In his recent CapX piece, “It’s not inequality that gets people angry – it’s unfairness”, Oliver Wiseman notes some interesting recent empirical research suggesting that children instinctively care about fairness rather than about equality. He goes on to relate this insight to popular opposition to bankers – it wasn’t the inequality of their high pay that upset folk; it was the perception that they secured their high pay unfairly, supported by state bailouts and a rigged system.
So far, so good. But towards the end of his piece Oliver claims that “fairness… is something capitalism can – and should – deliver.” I want to persuade you that that is wrong. Capitalism will not and should not deliver a fair society.
First, let us understand what “fairness” really means. Many politicians attempt to treat it as a Humpty Dumpty-esque “It means whatever things I like” term. But fairness has a well-established meaning, embedded in UK and international law and policy-making for hundreds of years.
Being fair is a special kind of being proportionate, of which equality, proportionality, and desert and the best-known forms. That is to say, sometimes being fair does mean being equal (“proportionality to unit”). Sometimes it means proportionality to action (what we call “desert”). Sometimes it means proportionality to some other relevant dimension, such as proportionality to income or need or appetite. But to be fair is always a matter of being proportionate.
Fairness is related to justice, but is not the same as it, for while justice is a moral concept and an ethical/normative obligation (i.e. one always ought to be just), fairness is a technical concept and an ethical consideration (i.e. sometimes it is right not to be fair, but one should take account of that unfairness in working what is right).
Fairness is embedded in all kinds of policy-making. In our legal system, “equity” (fairness) ranks above the letter of the law. In regulation, telecoms firms and pay-TV platforms are often obliged to offer “fair, reasonable and non-discriminatory” access. Proportionality is built in to our income taxes and many other forms of taxation.
Furthermore, Oliver’s notion that capitalism and free markets ought to promote fairness reflects a correct standard instinct. Markets will tend, other things being equal, to reward choices that reflect an accurate assessment of virtue and merit, and to punish bigotry and discrimination.
If you think people with bushy eyebrows are not as good computer programmers as those with thinner eyebrows and so refuse to hire them, then if you are wrong you will tend to be choosing your staff from a slightly narrower pool and so will tend to get slightly lower quality or slightly more expensive staff. Over time that will mean you make lower profits than your less bigoted rivals. If you own the firm you may tolerate lower profits as the price of your bigotry, but if you are a manager your lower profits will result in your replacement by someone able to make higher profits – i.e. someone less bigoted than you.
Such processes will promote fairer hiring. Similar processes will mean that competition reduces other forms of unfairness in well-functioning economies. More broadly, competitive processes in politics, sport or other parts of life will mean that outcomes are proportional to merit, in some sense (perhaps not ethical merit — e.g. not necessarily to effort — but, maybe to merit or “virtue” in the Greek sense of the underlying excellence of things).
But it is a mistake to think that such tendencies to bear down on unfairness are, or should be, without limit. Specifically, there are a number of fundamental ethical principles that trump fairness and that are central building blocks of the economy and broader society.
The three best-known of these are family, promises (“contracts”) and property.
– I give my children Christmas presents and do not give them to other children because my children are my family, not because my children are more deserving of presents than other children are or for any other fairness-related reason.
– If I promise to help you move house next Sunday afternoon, I do not go and do it because you are more deserving than others or because I’m equally helping everyone. I do it because I promised.
– If my £5 is really my £5, I’m not obliged to spend it equally in each of the local shops or to spend it in the shop most deserving of my custom. It’s my money so I can spend it how I want to.
These three matter, particular, because family, promise and property are the traditional three building-blocks of society. For example, in his A Treatise of Human Nature (B3.2.11), Hume quotes the stability of possessions, their transfer by consent, and the keeping of promises as the “three fundamental rules of justice” that make human society possible.
Because society is built upon principles that rank ahead of fairness – on matters of justice or broader morality where being unfair is the right thing – we should expect that a just society will be one in which there is and ought to be an irreducible core of unfairness. That will be reflected across society and the economy. When we use our property or act in accordance with contracts or enter into business projects with our family (e.g. lending them money), we are acting justly even though we are frequently acting unfairly.
Thus Oliver is mistaken. Although a well-functioning capitalist market economy will tend to drive out certain forms of unfairness, it will not and should not aspire to produce outcomes that are completely fair. Just as fairness is more important than equality, family, promises and property are more important than fairness.