Friday, October 24, 2014

efficiency and fairness

New York Times reported a hypothetical case: when two men did equal work, how to let the one that had occupied more benefits share the benefits. The article points out “the same labor, the same salary” and I agree this idea. This indicates that the author also agrees with the basic principle of more pay for more work. But when such two men cooperate with each other and accordingly get more benefit than that when they work separately, things change and unequal distribution appears. This topic leads me to think more about efficiency and fairness. 
First of all, the benefits distributor in this experiment is a machine. Naturally, I will wonder how to distribute benefits in a team in real life. And firstly, I think of contracts. Contracts decide the proportion of the benefits each person gets in distribution. If so, on the premise of contracts, the rich should get more payment. This is because he took an upper hand when entering into the contracts. Maybe he commands more key resources (such as funds, technology, more favorable chances). This time, if the rich is willing to share more benefits with the fellow men or society, this will be a moral question --- contract allocation, I believe, is fundamental. Secondly, the government has exerted a considerable impact on redistribution, such as the universal health care by Obama in the last term, high welfare in Nordic countries and the heavy taxes for high-income earners. Someone would say such behaviors can be found only in experiments; how could redistribution exert a positive impact on economic growth? Besides, we also know that any measures against inequality taken by the governments will have a negative impact on the country's GDP. For example, don’t you think a generous aid to the poor will undermine their driving force for work? Don’t you think taxes for the rich will undermine their efforts to become wealthier? You are all right, but I believe that the driving force is not the only thing that matters. The resources are equally important. In a highly unequal society, many men are in short of resources. My uncle worked in China Post. Although they have government support but their performance is not as good as the private courier companies. This is exactly because private courier company offers an additional incentive policy for each delivery staff. Such distribution promotes efficiency but it loses equity. 

Before my high education, I received all of my education in China, where once a time there was absolute fairness. When I was a kid, in my textbooks, western capitalism was frequently criticized for intensifying social contradictions and enlarging the gap between the rich and poor. I deem that, in future society when there is great wealth, this problem may be solved. Maybe at that time, people will not satisfy their humane demands by materials. Only then can men have a equal status and income in its real sense. This society is somewhat similar to Switzerland nowadays. Therefore, I consider that it is better to pursue an equal chance than an equal benefit so that people may have better choices when concluding contracts. 

1 comment:

  1. I didn't understand your characterization of the experiment reported in the article, since it was done with three year old children, not adults. I think that matters for the story. Kids at such a young age haven't been been socialized into beliefs about fairness. The experiments were supposed to illustrate how humans react in the various instances, with those reactions based on our fundamental nature. And then, the desire to share the spoils comes only some of the time, when it is the perception that each has contributed to the total output.

    Let me take on your last paragraph. I don't believe the issue is to have a totally equal income distribution. Rather it is that hard work is rewarded an opportunity is there for people who do work hard. My parents came of age during the Great Depression and were poor then. But they did reasonably well for themselves later and I grew up in a comfortable middle class neighborhood, which, allowed me and my siblings not to go through the hardships that our parents experienced. The hope is that would be the pattern for most families, but it seems to be increasingly rare.

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