EM

213.32

4

Winter 2013

Read for Friday

ChapterCases

•Eminent Domain

•Battling Over Bottled Water

Articles•Isbister: Income distribution

•Maxwell: The Mission of BusinessHave read this earlier.

ch 3 text

Your thoughts?

http://www.census.gov/hhes/www/income/data/historical/inequality/IE-1.pdf

$9,132 $11,034

Income Distribution

0

1990 2000

Income Distribution

5

10

In 1990 top 10%- earned 7.5 times more

than bottom 10%

Canada

In 2000 - earned 8.7 times more

Income Distribution

0

1990 2000

5

10

Canada

US

Income Distribution

5

10

1990 2000

US

Canada

0

1970 1980

US

Canada

0

0.2

0.4

1978 1885 1995 2000

UK

Germany

Sweden

Income Distribution

“Gini index”

Income Distribution

incomewealth

Isbister

Income Distribution

? inequality promotes efficiency Is any compromise away from equality

justified? Is any constraint on efficiency justified?

Income Distribution

? inequality promotes efficiency• get an education• work hard• hierarchy

2 x 2 x 2

efficiency ? = ? wealth production

Income Distribution

? efficiency = wealth production

$0

$25,000

$50,000

$75,000

$100,0000 25 50 75 100

Income Distribution & Justice

Ask yourselves Is this fair?

• Is freedom a sub-value of justice/fairness?

Why? How did it get this way? Should we change it?

• How?

Would any of your answers be different if you weren’t a Christian?

ch 3 cases

Bottled Water whose water is it?

“There’s no difference between Perrier bottling water, Gerber making baby food, or Miller brewing beer.”

The Nature of Justice

fairness equality deserts rights

The Nature of Justice

distributive justice proper distribution of social

• benefits

• burdens

The Nature of Justice

some distributive justice options to each

• an equal share

• according to individual need personal effort social contribution

• as a free market allows

• as fortune determines

Distributive Justice

3 secular ideas Utilitarian

• whatever will maximize happiness

Libertarian• whatever will maximize freedom

Rawlsian• whatever reasonable people would agree to

Distributive Justice

Utilitarian• whatever will maximize happiness

ownership workplace authority government role incentives safety nets

Mill

Distributive Justice

Utilitarian greater equality of income

• declining marginal utility of wealth

• inheritance

Distributive Justice

Libertarian liberty = non-interference

Nozick

Distributive Justice

Libertarian premise of rights

• negative

• natural

• “Lockean”

• entitlement “theory” property goods money

Distributive Justice

how is the market “just”? Utilitarian Libertarian

Rawls

“the original position”

“the veil of ignorance” familiar & fundamental liberties inequalities justified if benefit worst off

• conservative

• non-utilitiarian maximum position

» minimize maximum regret

Rawls

1. all have equal basic rights• maximize what all could have• “primary social goods”

» income» wealth» rights» liberties» opportunities» status» self-respect

Rawls

1. all have equal basic rights• maximize what all could have• “primary social goods”

2. inequalities OK if• attached to positions open to all• benefit the least advantaged

Rawls

Can this apply in marketplace discussions?