Is fairness the enemy of the possible?

Posted: 28 May 2012 in Uncategorized
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Is fairness the enemy of the possible in Europe?

James Surowiecki seems to think so, which is why he suggests that “voters and politicians on all sides need to stop asking themselves what’s fair and start asking themselves what’s possible.”

In one sense, Surowiecki is right: the ultimatum game, when at least one of the participants is guided by a sense of fairness, can lead to a situation in which a solution that would leave all players better off is refused.* He therefore suggests we forget about fairness and get on with finding the “least bad solution.” But that solution—say, more inflation in Germany and more austerity in Greece—doesn’t solve the problem.

Since we can’t step outside some historically and socially constituted notion of fairness (since, as I have argued before, fairness is an important part of the self-justification of capitalism), then in a capitalist democracy people get to vote for the parties and policies they consider most fair (or, if you prefer, least unfair) in any particular situation. And those choices need to be respected. Otherwise, democracy becomes a sham, replaced by technocrats imposing solutions that violate people’s notions of fairness.

The problem right now in Europe is that the possible has become the enemy of fairness.

*The basic idea is that one player is given a sum of money (say, $10) and told to share it with someone else. The distribution is made only if the second player agrees. According to the logic of neoclassical game theory, rational players will agree to a $9.99-$.01 split, since both players will be better off than they would otherwise be. But behavioral economists have discovered that many players will refuse such a split, in the name of fairness, and will often hold out for a distribution in the $4-6 range. What Surowiecki forgets is that behavioral economists have also discovered that students who have taken a course in neoclassical economics are much more likely to play a ruthless strategy (offering the $9.99-$.01 split) than students who have not.

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