Individual Choices And Unacceptable Inequality

Nagel: Equality And Partiality VIII Chapter Eleven

Individual choices which are in themselves `unexceptionable’ can combine over time to produce unacceptable inequality. [How is that possible? Is not the result to be considered in the question as to what is `exceptionable’ and what Draconian punishments should we imagine for such disallowed choices? Or are they fine?] The effects are `grossly unequal’. [And what is the problem with that? The implied and bogus comparison in the title Partiality and Equality rears its head again.]

Family sentiment and differences in natural talent are not a problem because they are simply a `reflection of the way the world is’. [This is helpful. If everything in the world is fine as it is, and is so solely in virtue of that very fact, then we can stop worrying. We have a way of arguing from `is’ to `ought’ — or more accurately, we do not need one since they are the same thing.   Since that is impossible, we can dismiss Nagel’s argument here.]

Nevertheless, it is not possible to make a value judgment about these resulting inequalities, they are `neither right nor wrong’. [Really? If the causes are unexceptionable, why are not the effects equally so? Or are we saying that the causes combine in an unacceptable fashion but because they are part of the way the world is, we cannot form a judgment on the overall picture?]

Although they do not require justification, it might be desirable to eliminate them. [Is not something it might be desirable to eliminate not exactly something that needs justification? If it had a justification, that would mean it could not be desirable to eliminate it.]

Nagel cites this as Rawls’s view in opposition to Locke with his `mixing of labor’ approach to generation of property. They key difference is whether labor is the dominant factor (Locke) or social factors (Rawls).

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Since we are not responsible for our talents, we are not entitled to any deriving benefits beyond `the most immediate’. [What does `immediate’ mean? If any are legitimate, why not all? What would be the status of borderline benefits on the boundary between legitimate derived benefits and illegitimately derived ones? What type of theory could provide such a distinction?]

Benevolence, even were it to exist, is unequal to the task of manufacturing washing machines, because such tasks are uninteresting. Only economic benefit which accrues to the those adopting a personal standpoint could persuade people to perform such necessary tasks. The market is the only source of crucial directing information via price signals. Mill is cited to observe that the closeness of the connection between a man’s labors and his rewards is directly related to the enthusiasm with which he pursues uninteresting work. [This failure to adopt the impersonal standpoint was the reason for the failure of communism.]

Such acquisitiveness need not dispel the motivation to provide a social minimum, provided this can be done at reasonable cost. [This seems possibly true, but is not relevant because the actual cost is crushing viz. UK social security spending at £220bn p.a., cf. health ca. £120bn and education ca. £80bn. And even spending at these levels is inadequate apparently.]

The answer is to design a system that produces incentives without producing inequalities. [This is impossible because it is known from the `keeping up with the Jones’s’ effect that it is in fact more the inequalities that \emph{are} the incentives. A man is very happy with a high salary up until the moment when he learns that the man at the next desk earns £5 more. And people are made dissatisfied by seeing the lifestyles of wealthier people on television in the well-known phenomenon of `status anxiety’.]

Since there is (and likely to continue to be) substantial opposition to reducing inequalities due to class and talent, the choices left open to egalitarians are to attempt to move in the direction of the aim without arriving at it or hope for better people. [This seems to assume that currently no redistributive efforts are being made which is a long way from the truth. Also the implication is that class and talent are equally illegitimate sources of advantage which Nagel has previously admitted is not the case. There would be much more support for elimination of class-derived benefits than for talent-driven ones. Though of course that might just be because everyone thinks they have (some) talents while most people are aware that they are not members of the aristocracy. It would certainly be best for the rest of us if Nagel and his egalitarian cohort opts for the second choice of waiting for more egalitarian people, while we can remain optimistic that further `improvement’ is unlikely. Better yet, maybe people will improve in the opposite direction and become less risk-averse.]

Nagel expresses unease about the existence of extreme poverty in relatively wealthy societies. [Is this not exactly the wrong way around? We should be most worried about poverty in poor societies because those people can do little about their situation. Poor people in the UK have been fortunate enough to be living in the fourth largest economy in a world of 200 countries and have still failed to make anything of any of the manifold opportunities for financial advantage. These are so apparent to the larger world that people make dangerous sea voyages merely to gain entry to Europe.]

Everyone is to have `decent conditions’ at public expense. [Again, in the UK context, if £220bn of social security spending is inadequate in the context of government income of £500bn and total spending of £700bn, what is? What justification can there be for borrowing at those levels such amounts from future taxpayers, some of whom will be poor, to fund a social minimum today? Why are current taxpayers to be privileged so dramatically over future ones?]

A negative income tax is proposed, which would have the effect of subsidizing low wages. [How is this compatible with the admitted crucial importance of price signals in the market for efficient allocation of labor? And in any case, the current UK regime of tax credits in fact embodies this idea. And in fact we have a growing suspicion now that Nagel is arguing for the status quo. Or more accurately, since he does not fully appreciate how even the current system is too egalitarian, for a reduction in the current levels of progressiveness in the taxation system.]

The provision of the minimum would eliminate any queasiness of individuals earning far above the social minimum. [Do any such individuals actually exhibit such unease currently? Perhaps Nagel imagines that in his new utopia, such rather squeamish types could be high earners. Why would that be?] This attitude will allegedly do nothing to dampen the necessary competitive instincts that drive creativity in the economy. [This is exactly false, since progressiveness in the tax system is precisely damping those instincts. As we were previously reminded by Mill, the enthusiasm of the laborer is correlated to the closeness of the relation of reward to effort. Provision of the social minimum reduces the effects of the incentives of inequality and reduces that correlation.]

There is a task of avoiding moral hazard among the group subsidized up to the social minimum which Nagel thinks `should be soluble’ without specifying the answer. [Unfortunate, this, since the problem of high marginal ‘tax’ rates has proved immensely difficult for decades with Iain Duncan Smith making the latest high-cost and and high-risk attempt to address the problem currently.] The solution will rely on the fact that most people want more than they have. [True, but that does not seem to be motivating the poor very strongly at present.]

`Severe relative deprivation’ (my emphasis) is one of the `worst aspects’ of inequality. [How is addressing this compatible with the recent remarks about people being free to pursue, without any pangs of conscience, earnings far above the social minimum? By doing so, they are hardly reducing relative inequality. Would not this imply that they should restrict themselves to earning amounts just above the social minimum? Presumably brain surgeons would do this by working one day a week. That might be a problem for people in need of their services, but they could take comfort from the fact that such services would be equally unavailable for persons on the social minimum. And all comfort comes from being the same as everyone else, in the same way that all distress results from difference.]

The `right’ of everyone to a decent minimum is again qualified as being subject to economic feasibility. [And again, it is not noted that we already can see that it is not feasible because even the current approach to it is dramatically inadequate from the perspective of those advocating the minimum and also totally unaffordable. While we are discussing progressiveness, why do not some bad philosophers — indeed, some people not equipped or interested in pursuing the topic — receive unpaid assistance from experts so that they too can publish philosophical articles in academic journals? Why does society permit such an outrageous insult to the public sources of self-respect of many deserving individuals?]

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One positive development for Nagel would be general disapproval of those who earn high wages. [We certainly see this today in the controversy around bankers’ wages. But has Nagel not noted that this very disapproval is a motivating factor for some of those receiving the wages? His positive development would in fact be counterproductive for his aims.] We would not be happy going to Italy on holiday unless everyone could. [Has Nagel actually been to a popular holiday destination recently? It is already bad enough.]

Competitive instincts are to be replaced by `peer approval’. [Is it acceptable if one’s peers are denizens of an investment bank trading floor? Presumably not, although Nagel thinks that only clear definition of standards and judges are required. Nagel here admits inter alia that he is only familiar with academic life, which surprises no-one.]

Only in corrupt countries can civil servants and the military be motivated to do their work well. [This is strange. The financial rewards in the public sector are highly adequate at the higher levels and include excessively generous pension benefits. And the military as a group do not sort well with the class of civil servants.]

`Market socialism with medals’ is the term for the replacement of economic incentives with peer approval. [But even Nagel does not think this is credible. Why should we?] Admitting this as impossible, Nagel retreats to the first option of gradualism. [So again, we can show him how much gradualism we already have and ask where the line is to be drawn. He thinks we are far short of it at present. What is the correct number for social security spending? £300bn? £400bn? Finally Nagel reverses himself and says that we must continue to lust after the impossible and have more egalitarianism.]

Chapter Twelve

The stated aim of the chapter is to reduce any impression that Nagel is hostile to all inequality. Nagel notes that it is difficult to prevent the disease egalitarianism from `infecting’ other values. [This is surely true because if it is right in one sphere, what reasoned founded set of distinctions would prevent it from being right in all of them? Why do I not have a right to date movie stars some times, since some people do — thus, incidentally, riding rough-shod over my fragile self-esteem, based as it is on public respect.]

Educational and aesthetic stratification can also cause unease. [The plastic surgeon’s knife awaits. There is no reason why it should not move people downwards to the decent social minimum of beauty as well. And everyone should be awarded a PhD.]

Mill has attempted to address this in the context of an assumption of the equal value of persons by further assuming an unequal division of value in uses of time or pleasures. [This rather crucially depends on the definition of the undefinable term `value’.] Nagel notes that this destroys the formal equality of value because some people are not fitted for or do not choose to pursue `higher pleasures’. Nagel’s response is to divorce the value of some things from the pleasure of their enjoyment. And the pursuit of the more valuable is to be accorded a higher `moral weight’. [This presumably means that if I can be used to work harder at the cost of my lower pleasures in order to fund your higher pleasures, that is the correct decision. But if I want to go to the opera, you can starve. Or more of you can than if I wanted to play dominoes.]

There is no evidence for the value of something beyond the value that people put on it (Mill). [How is this compatible with the existence of higher and lower pleasures?] The value of an object is distinct from the enjoyment that people derive from it. [Yes, but would not a ranking in the latter inexorably entail the same ranking in the former? Or do some people prefer less pleasure than they could have had?]

Nagel agrees that `moral equality’ does not entail any other equality [ — without noting the absurdity in context of moral equality claims therefor.] Preserving natural beauty because of its value to individuals is to get things the wrong way round. [So we should be happy about a planet devoid of people but retaining the Grand Canyon.]

Artistic and educational excellence may be permitted since its products eventually benefit everyone. [What about those Nagel admitted were unfitted to appreciate the higher pleasures? The answer is that beauty is valuable even if only a few appreciate it. There is a pleasure to be had in burning cats to death, even if the relevant cognoscenti are few in number. We learn later that he `judgment of experts’ is to be trusted here, so we can consult experienced cat-torturers on the best ways of furthering their enjoyment, which is not related to how much they enjoy actually watching a burning cat, but is more related to the intrinsic value of that pursuit, beyond its instantiations. Maybe thinking about burning cats is where the value lies.]

Nagel notes that there is a problem for his theory of intrinsic value in that if everyone went blind, destroying all of the paintings in the Louvre would not be a further loss [ — but does not explain how to counter this rather devastating objection. It may be that that is just true of art, he thinks.] There is value beyond value for persons. [Value for cats, for example. Paintings visible only in the ultraviolet would be unedifying for humans, but doubtless fascinating for bees.]

If these intrinsic values exist, they should be fostered by the state. [They do not. But even if they did, why? We would be removing value pursuit opportunities from individuals to pursue other `value’. What would legitimize that, beyond a certainty that the `public committee on value’ was more likely to be right about these questions than individuals making decisions for themselves?]

Nagel cites Rawls as being in favor of something that looks like a balanced budget argument, though he himself thinks this goes to far. [Which is just as well, because such a thing would have a catastrophic effect on social security spending, by far the largest line item in government expenditure.] Further expenditure on intrinsic values is to be allowed. [How does that work, since we are unable to afford even the provision of the social minimum Nagel wants? Are we to subsidize the opera ahead of giving everyone food who needs it or not? If not, we will never get to the opera. Nagel is dividing up some theoretical cake into seven parts each numbering 80$\%$ of available resources.]

Amazingly, Nietzsche is enlisted in support of the idea that in artistic respects, societies should be anti-egalitarian. [Why only there? Is it because of the absurd consequences in this domain of Nagel’s favored approach in economics?] Equally amazingly, the tendency towards equality in the public school system is to be `distrusted’ and is `inexcusable’. [How can Nagel maintain this consistently with any of the other claims he has been making?] The lower classes can not escape the mediocrity which is their lot if they are state educated. [This assumes that there are no examples of the state educated having achievements of any stature, which is false.]

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The effects of class status `never depend on choice’. [What about the choice to remain in one’s original class? What about the choice to spend one’s leisure time on football rather than opera? Since the public committee has decreed that the latter is a higher and the former a lower pleasure, then it must be possible for people to make mistakes about what is valuable for them.]

We now come to the question as to why art and science are different to money [ — by way of a plea for lower academic salaries. Because scholarship is to be its own reward.] The answer is that a life of luxury and refinement is good for the person who leads it rather than good in itself. And that cannot be accepted because of the deleterious effects on those who miss out. The deleterious effects on those who miss out on a prominent scientific career can be accepted however because those careers either are intrinsically valuable or because they benefit anyone. [How does an illiterate drug addict living on social security benefit if the LHC discovers the Higgs boson? And would they vote for it?] Egalitarianism is not be allowed to eliminate haute cuisine just because not everyone can have it. [But is not that exactly what will happen if people earning well above the social minimum are deprecated and take such deprecation seriously? Or will the public values committee allow some rich people to spend their own money in restaurants providing they also have enough social achievement medals?]

Next Section: Do Human Rights Do Too Much?

By Tim Short

I am a former investment banking and securitisation specialist, having spent nearly a decade on the trading floor of several international investment banks. Throughout my career, I worked closely with syndicate/traders in order to establish the types of paper which would trade well and gained significant and broad experience in financial markets.
Many people have trading experience similar to the above. What marks me out is what I did next. I decided to pursue my interest in philosophy at Doctoral level, specialising in the psychology of how we predict and explain the behaviour of others, and in particular, the errors or biases we are prone to in that process. I have used my experience to write The Psychology of Successful Trading. In this book, I combine the above experience and knowledge to show how biases can lead to inaccurate predictions of the behaviour of other market participants, and how remedying those biases can lead to better predictions and major profits. Learn more on the About Me page.

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