Abstract
How should income be distributed in a way that respects both the egalitarian ideal that inequalities due to differences in opportunities should be eliminated and the liberal ideal that people should be free to pursue their own idea of the good life without interference from society? We show that reasonable interpretations of the egalitarian and the liberal ideal characterize what we refer to as the generalized proportionality principle. This principle states that an individual should have the share of total income that he or she would have had if everyone had the same opportunities and these opportunities were given by the average of the pre-tax income functions of all individuals in society. We argue that a redistribution mechanism based on this principle would eliminate unfair inequalities and preserve fair inequalities, and discuss when the generalized proportionality principle is equivalent to the simple proportionality principle.
Similar content being viewed by others
Notes
See Fleurbaey and Maniquet (2011) for an excellent survey of alternative interpretations of liberal egalitarianism in the social choice literature.
We thus focus on cases where talent and effort are unidimensional, but it is straightforward to extend the main analysis to the multidimensional cases. Further, this formal framework also presupposes that we can clearly distinguish between talent and effort, which may not always be the case in practice where some factors affecting income (for example education) may be shaped by both talent and effort.
Our results do not depend on the set of possible effort and talent levels being the set of real numbers. All the results in the paper can be established as long as there is more than one element in \(\Omega ^{E},\Omega ^{T}\).
In this framework, all effort levels are available for all talent levels. One might argue that for some interpretations of effort, low talented people have a more restricted set of available effort levels than high talented people.
In an online appendix, we discuss the relationship between the conditions introduced in this section and alternative formulations of the egalitarian and the liberal ideal.
It follows straightforwardly that NEUDT implies NEUT.
References
Almås I, Cappelen AW, Lind JT, Sørensen EØ, Tungodden B (2011) Measuring unfair inequality. Theory and evidence from Norwegian data. J Public Econ 95:488–499
Arneson R (1989) Equality and equal opportunity for welfare. Philos Stud 56:159–194
Boadway R, Marchand M, Pestieau P, del Mar Racionero M (2002) Optimal redistribution with heterogeneous preferences for leisure. J Public Econ Theory 4:475–498
Bossert W (1995) Redistribution mechanisms based on individual characteristics. Math Soc Sci 29:1–17
Bossert W, Fleurbaey M (1996) Redistribution and compensation. Soc Choice Welf 13:343–355
Cappelen AW, Drange Hole A, Sørensen EØ, Tungodden B (2007) The pluralism of fairness ideals: an experimental approach. Am Econ Rev 97:818–827
Cappelen AW, Eichele K, Hughdahl K, Specht E, Sørensen Ø, Tungodden B (2014) Equity theory and fair inequality: a neuroeconomic study. Proc Natl Acad Sci 111:15368–15372
Cappelen AW, Konow J, Sørensen EØ, Tungodden B (2013) Just luck: an experimental study of risk taking and fairness. Am Econ Rev 103:1398–1413
Cappelen AW, Sørensen EØ, Tungodden B (2010) Responsibility for what? Fairness and individual responsibility. Eur Econ Rev 54:429–441
Cappelen AW, Tungodden B (2002) Responsibility and reward. Finanzarchiv 59:120–140
Cappelen AW, Tungodden B (2003) Reward and responsibility: how should we be affected when others change their effort. Politics Philos Econ 2:191–211
Cappelen AW, Tungodden B (2006) A liberal egalitarian paradox. Econ Philos 22:393–408
Cappelen AW, Tungodden B (2009) Rewarding effort. Econ Theory 39:427–441
Cohen GA (1989) On the currency of egalitarian justice. Ethics 99:906–944
Dworkin R (1981) What is equality? Part 2: equality of resources. Philos Public Aff 10:283–345
Fleurbaey M (1994) On fair compensation. Theory Decis 36:277–307
Fleurbaey M (1995a) Equal opportunity or equal social outcome? Econ Philos 11:25–55
Fleurbaey M (1995b) The requisites of equal opportunity. In: Barnett WA, Moulin H, Salles M, Schofield N (eds) Social Choice, welfare, and ethics. Cambridge University Press, Cambridge, pp 37–54
Fleurbaey M (1995c) Three solutions for the compensation problem. J Econ Theory 65:505–521
Fleurbaey M (1995d) Equality and responsibility. Eur Econ Rev 39:683–689
Fleurbaey M (2008) Fairness, responsibility and welfare. oxford University Press, Oxford
Fleurbaey M, Maniquet F (2011) Compensation and responsibility. In: Arrow KJ, Sen A, Suzumura K (eds) Handbook of social choice and welfare, vol II, pp 507–604
Frohlich NJ, Oppenheimer A Kurki (2004) Modeling other-regarding preferences and an experimental test. Public Choice 119:91–117
Iturbe-Ormaetxe I (1997) Redistribution and individual characteristics. Rev Econ Des 3:45–55
Konow J (1996) A positive theory of economic fairness. J Econ Behav Organ 31:13–35
Konow J (2000) Fair shares: accountability and cognitive dissonance in allocation decisions. Am Econ Rev 90:1072–1091
Konow J (2001) Fair and square: the four sides of distributive justice. J Econ Behav Organ 46:137–164
Le Grand J (1991) Equity and choice. HarperCollins, New York
Luttens RI (2010) Minimal rights based solidarity. Soc Choice Welf 34:47–64
Roemer J (1993) A pragmatic theory of responsibility for the egalitarian planner. Philos Public Aff 22:146–166
Roemer J (1996) Theories of distributive justice. harvard University Press, Harvard
Roemer J (1998) Equality of opportunity. Harvard University Press, Harvard
Sprumont Y (1997) Balanced egalitarian redistribution of income. Math Soc Sci 33:185–201
Tungodden B (2005) Responsibility and redistribution. Soc Choice Welf 24:33–44
Author information
Authors and Affiliations
Corresponding author
Additional information
We have received extremely useful comments and suggestions from Marc Fleurbaey, Juan D. Moreno-Ternero, and two anonymous referees. The project was financed by support from the Research Council of Norway, research grant 236995 and administered by The Choice Lab.
Electronic supplementary material
Below is the link to the electronic supplementary material.
Rights and permissions
About this article
Cite this article
Cappelen, A.W., Tungodden, B. Fairness and the proportionality principle. Soc Choice Welf 49, 709–719 (2017). https://doi.org/10.1007/s00355-016-1016-6
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00355-016-1016-6