What this doesn't seem to address is the difference between fairness as outcomes being identical regardless of inputs and fairness as outcomes being proportional to contribution. There, very simplistically, conservatives and socialists seem to have different intuitions. I presume there was some socio-economic optimum that balanced the capable going on strike with the less capable banding up and taking from the capable and that within a group with a balance that was inter-group competitive both intuitions were evolutionarily stable in individual psychologies.
The topic is so large that I am cutting it into meaningful chunks. Here, I focused on fairness in small situations (a household). My next post will be on fairness at the level of society. Later, I will explicitly discuss specific political philosophies like socialism and libertarianism,
What your comment raises is the question of how contributions might play a role. For Binmore, it plays a role via bargaining power (which your idea of strike evokes). I will need to first discuss Binmore’s generic theory of how bargaining power influences fairness discussions. And then how different things (like work and talent) influence bargaining power.
I don’t follow at all. Let me voice out my concerns (or misunderstandings?)
Fairness relates to our feelings about the costs and benefits of cooperation (or coordination). Using economics as an illustration, a fair wage is the best wage a person can get voluntarily from (theoretically) unlimited numbers of competing employers. The employment is the cooperative arrangement, with one supplying their effort and time, the other paying the salary. Similarly, a fair price for coffee is the best price I can get absent coercion.
I do not get what utilitarianism has to do with this. Nor do I get how anyone joining a team or relationship would be able to even remotely calculate long term utility across multiple players. This establishes a ridiculously hard (impossible?) to calculate standard of fairness. Nor is it (as you mention) binding. So this is a total fail in my book.
Egalitarianism is even worse. It sweeps the entire issue of contributions vs rewards under the rug. The incentives in an egalitarian system is for everyone to free ride, and contribute nothing. This totally destroys cooperation, leading to a situation where we are better going solo than cooperating in the first place.
I don’t want to go on too long, but I think fairness is better framed as the best voluntary arrangement of costs and benefits one can get among competing alternatives (as per the economics examples). A great example of fairness is revealed when we look back at voluntary agreements among actual pirates. But that will take us too far…
Thanks for your thoughtful comment. I think the issue is that your examples, even if they feel intuitive, define fairness in each case in a rather ad hoc way. My aim is to step back and ask more fundamental questions without taking those intuitions for granted.
Why is it “fair” to get the product of your work? Why is it “fair” for the value of your work to be determined by the market price? Why is a fair price the best one I can get absent coercion?
Binmore does not start from intuitive statements. He builds a more general framework that can help us justify them, or sometimes reject them. That is also why I bring in the utilitarianism versus egalitarianism debate. This is the main debate in political philosophy when it comes to justifying the kind of statements you make.
My next post will move more directly to fairness at the level of society, and there I will discuss how market mechanisms fit into the picture.
On egalitarianism, I should say that Rawlsian egalitarianism does take incentives into account. It allows inequalities when they improve the position of the least well-off.
And on your last paragraph, I actually agree with much of it. But I would say that the idea of the best voluntary arrangement among alternatives leads back to a bargaining logic that has an egalitarian solution when people have equal bargaining power.
I am sure you don’t have time to debate with every person commenting, but food for thought as you progress in this series (apologies for the length).
First, my definition isn’t ad hoc or intuitive. It is based upon evolutionary concepts that humans cooperate for mutual benefit, but to do so they must overcome the dilemma of cooperation — namely that it is best to minimize contributions (costs) and maximize share of the rewards (benefits). This dynamic completely undermines cooperation.
Humans solve this dilemma in part based upon reputation and choice. In a system (such as existed with hunter gatherers) where people could greatly choose who they cooperated with, then there is immense value in being seen as having a good reputation and thus being chosen as a partner. Good partners are those with talent, and those which offered terms proportionate to what they contribute. Good partners gain power in choice. Everyone wants to play with those that are talented and… wait for it….”fair.”
Fairness is an emergent term that applies to cooperative agreements, that accounts for contributions and costs relative to what other choices and alternatives exist. The fairest real deal I can get is the best terms (rewards minus my contribution) that I can get others to agree (knowing that others are watching me and judging me). In general, more choices, and less friction in switching and choosing, is better, but not always.
Binmore seems to me to conflate fairness with either utility or stability (an equilibrium outcome).
I am interested in hearing your argument on how voluntary arrangements lead to egalitarianism. This word is defined many ways, but if you mean to define it as equal rewards regardless of contributions, then I would say it is almost always incorrect. Equal rewards regardless of contributions is at best a special case where contributions are hard to measure or otherwise required with minimal incentives.
Hi Swamy, your take shares a lot of the conceptual viewpoint I adopt in this series. I would agree with what you say here: "Fairness is an emergent term that applies to cooperative agreements, that accounts for contributions and costs relative to what other choices and alternatives exist. The fairest real deal I can get is the best terms (rewards minus my contribution) that I can get others to agree to."
But I believe you draw a different conclusion because your focus is narrower on exchanges, while Binmore and I would consider all possible interactions. The outcome of Alice and Bob cooperating might depend on Candice not sabotaging their effort or stealing the fruit of their work.
It might hurt our intuition of fairness, but if we want to start from a stance that is not already taking a moral point of view and if we want to think of fairness as "The fairest real deal I can get is the best terms that I can get others to agree to," then this "others" would also include non-participants in the market exchange. It is just a matter of fact. If Candice is not willing to respect the terms of Alice and Bob's agreement, they might have to pay for a police force to protect their property, hence a potential loss.
Like Binmore and most economists, I am favourable to market mechanisms and think they are very useful for aggregating information and organising the allocation of resources. But the market is part of the Game of Life. For its outcomes to work, they need to be accepted by all. It is, in a sense, a trivial observation that is missing in libertarian takes.
Now, a libertarian (I am not saying you are necessarily one) would say, but it is unfair, Candice has no right to claim anything about what Alice and Bob do. But remember that, from Binmore's naturalistic perspective, there are no rights pre-existing the social contract. Hence, saying Candice's claim is unfair requires a skyhook: the invention of "natural rights" that predate social interactions and that would make Candice's refusal to accept the terms of Alice and Bob's cooperation unacceptable in principle. Note that I am not saying that Candice's claim is fair either, only that fairness is the product of a social contract and that only social contracts that are socially sustainable, that is, those that keep Candice on board, resist the test of time.
Thanks, for your response. No, I am not a libertarian, nor do I believe in fairness skyhooks or natural rights.
I am extremely intrigued by how Binmore and you are extending the concept of fairness to external parties which have little or nothing to do with the cooperative arrangement. I certainly wouldn’t ever use the word unfair to describe a third party using coercive interference. But I also am skeptical about extending the term fair to arrangements that are resistant to 3rd party interference. It feels again like we are way overextending what fair means — first by extending it to mean utility and now extending it to stability.
I am definitely waiting for the next installation!
This is great, but something keeps bugging me: preferences get treated as stable inputs here, and I don't think they are.
"I hate dishwashing" isn't just a fact Bob brings to the table — it's partly a claim he's making because he's at the table. The stronger he states it, the better his position. So the preference and the bargain aren't separate steps.
Stating the preference is already a move in the game.
Is the answer here something like tit-for-tat — that repeated interaction corrects for strategic preferences over time?
What this doesn't seem to address is the difference between fairness as outcomes being identical regardless of inputs and fairness as outcomes being proportional to contribution. There, very simplistically, conservatives and socialists seem to have different intuitions. I presume there was some socio-economic optimum that balanced the capable going on strike with the less capable banding up and taking from the capable and that within a group with a balance that was inter-group competitive both intuitions were evolutionarily stable in individual psychologies.
The topic is so large that I am cutting it into meaningful chunks. Here, I focused on fairness in small situations (a household). My next post will be on fairness at the level of society. Later, I will explicitly discuss specific political philosophies like socialism and libertarianism,
What your comment raises is the question of how contributions might play a role. For Binmore, it plays a role via bargaining power (which your idea of strike evokes). I will need to first discuss Binmore’s generic theory of how bargaining power influences fairness discussions. And then how different things (like work and talent) influence bargaining power.
Thanks. I look forward to it.
I don’t follow at all. Let me voice out my concerns (or misunderstandings?)
Fairness relates to our feelings about the costs and benefits of cooperation (or coordination). Using economics as an illustration, a fair wage is the best wage a person can get voluntarily from (theoretically) unlimited numbers of competing employers. The employment is the cooperative arrangement, with one supplying their effort and time, the other paying the salary. Similarly, a fair price for coffee is the best price I can get absent coercion.
I do not get what utilitarianism has to do with this. Nor do I get how anyone joining a team or relationship would be able to even remotely calculate long term utility across multiple players. This establishes a ridiculously hard (impossible?) to calculate standard of fairness. Nor is it (as you mention) binding. So this is a total fail in my book.
Egalitarianism is even worse. It sweeps the entire issue of contributions vs rewards under the rug. The incentives in an egalitarian system is for everyone to free ride, and contribute nothing. This totally destroys cooperation, leading to a situation where we are better going solo than cooperating in the first place.
I don’t want to go on too long, but I think fairness is better framed as the best voluntary arrangement of costs and benefits one can get among competing alternatives (as per the economics examples). A great example of fairness is revealed when we look back at voluntary agreements among actual pirates. But that will take us too far…
Thanks for your thoughtful comment. I think the issue is that your examples, even if they feel intuitive, define fairness in each case in a rather ad hoc way. My aim is to step back and ask more fundamental questions without taking those intuitions for granted.
Why is it “fair” to get the product of your work? Why is it “fair” for the value of your work to be determined by the market price? Why is a fair price the best one I can get absent coercion?
Binmore does not start from intuitive statements. He builds a more general framework that can help us justify them, or sometimes reject them. That is also why I bring in the utilitarianism versus egalitarianism debate. This is the main debate in political philosophy when it comes to justifying the kind of statements you make.
My next post will move more directly to fairness at the level of society, and there I will discuss how market mechanisms fit into the picture.
On egalitarianism, I should say that Rawlsian egalitarianism does take incentives into account. It allows inequalities when they improve the position of the least well-off.
And on your last paragraph, I actually agree with much of it. But I would say that the idea of the best voluntary arrangement among alternatives leads back to a bargaining logic that has an egalitarian solution when people have equal bargaining power.
I am sure you don’t have time to debate with every person commenting, but food for thought as you progress in this series (apologies for the length).
First, my definition isn’t ad hoc or intuitive. It is based upon evolutionary concepts that humans cooperate for mutual benefit, but to do so they must overcome the dilemma of cooperation — namely that it is best to minimize contributions (costs) and maximize share of the rewards (benefits). This dynamic completely undermines cooperation.
Humans solve this dilemma in part based upon reputation and choice. In a system (such as existed with hunter gatherers) where people could greatly choose who they cooperated with, then there is immense value in being seen as having a good reputation and thus being chosen as a partner. Good partners are those with talent, and those which offered terms proportionate to what they contribute. Good partners gain power in choice. Everyone wants to play with those that are talented and… wait for it….”fair.”
Fairness is an emergent term that applies to cooperative agreements, that accounts for contributions and costs relative to what other choices and alternatives exist. The fairest real deal I can get is the best terms (rewards minus my contribution) that I can get others to agree (knowing that others are watching me and judging me). In general, more choices, and less friction in switching and choosing, is better, but not always.
Binmore seems to me to conflate fairness with either utility or stability (an equilibrium outcome).
I am interested in hearing your argument on how voluntary arrangements lead to egalitarianism. This word is defined many ways, but if you mean to define it as equal rewards regardless of contributions, then I would say it is almost always incorrect. Equal rewards regardless of contributions is at best a special case where contributions are hard to measure or otherwise required with minimal incentives.
Hi Swamy, your take shares a lot of the conceptual viewpoint I adopt in this series. I would agree with what you say here: "Fairness is an emergent term that applies to cooperative agreements, that accounts for contributions and costs relative to what other choices and alternatives exist. The fairest real deal I can get is the best terms (rewards minus my contribution) that I can get others to agree to."
But I believe you draw a different conclusion because your focus is narrower on exchanges, while Binmore and I would consider all possible interactions. The outcome of Alice and Bob cooperating might depend on Candice not sabotaging their effort or stealing the fruit of their work.
It might hurt our intuition of fairness, but if we want to start from a stance that is not already taking a moral point of view and if we want to think of fairness as "The fairest real deal I can get is the best terms that I can get others to agree to," then this "others" would also include non-participants in the market exchange. It is just a matter of fact. If Candice is not willing to respect the terms of Alice and Bob's agreement, they might have to pay for a police force to protect their property, hence a potential loss.
Like Binmore and most economists, I am favourable to market mechanisms and think they are very useful for aggregating information and organising the allocation of resources. But the market is part of the Game of Life. For its outcomes to work, they need to be accepted by all. It is, in a sense, a trivial observation that is missing in libertarian takes.
Now, a libertarian (I am not saying you are necessarily one) would say, but it is unfair, Candice has no right to claim anything about what Alice and Bob do. But remember that, from Binmore's naturalistic perspective, there are no rights pre-existing the social contract. Hence, saying Candice's claim is unfair requires a skyhook: the invention of "natural rights" that predate social interactions and that would make Candice's refusal to accept the terms of Alice and Bob's cooperation unacceptable in principle. Note that I am not saying that Candice's claim is fair either, only that fairness is the product of a social contract and that only social contracts that are socially sustainable, that is, those that keep Candice on board, resist the test of time.
Thanks, for your response. No, I am not a libertarian, nor do I believe in fairness skyhooks or natural rights.
I am extremely intrigued by how Binmore and you are extending the concept of fairness to external parties which have little or nothing to do with the cooperative arrangement. I certainly wouldn’t ever use the word unfair to describe a third party using coercive interference. But I also am skeptical about extending the term fair to arrangements that are resistant to 3rd party interference. It feels again like we are way overextending what fair means — first by extending it to mean utility and now extending it to stability.
I am definitely waiting for the next installation!
This is great, but something keeps bugging me: preferences get treated as stable inputs here, and I don't think they are.
"I hate dishwashing" isn't just a fact Bob brings to the table — it's partly a claim he's making because he's at the table. The stronger he states it, the better his position. So the preference and the bargain aren't separate steps.
Stating the preference is already a move in the game.
Is the answer here something like tit-for-tat — that repeated interaction corrects for strategic preferences over time?