The Idea of Justice
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Since resources are ‘merely useful and for the sake of something else’
(as Aristotle put it), and since the case for equality of resources rests ultimately on that ‘something else’, why not put equality of resources in its place as a way of getting to equality of the capability to achieve
– if the congruence between the two does actually hold?
There is, of course, no great mathematical difficulty in thinking of one object that can be seen as an end (such as utility or capability) in terms of ‘equivalent’ amounts of something else (such as income or resource) that serves as a means to achieve the corresponding end, so long as the latter is instrumentally powerful enough to allow us to get
* For example, the actual pursuit of expensive modes of living by some, which Dworkin does not want to subsidize, should not be confused with the capability to indulge in expensive modes – a capacity that many people may share without actually using it.
† My 1979 Tanner Lecture on the use of capability, which was published as ‘Equality of What?’ in S. McMurrin (ed.), Tanner Lectures on Human Values, vol. I (Cambridge: Cambridge University Press, 1980), presented the capability perspective not merely as a contrast with the Rawlsian focus on primary goods but also as a rival to – and critique of – any welfare-based approach. Dworkin does not comment on it in his first paper on equality of resources: ‘What Is Equality?: Part 1: Equality of Welfare’, and
‘What Is Equality? Part 2: Equality of Resources’, Philosophy and Public Affairs, 10
(1981), and the attribution first occurs, as far as I can see (unless I have missed something), in Dworkin’s Sovereign Virtue: The Theory and Practice of Equality (Cambridge, MA: Harvard University Press, 2000).
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t h e i d e a o f j u s t i c e to any particular level of the former. This analytical technique has been much used in economic theory, dealing particularly with utility analysis, in thinking of utility not directly but in terms of equivalent incomes (often called ‘indirect utility’). Capability equality and Dworkinian resource equality, which can be seen in this sense as
‘indirect capability’, could be congruent if and only if insurance markets were to work in such a way that under Dworkin’s formula for equality of resources everyone would have much the same capability. But then why thrill merely at the instrumental achievement (‘all have the same resources – hurrah!’), rather than about what really matters (all have the same substantive freedom or capability)?
Third, the congruence may not actually hold, since insurance markets can deal more easily with some objects than with others.
Some of the sources of capability disadvantage arise not from personal features (like disability), but from relational and environmental features (like being relatively deprived, originally discussed by Adam Smith in the Wealth of Nations). It is easily checked why the market for insurance against such non-personal characteristics is much harder to accommodate in insurance markets with individual clients.*
Another reason for the possibility of non-congruence is that whereas the assessment of interpersonal differences in deprivation is the subject matter of public reasoning in my approach, that assessment is left to the atomistic operators in Dworkin’s insurance markets. In Dworkin’s system, it is the interplay of the different individuals’ respective assessments that determines the market prices and compensation levels of different types of insurance. The market in the Dworkin system is charged to do the valuation exercise which may actually demand engaging public reasoning and interactive discussion.
Fourth, Dworkin’s focus, in common with other transcendental institutionalist approaches, is on getting to perfectly just institutions (in one step). But in dealing with the task of advancing justice through the removal of radical cases of injustice, even when there is no hope of achieving perfectly just institutions (or even any agreement on
* Some of the reasons for the divergence of resource equality and capability equality have been analysed by, among others, Andrew William, ‘Dworkin on Capability’, Ethics, 113 (2002), and Roland Pierik and Ingrid Robeyns, ‘Resources versus Capabilities: Social Endowments in Egalitarian Theory’, Political Studies, 55 (2007).
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c a p a b i l i t i e s a n d r e s o u r c e s what they would be like), we can have much use for what has been dismissively called ‘merely a partial order ranking’. The as if market for insurance against disability in the Dworkinian form does not even claim to take us to ways and means of identifying advancements of justice, because of its exclusive concentration on the make-believe exercise of transcendental justice.
Fifth, Dworkin takes the existence, uniqueness and efficiency of perfectly competitive market equilibria, which he needs for his institutional story, to be entirely unproblematic. And this is all assumed, without much defence, despite what we know about the huge difficulties that exist in these presumptions, as shown by half a century of economic research on ‘general equilibrium’ theory. Indeed, many of the problematic features, related to informational limitations (especially asymmetric information), the role of public goods, economies of scale and other impediments apply particularly strongly to the markets for insurance.10
There is, I am afraid, some institutional fundamentalism in Dworkin’s approach, and some innocence in his presumption that once we have agreed on some rules for insurance-based resource redistribution, we would be able to forget about the actual outcomes and the actual capabilities that different people enjoy. It is assumed that the actual freedoms and outcomes can be left in the secure hands of institutional choice through as if markets, without ever having to second-guess the correspondence between what people expected and what actually happened. The insurance markets are supposed to work as one-shot affairs – with no surprises, no repeats and no discussions about what was hoped for and what actually emerged.
If there is usefulness in Dworkin’s ingenious device of imagined insurance markets, that use lies elsewhere than in its claim as a new and viable theory of distributional justice. Resource equality in Dworkin’s way is hardly a substitute for the capability approach, but it can serve as one way – one of several ways* – of understanding
* An important alternative to giving extra private income to the handicapped is, of course, the much-used practice of providing free or subsidized social services – a procedure that is central to the ‘welfare state’ of Europe. That is how, for example, a national health service runs, rather than giving ill people more income to pay for their medical needs.
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t h e i d e a o f j u s t i c e how compensation for handicaps can be thought of in terms of income transfers. In this difficult field, we can do with any help that thought-experiments can provide, so long as they do not pretend to have imperial powers as institution-based arbitrators.
As was discussed earlier (particularly in Chapter 3), advancement of justice and the removal of injustice demand joint engagement with institutional choice (dealing among other things with private incomes and public goods), behavioural adjustment and procedures for the correction of social arrangements based on public discussion of what is promised, how the institutions actually work out and how things can be improved. There is no leave to shut off interactive public reasoning, resting on the promised virtue of a once-and-for-all market-based institutional choice. The social role of institutions, including imaginary ones, is more complex than that.
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13
Happiness, Well-being
and Capabilities
Since economics is meant to be my profession, no matter what I make of my love affair with philosophy, I might as well begin by acknowledging that my profession has had something of a troubled relation with the perspective of happiness. It is frequently described, following Thomas Carlyle, as ‘the dismal science’. Economists are often seen as terrible kill-joys who want to drown the natural cheerfulness of human beings and their friendliness towards each other in some kind of a formulaic concoction of econo
mic discipline. Indeed, Edmund Clerihew Bentley placed the economic writings of that great utilitarian, John Stuart Mill, in that cheerless box of political economy
– with little joy and no friendliness:
John Stuart Mill,
By a mighty effort of will,
Overcame his natural bonhomie,
And wrote the ‘Principles of Political Economy’.
Is economics really so hostile to happiness and congeniality that bonhomie must be ruthlessly overcome before we are able to consider political economy?
Of course, it cannot be doubted that the subject matter of economics is often rather grave and sometimes quite depressing, and it may well be quite hard to retain one’s natural cheerfulness in studying, say, hunger or poverty, or in trying to understand the causes and effects of devastating unemployment or dreadful destitution. But that is as it should be: cheerfulness per se is not a major help in the analysis of, say, unemployment, poverty or famine.
But what about economics in general, which covers so many 269
t h e i d e a o f j u s t i c e different issues not all of which are terribly disturbing? Does it get anywhere in accommodating the perspective of happiness and in acknowledging its importance for human life and therefore for good economic policy? That is the first question I address in this chapter.
The second is, how adequate is the perspective of happiness in judging a person’s well-being or advantage? We could err either through not being fair to the importance of happiness, or through overestimating its importance in judging the well-being of people, or being blind to the limitations of making happiness the main – or only
– basis of assessment of social justice or social welfare. In addition to examining the connections between happiness and well-being, it is relevant to ask how happiness relates to the perspective of freedom and capability. Since I have been discussing the significance of capability, it is important to examine the extent of the divergence between the two perspectives of happiness and capability.
Third, how does capability link with the well-being of a person? Is an expansion of capability always a welfare-enhancing change? If not, in what sense is capability an indicator of a person’s ‘advantage’?
These questions will be examined presently, but before that I want to discuss the fact that the relevance of capability is not confined only to its role in telling us about the advantages of a person (it is in that role that capability may compete with happiness), since it also carries implications regarding a person’s duties and obligations, at least in one perspective. As was noted earlier, capability is also a kind of power, in a way that happiness clearly is not. How significant are the implications of this contrast for moral and political philosophy in general and for the theory of justice in particular?
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The question here relates to the responsibility of effective power, which was discussed earlier, in Chapter 9 (‘Plurality of Impartial Reasons’). Unlike the contractarian argument, the case for duty or obligation of effective power to make a difference does not arise, in that line of reasoning, from the mutuality of joint benefits through 270
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cooperation, or from the commitment made in some social contract.
It is based, rather, on the argument that if someone has the power to make a difference that he or she can see will reduce injustice in the world, then there is a strong and reasoned argument for doing just that (without having to dress all this up in terms of some imagined prudential advantage in a hypothetical exercise of cooperation). It is a line of reasoning that I traced to Gautama Buddha’s analysis of obligations that go with effectiveness of one’s ability and power (the cited argument is presented by Buddha in Sutta-Nipata), but it has emerged in different forms in moral and political philosophy in many different countries, in many different eras.
Freedom in general and agency freedom in particular are parts of an effective power that a person has, and it would be a mistake to see capability, linked with these ideas of freedom, only as a notion of human advantage: it is also a central concern in understanding our obligations. This consideration yields a major contrast between happiness and capability as basic informational ingredients in a theory of justice, since happiness does not generate obligations in the way that capability inescapably must do, if the argument on the responsibility of effective power is recognized. There is, in this respect, a significant difference between well-being and happiness, on one side, and freedom and capability, on the other.
Capability has a role in social ethics and political philosophy that goes well beyond its place as a rival to happiness and well-being as a guide to human advantage. I will not pursue this distinction further here – at least directly, even though it will figure in explaining why an enhancement of a person’s freedom may not necessarily increase his or her well-being. I will concentrate instead on the relevance of capability in the assessment of personal states and advantages, in contrast with the perspective of happiness emphasized in traditional welfare economics. The issue of obligation related to capability is an important part of the overall approach to justice presented in this work.
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t h e i d e a o f j u s t i c e e c o n o m i c s a n d h a p p i n e s s
The discipline of welfare economics, which is the part of economics that is concerned with the assessment of the goodness of states of affairs and the appraisal of policies, has had a long history in placing happiness at the very centre of the discipline of evaluation, seeing it as a sole guide to human well-being and to the advantages enjoyed by different people. Indeed, for a long time – for well over a century –
welfare economics was dominated by one particular approach, namely utilitarianism, initiated in its modern form by Jeremy Bentham, and championed by such economists as John Stuart Mill, Francis Edgeworth, Henry Sidgwick, Alfred Marshall and A. C. Pigou, among many other leaders of economic thought. It gave happiness the status of being uniquely important in assessing human well-being and advantage, and thus serving as the basis for social evaluation and the making of public policy. Utilitarianism was for a very long time something like ‘the official theory’ of welfare economics, though (as John Roemer has illuminatingly analysed) there are many compelling theories now.1
Indeed, even a substantial part of contemporary welfare economics is still largely utilitarian, at least in form. And yet the importance of happiness in human life has frequently been treated with some neglect in the dominant discourse of contemporary economic issues. There is considerable empirical evidence that even as people in many parts of the world have become richer, with much more income to spend in real terms than ever before, they have not felt particularly happier than before. Cogently reasoned and empirically backed doubts have been raised about the implicit premise of no-nonsense advocates of economic growth as an all-purpose remedy of all economic ailments, including misery and unhappiness, by asking the question, to quote from the title of a justly famous essay by Richard Easterlin, ‘Will raising the income of all raise the happiness of all?’2 The nature and causes of ‘joylessness’ in the lives of people in prosperous economies have also received attention from a number of economists who have been ready to step beyond the simple functional presumption that the utility level will always increase with income and wealth. Tibor 272
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Scitovsky’s analysis – part economic, part sociological – of ‘the joyless economy’ (to quote the title of his famous book) has been a landmark in this neglected area of research.3
There is little reason to doubt the importance of happiness in human life, and it is good that the tension between the income perspective and the happiness perspective is, at long last, receiving more mainstream attention. Even though I have had many occasions to argue with my long-stan
ding friend, Richard Layard (and will go into some of these arguments presently), I cannot over-emphasize the importance I attach to his extensive investigation of a paradox that motivates his engaging and combative book, Happiness: Lessons from a New Science: ‘There is a paradox at the heart of our lives. Most people want more income and strive for it. Yet as Western societies have got richer, their people have become no happier.’4 The questions that do arise come only after the importance of happiness for human life has been fully acknowledged, with its far-reaching implications for styles of living and with the consequent recognition of the fact that the relation between income and happiness is far more complex than income-oriented theorists have tended to presume.
Those questions concern the status of other ways of judging the goodness of human lives, and the importance of freedom in the way we live, and whether all these other concerns should be seen as unimportant, or subsidiary to utility, or perhaps seen only in terms of their role as determinants of – or instruments for – enhancing happiness.
The central issue is not the significance of happiness, but the alleged insignificance of everything else, on which many advocates of the happiness perspective seem to insist.
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It is hard to deny that happiness is extremely important and we have very good reason to try to advance people’s happiness, including our own. Richard Layard, in his forcefully argued and enjoyably spirited (I should say, happiness-creating) advocacy for the perspective of happiness, may have underestimated a little our ability to discuss 273
t h e i d e a o f j u s t i c e awkward questions, but it is easy to see what he means when he claims: ‘If we are asked why happiness matters, we can give no further, external reason. It just obviously does matter.’5 Certainly, happiness is a momentous achievement, the importance of which is apparent enough.