Ethics and Economics

Week 8

Justice and Democracy

Tomáš Cahlík

Outline Justice as Fairness

Justice

Democracy

Majority Voting

Justice as Fairness What is the right thing to do? – Episode 8

John Rawls (1921 – 2002)

Moral force of actual contracts

How do they bind or obligate?

Argumentation is either

Consent based (autonomous reasoning) or

Benefit based (heteronomous reasoning - reciprocity)

But, consent does not mean fairness (argument for Paternalism) and

Agreement is necessary for the definition of benefit

How do they justify the terms they produce?

Kant, Rawls: they cannot

Justice as Fairness

John Rawls

Actual agreement (contract) x Hypothetical

agreement

Properties of justice can be derived from a

hypothetical contract only

Contracting under the veil of ignorance creates

the condition of equality among bargaining

parties

Justice as Fairness

John Rawls

Distributive Justice (income, wealth, opportunities, power..)

Under the veil of ignorance, we will not take the utilitarian principle

two principles

Equal basic fundamental rights and liberties

Difference principle: differences are permited if they are part of a system that makes them work to the benefits of the least well off (maximin principle)

Justice as Fairness John Rawls

Distributive justice is not about moral desert, it is

about entitlements under existing rules; a just

scheme satisfies people´s legitimate expectations

as founded upon social institutions

Discussion: „Difference should not be based on

factors people cannot influence themselves“

Affirmative Action – supporting arguments

Corrective (measurement problem)

Compensatory (problem of collective

responsibility)

Social purpose (common good)

Justice as Fairness

John Rawls

Objections against the difference principle

What about incentives? (Trade off

between efficiency and equality)

What about effort? (Distribution should

not be based on factors people cannot

influence)

What about self-ownership?

Justice

What is the Right Thing to Do? - Episode 10

Aristotle (384 – 322 BCE)

Justice is to give people what they deserve

Teleological reasoning: „Distribute the best flutes to the best flute players“

Telos = goal, end, purpose

Justice

More about Aristotle´s ideas about justice

Justice is the greatest of virtues

Retributive x distributive justice

Procedural justice

Beyond justice

Justice

Law and justice in Roman Law

Justice is mother of law

Summum ius, summa injuria (Greatest law,

greatest injustice)

Marcus Tullius Cicero (106 – 43 BCE)

Active and passive injustice

Spontaneous x prepared injustice

Fit quod dicitur – What is said ought to be

done . A deal is a deal.

Democracy - Introduction

Basic Aim:

Democratic Justice – link to lecture 22 of the

Open Yale Course „The Moral Foundations of

Politics“, we will discuss different topics from

lectures 22 to 25 of this course

Basic Problems:

Tyrany of majority

Only unanimous decision about public goods is

efficient, but we usually apply majority voting

Democracy: development of the

idea

Critics

Plato (Republic): was afraid of little knowledge of

leaders and mob behavior

Tocqueville: democracy copes better with egalitarian

tendencies than monarchy, but was afraid of the

tyranny of majority, he did not see any separation of

power

J.S.Mill and his harm principle

Democracy: development of the

idea Federalist papers

Democracy without factions – old Greece

Two factions, if petrified, can lead to the tyranny of

majority, minority does not have any incentive to

participate in the democratic process

Many factions are based on the wealth distribution

It is impossible to get rid of factions

Basic task of politics: managing factions for not

destroying the common interest

Democracy: development of the

idea Federalist papers

Solution is in having multiple crosscutting cleavages

= many changing factions, it creates the

institutionalized uncertainty of outcomes and gives

everybody an incentive to remain commited to the

democratic process

Larger federation gives better chance for creating

multiple crosscutting cleavages

Democracy: development of the

idea Federalist papers

Non-tyrannical republic rather than democracy

Madison: People are not angels

Madison: „Ambition must be made to counteract

ambition“

Checks and balances

Vetoes

Bi-cameral system

Supermajority requirements

Federalism

Does the system of checks and balances work?

Democracy: development of the

idea Pluralist theory of democracy

Robert Dahl

Polyarchy

He thinks that we in reallity do not have any

mechanism that counteracts ambition with ambition

Majority Voting Does general will (social welfare) exist?

Jean-Jacques Rousseau: general will x sum of

individual wills

Marquis de Condorcet: paradox of majority voting

Voter Preferences

I A > B > C

II C > A > B

III B > C > A

I & II prefer A to B

I & III prefer B to C

II & III prefer C to A

Motion and amendments: Order of voting matters

Majority Voting

Kenneth Arrow and impossibility theorem

1951 „Social Choice and Individual Value“

Public Choice Theory: economists converge to

the persuasion that there is no such thing as a

social welfare function

Majority Voting

Why majority voting?

John Locke:

It is not about general will, it is about power

Majority voting limits the possibility of domination (in

comparison with a monarch´s power)

Majority Voting

Why majority voting?

James Buchanan and Gordon Tullock

1952 „The Calculus of Consent“

Behind the veil of ignorance, how would you think about

the decision procedure that should govern you?

Two types of costs: expected cost for you if the society

does something that you do not like, costs linked with

organizing an action against it

Individual prefers the decision procedure that minimizes

the sum of both types of costs

It can be any type of voting, so there is nothing special

with majority voting

Majority Voting Why majority voting?

Criticism of James Buchanan and Gordon Tullock

There is an implicit assumption that we prefer the status

quo behind the veil of ignorance

That is why their approach favorizes the satus quo

If you do not know if you would like or dislike the status

quo, you would choose majority voting

Is majority voting the same as democracy?

Majority Voting J. A. Schumpeter and his „market theory of

democracy“

1942 „Capitalism, socialism and democracy“

2 chapters on democracy: The Classical Theory of

Democracy and Another Theory of Democracy

Parties try to sell programs, voters are buyers, competition

influences the behavior of parties, it disciplines the

political elites and prevents them ultimately from

exercising domination

Problems:

Imperfect competition

Struggle over money

Devaluation of participation

Minimal conception of democracy, but not negligible

Majority Voting Anthony Downs

1957 „An Economic Theory of Democracy“

Median voter theorem: majority rule voting system will

select the outcome most preferred by the median voter

Builds on 1929 Harold Hotelling Principle of

minimum differentiation described in „Stability in

Competition“

Outcome: convergence of political programs.

You can get competition over policy e.g. through

primaries. Problem is, that you can get policy

alterations, e.g. nationalization – denationalization

Competition over personalities and over pork