MODELING LABOUR

Characteristics and capacities

Equal labour income equalization can be presented with more or less complex (and complete) or simple models of the economy. Simple models may provide good descriptions, or sufficient approximations, in a number of cases. They can also be useful for focusing the presentation and discussion on crucial properties, or for didactic or illustrative purposes. The crucial issues will be the description of labour, the structure of individuals' production function showing earnings as a function of labour, and the situation of the labour market (notably, the absence or presence of involuntary unemployment). The present chapter focuses on the question of the description of labour and of the structure of the production function. It thus constitutes a preliminary for the following chapters that use its conclusions. It contains no ethical consideration – and hence, can possibly be skipped at first reading. However, its considerations are necessary for justifying formulations of labour that are usual, or that are used in the following chapters. For instance, can one speak of a “quantity of labour” or an “amount of labour”? What does this mean? What does an expression such as “she works twice as much” mean? If labour is measured by its duration, these expressions can make sense. One can then easily introduce the consideration of the speed of labour, all the rest remaining the same (if that is possible).

IMPORTANCE AND METHOD

Place and general method

In the foregoing analysis, the distinction of issues and remarks about their relative importance, associated with principles of unanimity and impartiality (and hence, of the relevant equality), have led to the conclusion that global distribution should have a structure of equal labour income equalization (ELIE). Individuals should equally share their product of the same “equalization labour” k – obtained with their different given capacities. The corresponding distributive transfers should amount to the implementation of this principle. This equalization labour or coefficient k is rich in very important meanings: it turns out to be, for the considered society, a degree of redistribution (from full self-ownership); of income equalization; of solidarity for facing the unequal natural distribution of capacities; of community in rights to resources; of labour reciprocity (the redistribution amounts to each individual yielding to each other the product of the same labour, or to each owning this product of each other);of income compensation for lower productivity; and of decrease in disparities in individuals' total incomes. Coefficient k will also turn out to be the minimum guaranteed income for individuals not responsible for their low income, as a fraction of the average wage.

The determination of this coefficient k is shown in the present part of this study. This will complete the determination of the required global distribution, and hence also, in adding the other applications of basic rights, of macrojustice in society.

INTRODUCTION AND SUMMARY

Income distribution is one of the most considered issues in judgments about overall distributive justice. These judgments often complain about income inequality and approve of its reduction. Moreover, a main tool for overall distributive justice, the income tax, is based on actual incomes and its progressivity is commonly justified as a means of reduction of inequalities in disposable incomes. This describes an ideal of equal disposable individual incomes (hence, household incomes are adjusted for family size). This ideal happens to discard a relevance of eudemonistic capacities; this is another manifestation of this general view about macrojustice (see Chapter 6).

This ideal also discards a relevance of differences in individuals' earnings for the distribution of disposable incomes. However, earnings depend on both labour and productivity. Then, these income egalitarians state that individuals' disposable incomes should not differ because of differences in productive capacities. But when it comes to the possible effects of labour, the view of most present-day income egalitarians is that someone who works more than someone else (longer, harder, at more painful or dirtier jobs, etc.) deserves a compensation for this extra work. This compensation is an extra income that compensates the painfulness of this extra labour (including foregone leisure). It a priori refers to a concept of indifference for an individual (but this is not the interindividual comparison of individual satisfactions or of their variations, which are found irrelevant for macrojustice).

INTRODUCTION

The obtained result – namely, the distinction of macrojustice, social freedom, the ELIE distributive scheme and, in the next part, the degree of redistribution – is derived from endogenous social choice and unanimity, along with facts and basic rationality. This result is thus obtained deductively rather than comparatively. It does not see itself as some “preferred solution.” It derives from the observation of people's well-considered preferences, rather than from some moral preference of some exogenous “ethical observer” (except if she chooses to respectfully rely on people's own appropriate preferences). In particular, the ELIE distributive scheme so results from unanimity and the corresponding efficiency, and from social freedom and the classical basic rights which, at any rate, constitute the basis of modern constitutions and – one can say – modern social ethics. This constitutes its reason and justification. However, and as a consequence, it presents a number of specific (and remarkable) properties which have, in themselves, ethical meaningfulness or practical value. Yet, a number of other distributive schemes are applied or proposed by scholars or policy makers. Some are relevant for issues in microjustice or mesojustice, rather than in the field of macrojustice. However, others are applied or proposed definitely for the question of macrojustice or for occupying its field. It is probably interesting to compare these solutions and schemes to the obtained one, both for enlightening the logic of the question in providing comparisons, frame, and possibly alternatives, and for choosing actual policies.

Presentation

The rest of Part I of this study completes the reasons and presents the sequence of implications that lead to the structure of global or overall distribution analyzed in Part II. There will be two kinds of items: social freedom and resources.

Social freedom means that there is no relation of force among individuals, including when they act in groups or in institutions. This indeed amounts to each individual being free from any other individual's forceful interference. This freedom is thus defined by (or as) a type of social relation, rather than a priori by a domain of possible choice or action – hence the adjective “social.” Social freedom also means that all individuals agree about what is done, although an individual may have to buy others' acts or others' agreements to her acts, in exchange for something. The respect of others includes that of the intended consequences of their acts, and hence of rights obtained in previous free actions or exchanges. Social freedom is commonly considered under two forms: the classical “basic rights” or “basic freedoms” (which are the basis of “democratic” constitutions), and the theory of free exchanges and the resulting property (notably through markets) approved of by “process liberalism.” We will see that social freedom can notably be justified as unanimously desired, given the relevant desires and possible uses of this liberty (this chapter and, particularly, Chapter 4).

INTRODUCTIVE SUMMARY

Justice should probably be seen as a palliative to the insufficiency of the deeper human values that are the choice of one's desires and concern for others. Among the multifarious questions of justice raised in society, macrojustice is concerned with the basic rules of society and the global or overall distribution of goods and of the main resources these rules imply. The specific solution for macrojustice will be shown. This will be the solution that is desired by society, in the sense that all its members unanimously want it when they are sufficiently informed, reflective, and impartial (a property of any view about justice). This will turn out to both imply and be implied by the fact that the general rule of society is social freedom, that is, an absence of relation of force between society members: each individual is free from the forceful interference of others individually or in groups or institutions (except possibly for protecting or realizing others' such freedom). Social freedom is generally presented in the form of the classical basic rights – the basis of democratic Constitutions. Social freedom or, more directly, unanimity, will imply that the overall distribution of resources has a very simple and meaningful structure (“equal labour income equalization”). There will, however, remain to determine a degree of equalization or redistribution, about which the interests of some individuals are opposed. The methods for solving this problem again involve some consensus.

A central implication of the theory developed in Chapter 2 is that legislative majorities in the Bundestag will be strongly tempted to evade judicial decisions that touch on interests that are fundamental to the parties, and that this temptation is particularly strong whenever public support or transparency is low. The theory further implies that judges of the FCC anticipate this potential for evasion and adjust their behavior in two ways. First, they will be sensitive to the preferences of legislative majorities and employ methods to reduce the costs of their decisions. Second, when they choose to annul a statute, they will try to increase the transparency surrounding the decision to generate greater pressure for compliance.

In the previous chapter, we found considerable evidence for the various components of this argument. Legislators reported that the costs of a decision affect their response to a judicial decision, and judges discussed a number of strategies they employ to reduce the political costs of their rulings. In this chapter, I illustrate these interactions in greater detail through a case study of the interactions between the Bundesverfassungsgericht and Bundestag in a particular policy area: public financing of political parties. This case study is particularly valuable because it traces the dynamics of the often contentious relationship between the FCC and the Bundestag as they interact repeatedly over the same issue.

The principal argument of this book, laid out in Chapter 2, takes off from the observation that the decisions of a constitutional court like the Bundesverfassungsgericht are not self-enforcing. Implementation of judicial decisions often requires the cooperation of other actors who may not wish to comply with a specific ruling, most importantly – for our purposes – legislative majorities. As a result, the incentives that legislators face in deciding how to respond to a judicial ruling take on central significance. The greater the pressure to implement a court's rulings faithfully, the more influential and effective a court will be. One important mechanism that creates such pressure for elected officials like legislators is the potential for a public backlash if they are perceived to flaunt a judicial decision. As I argued in greater detail in Chapter 2, two factors are central to this mechanism:

1. The degree of public support a court enjoys and

2. The likelihood that a sufficiently large number of citizens will become aware/convinced that a judicial decision has not been complied with if evasion is attempted (transparency).

As I stated at the end of Chapter 2, the second condition (transparency) is conditioned by a range of factors that work to decrease or increase the likelihood that citizens will become aware of evasive attempts by a legislative majority. Thus, transparency is generally higher in cases that are salient and attract more public attention.

In the previous chapter, I provided systematic statistical support for a central implication of the theory presented in Chapter 2. This implication focuses on the fact that if the potential to lose public support for evasion represents a key enforcement mechanism for judicial decisions, the Bundesverfassungsgericht will be more aggressive in using its veto powers the more transparent its political environment is. The evidence was overwhelmingly consistent with this prediction. The court is considerably more likely to annul legislation when public awareness of a case is high, when the court enjoys outside political support for an annulment, and when the issue involved is noncomplex and easy to police. Although critical, this relationship between transparency and judicial deference constitutes only on aspect of the theoretical argument. In this chapter, we explore other implications of the theory. Before I outline these implications, a few remarks about the approach taken in this chapter are useful.

Methodologically, we change tracks in this chapter. Instead of analyzing data statistically, we will consider qualitative evidence – specifically, interviews with judges of the FCC and members of the Bundestag. What makes such qualitative evidence particularly relevant? Rational choice theories (like the one presented here) posit that actors are conscious decision makers who act in ways that they believe will maximize their welfare as they perceive it. In other words, the subjective perceptions of the actors whose behavior is being explained constitute a crucial ingredient in rational choice approaches.

In much of the Western world, the institution of constitutional review has become a central component of constitutional democracy. In the previous chapter, I argued that how and under what circumstances courts are able to exercise influence over the policymaking process poses a puzzle. While many courts have successfully established a claim to the power of constitutional review, most have few means at their disposal to force compliance with their decisions. President Andrew Jackson's apocryphal reaction to the U.S. Supreme Court's decision (written by Chief Justice John Marshall) in Worcester v. Georgia (31 U.S. 515), invalidating attempts by the State of Georgia to assert jurisdiction over the Cherokee Indians provides a poignant illustration: “John Marshall has made his decision, now let him enforce it” (see Smith 1996:518). This lack of formal enforcement powers is potentially significant because implementation of a judicial decision often requires or induces a response by other policymakers. As the examples presented in the previous chapter suggest, governing majorities may be tempted to exploit the opportunity to evade, or at least limit, the impact of unwelcome judicial decisions. How then do courts constrain other political institutions?

Scholars have investigated various bases of judicial authority, including the value that political parties that alternate between government and opposition may place on judicial independence (Landes and Posner 1975; Ramseyer 1994), the fact that courts can help parties to solve Prisoner's Dilemma–type problems (Carrubba 2003), and the informational gain that legislative majorities may achieve from judicial review (Rogers 2001).

Constitutional review – defined as the power of judicial bodies to set aside ordinary legislative or administrative acts if judges conclude that they conflict with the constitution – has emerged as an almost universal feature of Western-style democracy. The commitment to this institution has become so pervasive that it is now virtually unthinkable to draft a democratic constitution without providing for its inclusion. Whether in postfascist Spain, postapartheid South Africa, or postcommunist Eastern Europe, recent transitions to democracy have been transitions to constitutional democracy, including judicial oversight of the political process. As Mauro Cappelletti has observed, in much of the Western world, constitutional review has come to be understood as “the necessary ‘crowning’ of the rule of law” (1989:205).

The experiences of totalitarianism provided a natural impetus for this development. In writing his monumental survey of American democracy in the 1830s, Alexis de Tocqueville praised the role of the judiciary in the new political system, arguing that “the power granted to American courts to pronounce on the constitutionality of laws is yet one of the most powerful barriers ever erected against the tyranny of political assemblies” (1835/1988:103f.). Similarly, constitution writers following World War II, and again in the wake of the peaceful revolutions of 1989 in Eastern Europe, turned to courts armed with the power of constitutional review in the hope of creating effective limitations on the power of legislative majorities.

In the remainder of the book, I explore and test the empirical implications of the theory laid out in the previous chapter by applying the framework to the FCC. In the roughly fifty years since its creation, this court has emerged as “the most active and powerful constitutional court in Europe” (Kommers 1994:470), and it has served as a model for many of the new constitutional courts of Eastern Europe (Schwartz 2000). Aside from the intrinsic importance of this court as one of the most significant legal actors in the world today, the FCC therefore provides an appropriate testing ground for the argument. Before we dive into the details of the politics of constitutional review in Germany, it is useful to briefly survey the Bundesverfassungsgericht and its history. How was this court established? How is it organized, and what are its powers? And how does it compare to other European constitutional courts? This chapter provides answers to these (and other) questions. Readers who are already familiar with the structure, jurisdiction, and powers of the FCC can skip without much loss to the next chapter.

I begin with a short account of the history and establishment of the court. One of the implications of the argument in the previous two chapters is that establishing a court, maintaining its institutional integrity, and generating compliance with its decisions constitute separate (though interrelated) problems.