguments underlying a given ranking.
The difference is thin in this respect, since the axiomatic analysis in normative economics may be interpreted as performing not only a logical decomposition of a given ranking or principle, but also a clarification of the underlying basic principles or arguments. This kind of argument has to do with the reasons underlying a social judgment, not with the content of the all things considered judgment itself. It is hard to imagine if and how the leveling-down objection could be incorporated in the models of normative economics.
A final difference between normative economics and political philosophy, indeed, lies in conceptual tools. Normative economics uses the formal apparatus of economics, which gives powerful means to derive non-intuitive conclusions from simple arguments, although it also deprives the analyst of the possibility of exploring issues that are hard to formalize.
There are now several general surveys of normative economics, some of which do also cover the intersection with political philosophy: Arrow, Sen and Suzumura , , , Fleurbaey , Hausman and McPherson , Kolm , Moulin , , , Roemer , Young Focusing traditionally on income inequality and poverty, this field has been first built on the assumption that there is a given unidimensional measure of individual advantage. The gist of the analysis is then about the distribution of this particular notion of advantage.
More recently, partly due to the emergence of data about living conditions, there has been growing interest in the measurement of inequality and poverty when individual situations are described by a multidimensional list of attributes or deprivations. This has generated the field of "multidimensional inequality and poverty measurement". So far most of this literature has remained disconnected from the welfare economics literature in which interpersonal comparisons of well-being in relation to individual preferences is a key issue.
The typical multidimensional indices do not refer to well-being or preferences. But the connection is being made and the welfare economics literature will eventually blend with the inequality and poverty measurement literature. Excellent surveys of the unidimensional part of the theory include: Chakravarty , , Cowell , Dutta , Lambert , Sen and Foster , Silber The multidimensional approach is surveyed or discussed in Weymark , Chakravarty , Decancq and Lugo , Aaberge and Brandolini , Alkire et al.
The link between inequality and poverty measurement and welfare economics is discussed in Decancq et al. The study of inequality and poverty indices started from a statistical, pragmatic perspective, with such indices as the Gini index of inequality or the poverty head count.
Recent research has provided two valuable insights. First, it is possible to relate inequality indices to social welfare functions, so as to give inequality indices a more transparent ethical content.
The idea is that an inequality index should not simply measure dispersion in a descriptive way, but would gain in relevance if it measured the harm to social welfare done by inequality. There is a simple method to derive an inequality index from a social welfare function, due to Kolm and popularized by Atkinson and Sen Consider a social welfare function which is defined on distributions of income and is symmetrical i. For any given unequal distribution of income, one may compute the egalitarian distribution of income which would yield the same social welfare as the unequal distribution.
If the social welfare function is averse to inequality, the total amount of income in the equal-equivalent distribution is less than in the unequal distribution. In other words, the social welfare function condones some sacrifice of total income in order to reach equality.
This drop in income, measured in proportion of the initial total income, may serve as a valuable index of inequality. This index may also be used in a picturesque decomposition of social welfare. Indeed, an ordinally equivalent measure of social welfare is then total income or average income — it does not matter when the population is fixed times one minus the inequality index.
This method of construction of an index of inequality, often referred to as the ethical approach to inequality measurement, is most useful when the argument of the social welfare function, and the object of the measurement of inequality, is the distribution of individual well-being which may or may not be measured by income.
Then the social welfare function is indeed symmetrical by requirement of impartiality and its aversion to inequality reflects its underlying ethical principles. In other contexts, the method is more problematic. Consider the case when social welfare depends on individual well-being, and individual well-being depends on income with some individual variability due to differential needs.
Then income equality may no longer be a valuable goal, because the needy individuals may need more income than others. Using this method to construct an index of inequality of well-being is fine, but using it to construct an index of inequality of incomes would be strange, although it would immediately reveal that income inequality is not always bad when it compensates for unequal needs.
Now consider the case when social welfare is the utilitarian sum of individual utilities, and all individuals have the same strictly concave utility function strict concavity means that it displays a decreasing marginal utility.
Then using this method to construct an index of income inequality is amenable to a different interpretation. The index then does not reflect a principled aversion to inequality in the social welfare function, since the social welfare function has no aversion to inequality of utilities.
It only reflects the consequence of an empirical fact, the degree of concavity of individual utility functions. To call this the ethical approach, in this context, seems a misnomer. In the field of multidimensional inequality or poverty measurement, a key divide has separated the measures that evaluate the distribution in every dimension such as income, health, asset deprivation The latter has been praised Decancq and Lugo for being closer to the standard individualistic approach in welfare economics, and for making it possible to have measures that are sensitive to the correlation between disadvantages e.
An interesting feature of such measures is that a positive correlation among attributes of advantage or disadvantage worsens inequalities only if the elasticity of substitution between attributes, in the measure of individual multidimensional advantage, is greater than the inequality aversion in the social index.
To illustrate, consider two canonical distributions, with two individuals and two attributes:. If the attributes are deemed perfectly substitutable meaning that only the sum, potentially weighted, of the attributes matters for the assessment of individual advantage , and the inequality aversion is zero meaning that only the sum of individual indexes of advantage matters , the two distributions are considered equally good. But they also appear equally good if there is no possible substitution only the value of the worst attribute matters and inequality aversion is infinite only the worst-off individual matters.
In contrast, the first distribution appears worse if the attributes are substitutable and inequality aversion is strong the first distribution is then unequal, unlike the second one ; whereas it appears better if there is no possible substitution and inequality aversion is weak only one individual has a bad attribute in the first distribution, whereas both have one in the second.
The second valuable contribution of recent research in this field is the development of an alternative ethical approach through the axiomatic study of the properties of indices. The main ethical axioms deal with transfers. The Pigou-Dalton principle of transfers says that inequality decreases or social welfare increases when an even transfer is made from a richer to a poorer individual without reversing their pairwise ranking although this may alter their ranking relative to other individuals.
Since this condition is about even transfers, it is quite weak and other axioms have been proposed in order to strengthen the priority of the worst-off. The principle of diminishing transfers Kolm says that a Pigou-Dalton transfer has a greater impact the lower it occurs in the distribution. The principle of proportional transfers Fleurbaey and Michel says that an inefficient transfer in which what the donor gives and what the beneficiary receives is proportional to their initial positions increases social welfare.
Similar transfer axioms have been adapted to the measurement of poverty. For instance, Sen proposed the condition saying that poverty increases when an even transfer is made from someone who is below the poverty line to a richer individual below or above the line. The other axioms with which the axiomatic analysis has been made usually have a less obvious ethical appeal, and relate to decomposability of indices, scale invariance and the like. Characterization results have been obtained, which identify classes of indices satisfying particular lists of axioms.
The two ethical approaches may be combined, when one takes as an axiom the condition that the index be derived from a social welfare function with particular features. The multiplicity of indices, even when a restriction to special sub-classes may be justified by axiomatic characterization, raises a serious problem for applications. How can one make sure that a distribution is more or less unequal, or has more or less poverty, than another without checking an infinite number of indices?
Although this may look like a purely practical issue, it has given rise to a broad range of deep results, relating the statistical concept of stochastic dominance to general properties of social welfare functions and to the satisfaction of transfer axioms by inequality and poverty indices.
This approach, in particular, justifies the widespread use of Lorenz curves in the empirical studies of inequality. The Lorenz curve depicts the percentage of the total amount of whatever is measured, income, wealth or well-being, possessed by any given percentage of the poorest among the population.
This indicates that the Lorenz curve is approximately as in the following figure. Considerable progress has been made in the development of dominance techniques of the Lorenz type, with extensions to multidimensional inequality and to poverty measurement Aaberge and Brandolini Philosophical interest in the measurement of inequality has recently risen Temkin Most of this philosophical literature, however, tends to focus on defining the right foundations for an aversion to inequality.
In particular, Parfit proposes to give priority to the worse-off not because of their relative position compared to the better-off, but because and to the extent that they are badly off. This probably corresponds to defining social welfare by an additively separable social welfare function, with diminishing marginal social utility a social welfare function is additively separable when it is the sum of separate terms, each of which depends only on one individual's well-being.
This seems to raise the ethical stakes concerning properties of decomposability of indices or separability of social welfare functions, which are usually considered in economics merely as convenient conditions simplifying the functional forms although separability may also be justified by the subsidiarity principle, according to which unconcerned individuals need not have a say in a decision. The content and importance of the distinction between egalitarianism and prioritarianism remains a matter of debate see, among many others, Tungodden , and the contributions in Holtug and Lippert-Rasmussen It is also interesting to notice that philosophers are often at ease to work with the notion of social welfare or social good, or inequality as a numerical quantity with cardinal meaning, whereas economists typically restrict their interpretation of social welfare or inequality to a purely ordinal ranking of social states.
One may consider that this view supports the idea that poverty indices might summarize everything that is relevant about social welfare.
Surveys on welfare economics in its restricted definition can be found in Graff , Boadway and Bruce , Chipman and Moore , Samuelson Many topics of welfare economics are addressed in the more recent handbooks by Arrow, Sen and Suzumura , , Atkinson and Bourguignon , and Adler and Fleurbaey Their problem was then that in absence of any kind of interpersonal comparisons, the only principle on which to ground their judgments was the Pareto principle, according to which a situation is a global improvement if it is an improvement for every member of the concerned population there are variants of this principle depending on how individual improvement is defined, in terms of preferences or some notion of well-being, and depending on whether it is a strict improvement for all members or some of them stay put.
Since most changes due to public policy hurt some subgroups for the benefit of others, the Pareto principle remains generally silent. The need for a less restrictive criterion of evaluation has led Kaldor and Hicks to propose an extension of the Pareto principle through compensation tests.
Introduction: The Idea of Distributive Justice
We work for justice, equity, and compassion in our relationships and systemic change in our society. We know that the escalation of economic inequality undergirds a thousand injustices, from climate change to homelessness, from mass incarceration to low-wage worker exploitation. Economic inequality also disproportionately impacts people of color. A better world is possible, and we strive to be part of the solution. Effective justice ministry depends on partnership. Heads of Communion Send Letter to Wendy's.
The book has spurred many reviews and debates. See, e. The blog Law and Political Economy featured some seven response pieces. This is unsurprising given its topical and important subject: the growing gap between rich and poor in many countries around the world. Rising inequality, which Moyn and others attribute largely to neoliberal policies of free trade and free markets, is often blamed for the rise of populist movements and the resulting threats to liberal democracy pp.
press about economic inequality and wealth stratification (Friedman, ; Pope, ). A central question in desert-based principles of distributive justice concern what bpwnjfoundation.org
Can Rights Combat Economic Inequality?
Distributive Justice Pdf. These concerns make shale gas development an environmental justice issue. Further Cases of Priority This site is like a library, Use search box in the widget to. Plain text.