Lectures

Jonny Heywood, and Joshua Loo

№1, Volume V

An account, written such that ‘\(x\)’ should be read as ‘the person delivering the lecture said \(x\)’, is shown; commentary is in bold.

Is inequality fair?

Joshua Loo, and Jonny Heywood

Dr Brooks is the Chairman of the Board of the Ayn Rand Institute

The conventional view of inequality is that it is bad. It causes problems—it reduces economic growth, and can even cause terrorism. The broad thesis of this talk is that the claim is not true. Social mobility may be insufficient, but that is primarily the product of government distortions, such as corruption, which enrich those who do not deserve to be.

How do people acquire money? They must have a good idea which appeals to the market, and sell products based on this idea. Most wealth is acquired through this process—this appeal to the market—consider, for example, on the Forbes 400, a list of the wealthiest people in the United States.

Why do people purchase products? We are rational creatures. It is insulting to suggest that we are not, or that we do not operate by our free will. Some purchases are caused by status, but most are caused because both parties materially benefit. If one party will not benefit, the exchange does not occur.

There is more to life than money. Ergo, it is not clear why inequality in the distribution of money is unfair.

Fairness is based on desert. It is only natural that there should be inequality, because we differ in intelligence, physic fitness, and several other dimensions which impact our earning potential and other equivalents in other outcomes. It is a metaphysic fact that we differ.

Desire for equality of outcome is prompted in large part by thinking which broadly parallels that used in a pie analogy: there exists a pie, and the question is how to divide it. This relies on three falsities. First, there exists a fixed pie, whose size cannot change. Second and relatedly, the pie does not change size as a result of what we do—government policy, consumer confidence, and so on. Third, there exists one pie, instead of many separate pies, which each legitimately belong to one person or another.

First, it is not clear that the example is sufficient to rebut claims of inequality. It is possible that inequality could be problematic even were the richest to have found their positions by hard work. If most wealth were possessed by the upper middle class, who maintain their families’ positions by availing themselves of various services inaccessible to those who earn and possess less, many claims about inequality—that most wealth comes from inherited privilege instead of hard work, and that consequently redistribution is entirely legitimate—would remain true.

Second, it is not even clear that those on the Forbes 400 earnt their positions by hard work. Genetic advantages, to the extent that they exist, are not conferred by hard work. Parenting is not earnt by hard work. Perhaps the hard work of parents confers a right to convey rewards to children, but this right may also decay.

All economics is microeconomics in a normative sense, that is, although we can lump together individual inter-pie transasctions, each pie is rightfully individual, and only should normatively be treated as a larger pie if this is consented to.

Why? Suppose the following situation: there exists a person with a pie sufficient to feed ten people, and one who, due to a lack of pie, will starve. Brooks would have us say that the pie is property, and so may not be seized. The philosophic and political mainstream would have us take the pie. Brooks does not provide a reason why we should choose one alternative over another. Given that most moral philosophy relies on intuitions, we should presumably choose the second; Brooks, however, was there, and so ought to have given us a reason, since he was here to promote this idea.

Consider postcolonial Vietnam, where egalitarianism failed. The first inequality noted was the rural-urban divide; consequently, the cities were emptied. The second inequality noted was in foraging ability; consequently, this too was banned. Educational inequality was rectified by the shooting of all those who had education, as implied by literacy, or spectacles. All this was in the name of equality.

Western intellectuals continued afterwards to suggest that this equality was a noble goal, even if the means used to achieve it were suboptimal (and/or even worse than non-achievement of this goal).

That evil means have been used in an attempt to achieve one end or another does not imply that the end is not a good one. The evil of the Stalinist régime should not be used to vilify industrialisation, the evil of British colonial rule should not be used to vilify the common law, and so on. Unless there is some necessary connexion between a particular set of means and an end, the end cannot rightly be vilified by evaluation of means, even if they should be as abhorrent and aberrant as those used in Cambodia.

Our very humanity requires difference, that is, without it, we cease to be human, because our human essence requires that which makes us different (e.g., a desire to write literature, or be educated).

There are several unanswered questions here. First, why is it that ‘humanity’ is important? That is, it may be viewed as ‘human’ to have two arms, but we do not consider this to be of particular importance. Presumably, the answer involves a particular conception of ‘humanity’, in a moral or qualitative, as opposed to biologic or anatomic, sense; this therefore raises a second question—why is it that our difference is necessary for this humanity? (We shall not attempt to answer this question because there are several answers to the first question and its answer.)

All that should be supported is political equality—equality before the law, and before the courts. We should all be equally permitted by the state with as much freedom as possible to find our unequal outcomes.

I asked Dr. Brooks why he believes in absolute property rights. There are not so much absolute property rights as rights to be free from coercion, which necessitate absolute property rights. The connexion between the two is not necessarily true. Modern salaries are paid into bank accounts; they are essentially numbers, which can be modified by the state such that a reduction or increase is achieved. Consider a rich aristocrat who owns five houses. It is possible to seize one house without harming the aristocrat or violating the aristocrat’s right to be free from coercion. To the extent that there is coercion, this is the same coercion which also prevents my going into any house I should like to enter, which, presumably, Dr. Brooks supports.

The principal problem with this lecture was its lack of rigour. That the conclusion (that inequality is a necessary consequence of fairness) likely follows from the premises was demonstrated moderately well. Yet each of the premises—that wealth largely is acquired through hard work, that our differences are innate, that there exist absolute property rights, and so on—is sufficiently difficult to demonstrate that even had Brooks focused solely upon one of them for the entirety of the lecture he would not necessarily have made much progress.

University fees

Joshua Loo

Regrettably, the page of notes which included information such as the name of the speaker, and the precise topic of the lecture, has been lost. The lecture was about university fees. An account follows.

‘Free’ means paid by taxation in general; nothing is ‘free’, as in ‘free beer.’¹ The alternative is that the direct beneficiaries of the education provided should pay. The broad thesis of the lecture was that, so long as our education continues to be as stratified as it is, with a Russell Group or similar, and several tiers of university within that, this is superior to funding by general taxation.

Funding from general taxation is inegalitarian. Half do not go to university. Their absence is often due to bad luck—their parents may not have focused on their education as children, they may suffer from an inherited genetic disease which decreases the likelihood that they succeed in their universitary applications, and so on. There is a 23% boost for men and 53% for women after going to university, even when adjusted based on A-levels in an attempt to compare broadly similar sorts of people.

Leftism seems to correlate with this inegalitarian policy. Under New Labour, fees were set at £1000, then £3000. The Tories set them at £9000; Miliband proposed £6000, and Corbyn proposes none.

Dworkin provides an interesting thought experiment, broadly along the lines of the veil of ignorance.

Consider Miliband’s proposal, that fees should be reduced to £6000. Those who know that they will earn well after university will attend anyway, so it does not help them. It is better that high earners pay something, and those who earn less have something of a rebate.

This is the current system. United Kingdom and European Union citizens pay £9,250 and maintenance. This is, in turn, paid in the form of a loan. 9% of all income over £25000 is used to repay the loan. After 30 years, whatever debt remains is written off—normally a third of all debt is written off in this way. Hence the £3000 is better spent, in that it helps the poorest off.

Some worry about barriers to entry. This subsidy minimises entry worries. It is hard to know the counterfactual, but during a time of rising fees, (presumably because the poorest off know about how student loans work) the participation of those in the lowest quintile sorted by parental income rose.

The egalitarian case for tax requires more of a focus on basic aspects of education. There are more, for example, apartment shares, and commuting students. All universities must be equal, with few or no élite universities. See, for example, Swiss constitutional equality between technical and academic schools.

When asked about the standard response, it appeared that there was none; those to whom this argument was delivered who supported the funding of universitary fees by general taxation appeared to agree that there is a problem with this.