Tuesday, December 17, 2013

Fairness is Shared by Our Environment

Hunters have enormously volatile incomes: one day they may catch more than they can possibly eat; the next day, nothing. Kaplan discovered that Aché hunters came home empty-handed slightly more often than not. At such a strike rate a hunter would expect to do without food for an entire week about once every year. Even a skilled hunter is largely at the mercy of good or bad luck – but others in the tribe may have better luck on the same day. It’s easy to see why a strong tradition of sharing might have arisen.

Farmers, by contrast, are less exposed to individual luck. Bad weather will probably affect neighbouring farms too, so there’s less to be gained from pooling risks. And there’s much to be lost: insurers invented the term “moral hazard” to describe cases where people are lazy or careless because they know they’re insured. Sharing encourages scroungers.

So maybe views of fairness are shaped by the environment in which we find ourselves. Hunters value sharing; farmers value self-sufficiency through hard work. Both are admirable virtues and both are appropriate to the situation.

Mostly, we seem to think like farmers. The government does tax and redistribute but spending on roads, police or the army isn’t redistribution. The National Health Service is probably the most prominent, beloved and well-funded expression of hunter morality we have – after all, anyone can fall sick without warning. But an Aché-style tax rate of 80 or 90 per cent for all seems unimaginable.

The importance of luck in the modern economy might push us towards the fair-shares-for-all morality of the hunter. But if the lucky know they can stay lucky for a lifetime, why share at all?


- Tim Harford

This reminds of fascinating 2012 Princeton commencement speech - "Don't Eat Fortune's Cookie" by Mike Lewis:

But it also is relevant to new graduates of Princeton University. In a general sort of way you have been appointed the leader of the group. Your appointment may not be entirely arbitrary. But you must sense its arbitrary aspect: you are the lucky few. Lucky in your parents, lucky in your country, lucky that a place like Princeton exists that can take in lucky people, introduce them to other lucky people, and increase their chances of becoming even luckier. Lucky that you live in the richest society the world has ever seen, in a time when no one actually expects you to sacrifice your interests to anything.

All of you have been faced with the extra cookie. All of you will be faced with many more of them. In time you will find it easy to assume that you deserve the extra cookie. For all I know, you may. But you'll be happier, and the world will be better off, if you at least pretend that you don't.




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