Dworkin on Equality of Resources

Gina Schouten

  • Equality of Resources as a way of treating people as equals
    • A description, not a defense
    • Equality of privately-owned resources
  • The Auction
    • Immigrants accept the envy test
    • 2 problems with non-market distributions of resources on desert island (QUESTION 1)
      • Conversion of initial resources into something else
      • Bundles themselves favor some tastes over others
    • “Under equality of resources…people decide what sorts of lives to pursue against a background of information about the actual cost their choices impose on other people and hence on the total stock of resources that may fairly be used by them” (288).
    • Non arbitrary bundle-sets
    • People enter the auction on equal terms
  • The Project
    • Application of auction mechanism to establish equality of resources in actual communities?
    • Why the project is valuable:
      • Test of the coherence of equality of resources as a theory of justice
      • Provides a standard against which to compare actual institutions
      • Provides a tool for design of actual institutions
    • Interest here is theoretical; simplifying assumptions will be made and some difficulties ignored
  • Luck and Insurance
    • Post-auction, the envy test will fail among the immigrants if they are left to trade as they choose.
      • The initial principle “that equality of resources requires that people pay the true cost of the lives that they lead” licenses differences in income and wealth as a result of option luck. Not so with brute luck. (QUESTION 2)
        • Option luck determines the outcomes of deliberate and calculated gambles
        • Brute luck determines the outcomes of risks that were not deliberate gambles
    • Insurance as a link between option luck and brute luck.
      • Example: blindness insurance
      • If individuals can insure against bad brute luck, then differences caused by brute luck against which they chose not to insure become differences in option luck.
    • Hypothetical insurance market for handicaps
      • Determine average amount of insurance purchased under conditions of equal probability of incurring handicap
      • Compensate accordingly via taxation
    • Threshold problem (298)
    • Answer: We can generalize based on categories of handicaps (299).
    • Alternative solution (300): Consider powers as part of resources and compensate prior to auction
    • Answer: (QUESTION 3)
    • Why compensate for handicaps but not “accidents touching preferences and ambitions” (301)?
      • Distinguish between a person and her circumstances
      • Nonetheless, certain preferences (those against which people would purchase insurance) might be more appropriately treated as handicaps.
  • Labor and Wages
    • Adrian and Bruce: With equal-talent idealization and synoptic view of individuals’ resources, income and wealth disparities after initial auction still pass envy test.
      • Adrian’s tomato farm
      • Equality of resources would be violated if we were to redistribute Adrian’s resources at the end of every year.
      • Diachronically/synoptically applied envy test: no one should envy the bundle of occupation and resources at the disposal of anyone else over a lifetime
      • Envy test succeeds despite different amounts of resources at any particular time.
    • Adrian and Claude: Without equal-talent idealization, envy test fails after initial auction, even interpreted diachronically.
    • The starting gate theory: “an indefensible combination of very different theories of justice” (310).
    • Equality of resources vs. starting gate theory (309) with regard to equal-talent idealization
      • Starting gate theory: equal starting point, laissez-faire thereafter
      • Equality of resources: If justice demanded equal distribution at the time of acquisition, then justice demands it thereafter
      • This distinction enables the resource egalitarian to maintain that differences in income and wealth resulting from differences in effort put forth should not be compensated, while those resulting from different talents should. (Adrian’s preferred position over Bruce is okay; his preferred position over Claude is not.)
    • Distribution of resources at any particular moment should be both:
      • Ambition-sensitive: The distribution should reflect the cost or benefit to others of people’s choices (Adrian and Bruce).
      • Endowment-insensitive: The distribution should not be affected by differences in talents among people with the same ambitions (Adrian and Claude).
      • Problem with including immigrants’ labor as another resource to be auctioned: slavery of the talented; failure to pass envy test (311-312)
    • Redistribution via income taxation
      • Redistributes wealth accumulated as a result of undeserved talents
      • Leaves intact wealth accumulated as a result of (non-talent-related) choices on
      • A compromise of two demands of equality (313)
      • Problems:
        • Cannot identify portion of wealth traceable to different levels of talents
        • Cannot know what equal-talent idealization would look like.
      • Solution: compare differential talents to handicaps
  • Underemployment Insurance
    • We ask how much insurance someone would have bought and at what price, against the chance of lacking some particular talent, assuming equal chances of lacking that talent.
      • Lower limit of the average amount purchased fixes lower bounds of redistribution.
      • Problem: determining average insurance purchase without knowledge of talents
      • Solution: individuals only ignorant of marketability of talents
    • Problem: insurance market for talents looks more like a gamble than insurance (319)
      • If insurance protects against not having the highest income level, then chances of “winning” (qualifying for compensation) will be very high.
      • As a result, the premium will be extremely costly (319-320)
      • Those who purchase coverage have a very high chance of gaining very little
      • Those who turn out to have the highest earning power will be slaves to their talents
      • Insuring at that level would be a financially disadvantageous bet
    • Solution: The lower the earning level chosen as covered by the insurance policy, the better the chances that people will actually insure at that level (321)
      • As the earning level covered goes down, the probability that an individual will be able to earn at that level improves at a faster rate than that of the decline
      • Cost of “losing” will decline
    • No (less) slavery of the talented: Deborah and Ernest (323)
  • Tax as Premium
    • Model tax system on hypothetical insurance market against lack of talent
    • Objections
      • This will result in everyone being taxed at the same level
      • Determining people’s actual earning power will be extremely difficult
    • Responses
      • Tax at a progressive rate (QUESTION 4)
      • Use co-insurance to reduce the risk of “moral hazard” (325).
      • Burden of proof is assigned to policy holders
    • Objections to tax as premium plan:
      • It justifies too much redistribution.
        • Response: If the transfer payments were less, the insurance market would be insufficiently attentive to the requirement of endowment-insensitivity.
        • Average coverage level enables us to weigh the requirements of ambition-sensitivity and endowment-insensitivity as equally important (327-328).
      • The hypothetical insurance market justifies redistribution at a higher level than Dworkin thinks.
        • Response: Waiting on substantive argument supporting higher transfer payments
      • The hypothetical insurance market is the wrong approach: it is too ambition-sensitive and insufficiently endowment-insensitive. (Claude and movie star).
        • Response: Claude needs an argument to support his favored redistribution; any he could give will likely violate ambition-sensitivity.
        • Equality of resources may be sufficiently egalitarian depending on coverage
        • Equality of resources MUST attend to two different demands of equality
      • “Moral cost” to society as a result of substantial inequality in income and wealth
        • Moral cost may not exist under equality of resources (QUESTION 5)
  • Other Theories of Justice
    • Gift-giving? Children and inheritance? Changes in life plans? Bracketing political power?
    • Equality of Welfare
    • Utilitarianism/ wealth-maximization
    • Nozick’s (Lockean) Theory
    • Rawls’ Theory (QUESTION 6)