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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
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