CLASSICAL BASIC RIGHTS AND FULL PROCESS-FREEDOM

“Men are free and equal in rights.” The rights in which men are so declared equal are the classical basic rights, or simply basic rights, or basic freedoms. They constitute the legal and social ethical basis of modern democratic societies (although the term “democracy” does not refer to their main part, the “rights of man,”but only to their political part, the “rights of the citizen”). They constitute the base, core, and fountainhead of their constitutions – they are commonly presented as their preamble. Hence, they constitute, in these societies, the most basic and general rule of the law, its prime source, and the most basic and general rule of the relations between persons and between them and institutions. This does not prevent a number of violations of these rights, strictly understood, by lawful rules in these societies. We will notably find examples of this fact in fiscal systems, and we will also see that these violations are not necessary for their very purposes – such as realizing a just redistribution. We will also see, moreover, that these violations also reveal an imperfect application of the political basic rights because they induce inefficiencies in Pareto's sense, hence a lack of respect for the principle of unanimity, whereas this principle is implied by the democratic participation required by these rights.

REALIZATION, IMPLEMENTATION, INFORMATION

The realization of the required distribution or policy depends on the information, motivation, and power of the appropriate agents. This chapter considers the question of the realization and implementation of ELIE schemes, and in particular that of information. The basic issues are presented in Sections 2 and 3 and the various aspects are more fully developed in Section 5, whereas Section 4 shows the problems of an alternative conception influential in economics. Section 2 notes the required information, the fact that ELIE can be achieved by purely interindividual rights, the various moral aspects of this distribution, the various ways in which people's motives associate self-interest and social and ethical views, and the consequences for implementation and information about individual capacities. Section 3 discusses the question of obtaining the required information, which concerns wage rates for given capacities, in observing labour markets, paysheets, and the characteristics of labour, as concerns, notably, the questions of education and training and the intensity of labour (effort). The conclusion is that this information is, on the whole, more easily obtained than that needed for other taxes or aids. The economic literature about “optimum income taxation” puts forward the issue of information, but raises a number of logical and conceptual problems that are noted in Section 4. Finally, an Appendix considers more in depth the issue of obtaining the information about the value of given capacities. It shows how the nature of ELIE favours individuals'participation in this respect.

ERASING SELF-INTEREST FROM JUDGMENTS ABOUT DISTRIBUTIONS: THE METHODS

The just, global distribution determined by endogenous social choice derives from individuals' conceptions of justice, and only from this part of their overall judgments. Hence, it should not be directly influenced by individuals' special relation to their own interest. Individuals' self-interested judgments should therefore be banned from the individuals' evaluations on which the global evaluation is based: the individuals'overall judgments used should be laundered for their self-interest, or individuals'non-self-interested evaluations should be singled out from their overall judgment for use in the global evaluation. Not uncommonly, individuals have a dual standard, one self-interested and the other moral and impartial, which they express in different occasions. However, individuals also often have an integrated view resting on both motives, and the relative importance they attach to them can be very varied. Individuals also have preferences favouring the situation of particular others for reasons irrelevant to impartial justice, notably the closeness of the social relation with them. This extends self-interest into self-centeredness. No practical effect results if this concerns family altruism because an individual's income is in fact her household's. Self-centeredness is more generally considered in Section 4.4, and in Chapter 21 where it will be the basis of one method of solution.

Erasing the self-interested motive in the individuals' evaluations can be done in various ways. One can analyze the structure of the overall preferences of each individual and try to discriminate among the effects of various motives for banning those of self-interest.

INTRODUCTION

ELIE results from a philosophy but ends up with a specific practical and simple distributive scheme. It can thus be compared not only with philosophies of social ethics and justice, but also with the specific distributive schemes that are applied or proposed. Chapter 14 noted these schemes, the relevant issues of the comparison, and the corresponding properties of ELIE. Taxation based on income has been considered in Chapter 11, and in Chapter 10 for the theory of the “welfarist optimum income taxation” because of its particular stand concerning information. The focus will now be on schemes of assistance, guaranteed minimum income, “negative income tax” or “income tax credit,” and “universal allocation” or “basic income,” along with ELIE. These schemes are first introduced in considering the rationales that led to them (Section 2). We then consider and compare the issues of financing, efficiency and incentives, freedom and dignity, information and realization, and comprehensiveness (Sections 3 to 7). The structural properties of the schemes will then be shown and compared (Section 8). Finally, the various relevant aspects of each scheme will be summarized (Section 9). ELIE will sometimes be considered for the case of unidimensional labour and proportional earnings (fixed wage rates), where it becomes EDIE(equal duration income equalization – see Chapters 8 and 9).

RATIONALES

ELIE, whose structure results from consensus and social and basic freedoms, manifests rights in society's resources (more specifically, its human resources). Its direct rationale is not the satisfaction of needs.

Introduction

This chapter outlines the solution of the problem of macrojustice implied by the premises presented in Part I, the essentials of this derivation, and the general properties of this result. Further chapters present this solution, its reason, and its properties with formal models which are increasingly refined, notably as concerns the description of labour and of its yielding product and income. This leads to the successive consideration of constant wage rates, more general individual productivities, explicit modeling of all the characteristics of labour, and total or partial involuntary unemployment. Another chapter discusses the question of information for the implementation of the distributive policy, and Part III compares the obtained scheme with present policies, proposals of assistance schemes, and philosophers' and economists' conceptions.

The present chapter can thus be said to present “the philosophy” of the question – as common language uses this term. It uses no explicit formalization. Readers particularly familiar with formal models may prefer to begin by reading Chapters 9 or 11 (and 13 for the treatment of involuntary unemployment). Chapter 11 presents the most general case, but Chapter 9, which considers labour measurable as a quantity and fixed wage rates, permits an easy discussion of the main issues – actual cases can often be presented in this way for reasons and with adjustments that will be presented in Chapter 8.

The present chapter divides in two parts.

THE GENERAL PROBLEM

Resources are to be distributed (acquiescing to particular “natural” or “spontaneous” allocations is to be seen as particular possible solutions). From the general principle or method of endogenous social choice, this distribution will have to follow unanimous informed and reflective opinions intervening directly or indirectly (reasons for respecting basic freedoms can also be directly valued). The distribution concerning macrojustice is considered here. Hence, as we have seen, it will have to respect basic rights and process-freedom, Pareto efficiency, and other applications of the principle of unanimity. These criteria will turn out to allocate a number of rights in resources to particular individuals and to discard others from the concern of macrojustice. In the end, there will remain the rent-rights in productive capacities, which will be allocated according to the appropriate equality.

This outcome will result from a selection in each of four dichotomies. (1) Resources can be produced or given (nonproduced or “natural”). (2)They can be nonhuman or human, that is, capacities. (3)Capacities can be (roughly) eudemonistic (and consumptive) or productive (usable in production). (4) Rights in a resource can be rights to use and benefit from the use, or rights to the value of its a priori availability or rent.

The reason for the selection will be process-freedom for dichotomies (1) and (4). It will be the fact that the topic is macrojustice for dichotomies (2) and (3), but for different specific reasons: the large relative importance of capacities and specificities of the allocation of nonhuman natural resources for choice (2), and the consensual irrelevance of eudemonistic (and properly consumptive) capacities for choice (3).

PRESENTATION AND BASIS

Presentation

This chapter derives the structure of global (overall) distributive justice in macrojustice implied by endogenous social choice, equal labour income equalization (ELIE), and shows its various properties and meanings, in the standard case (linear production functions, Section 1.2). In Section 2, the ELIE structure is derived from the duality of goods and measures (consumption-income and labour-leisure), process-freedom, and the required equality. Then, the various aspects or meanings of this result are pointed out, such as equal sharing of an equal share of the income value of productive capacities, partial equal pay for equal work, from each equally in labour (or according to her capacities) and to each equally, remuneration according to desert for one part and merit for the other part, general balanced labour reciprocity, or partial proportional compensation of productivity differentials. Section 3 focuses on the logic of ELIE. It considers the limiting cases of unemployment income of the less able, labour duty of the ablest, and highest incomes and labours. Section 4 displays the geometry of ELIE. It shows that freedom, and hence equal freedom, can be considered in two ways, directly as process-freedom or in the space of the result, and it characterizes ELIE in these two cases. The consequences of particular rights and rules, such as a workfare rule or a right to idleness, are pointed out in Section 5. Section 6 gathers the various meanings or meaningful properties of ELIE, and the meanings of the crucial coefficient k.

PRESENTATION

Chapter 22 focused on economic ethics that are, one way or the other, closely related to the obtained results as concerns macrojustice. Chapters 23 and 24 considered the general logical and necessary structure of economic ethical principles, and its various specific manifestations as concerns the structure and the “substance” of the families of criteria. This chapter and the next consider specific principles, respectively based on freedom and on preferences. Freedom is the basis of a variety of basic criteria. Among them, responsibility, desert, and merit relate judgment or allocation to the individual's action. Others consist of specifying the relevant meaning of equal freedom – the concepts of equality of opportunity are among them. Other principles propose that what should exist is what the individuals would have chosen in a putative free choice. When this notional choice is a collective free agreement, this is a theory of the social contract. This includes, in particular,“liberal social contracts” (see Chapter 3), and “fundamental insurance” against the occurrence of facts that are in reality given (theories of the “original position” are particular cases). Of course, rights, the scope of opportunities, responsibility, desert, merit, and social contracts have been the object of social-ethical analysis for centuries. They are forms of the most individualistic social ethics. Yet, the vastly unequal wealths that can result from equal social freedom in free markets led to claims of tangible equality or lower inequality, in the outcome.

THE ESSENCE OF THE QUESTION

An individual may face a situation of the labour market where she cannot work more than a certain level. If this level is zero, she is fully involuntarily unemployed. If not, and if she accepts this level and would like to work more, she is in partial involuntary unemployment. This partial unemployment can affect any of the productive characteristics of labour: duration, level of qualification, intensity, etc. This can also be manifested as a limit on the sales of the product of labour (no buyer, or other quantitative or qualitative limits).

The ELIE distribution distributes the value of individuals' earning capacities due to their productive capacities. The noted constraints affect these earnings capacities: if the labour proposed by the worker exceeds the constraint, the earnings are limited to those obtained by the accepted and actually performed labour, defined by the constraint (these labour and earnings may be zero). Hence, earnings as a function of actual labour are not defined for labours beyond the limit, and earnings as a function of proposed labour present this threshold at the earning level of the highest possible labour. This constraint limits the individual's earning capacities, and it is imposed on the individual. Therefore, it should be incorporated in an ELIE distribution. However, the individuals' production functions used in ELIE theory give each individual's earnings as a function of her labour for all labours, and they are nondecreasing functions of the productive characteristics of labour.

PRESENTATION AND OUTLINE

This chapter presents an analytical summarized overview of the properties of principles of adequate or fair distribution, that these principles hold by necessity created by their topic and by rationality. These principles constitute a rather well-defined set. Only a limited subset has been scholarly considered as yet – and not all fare brilliantly in the test of meaningfulness – while others doubtlessly as useful have not been yet. Logic and morality both entail that no principle can be valid for all questions; hence, each principle should be accompanied by the specification of its scope of application or by sufficient indications about it (as shown in forthcoming Section 2). For instance, ELIE was derived as a solution for overall distribution in macrojustice. A principle is characterized by two aspects, its substance and its structure (Section 4). The substance is the nature of the basic ethical reference of the judgment – this can differ from the direct object of the policy, from its instruments, and from the items whose distribution is observed or discussed. Individualistic principles are considered, and hence the substance is either in the family of freedom or means, or in that of happiness or satisfaction (Section 3) – the meanings and uses of the economic concepts of “utility” will be pointed out. Rationality in the basic and elementary sense of “for a reason,” or justified, turns out to imply two basic and related structural properties (Section 5).

GENERAL OUTLOOK

Impartialization to consensus

In questions of distribution, individual self-interests are opposed by definition, and this constitutes an intrinsic impediment to consensus. This holds both for individuals' own interests and for those of the people they particularly favour. Individuals' impartial views avoid this impediment, but this raises two problems.

First, individuals may just not have an impartial view. They may, for instance, have no opinion at all when their own interest (or that of the people they favour) is not at stake. One may then try to discuss with these people to make them aware of the issue and induce them to consider some impartial viewpoint (in addition to their self-interest or biased preferences). This, however, may fail or may not suffice. The solution to this problem will consist of theoretically deriving individuals' implicit hypothetical impartial views from their actual purely self-interested or self-centered evaluations. The methods of this derivation are presented, discussed, and applied.

However, the second problem then intervenes: impartiality does not entail consensus, because there are various different impartial moral judgments – contrary to an implicit or explicit belief common among scholars (for instance, an ELIE distribution with any level of coefficient k has a type of impartiality). Yet, impartializations of individuals'views make an important progress toward consensus, because they erase essential causes of disagreements: those due to oppositions among self-interests or self-centered preferences.

Among the solutions to the problem that impartiality does not suffice for consensus, one has a virtue of consistency.

PRESENTATION

This concluding chapter begins with a recapitulation of the general method, line of argument, and result. It then proposes practical strategies for introducing the obtained structure of distribution in actual distributive policies by more or less progressive transformations of present-day fiscal tools, possibly with unanimous, consensual approval at each step. The chapter then takes a look at the field of social improvement beyond macrojustice, in a chain of influences where one improvement paves the way for the next. Distributive justice is favourable to freely peaceful social relations and then to positive, other-regarding ones: the appropriate liberty and equality favour fraternity – which is hampered by the use of force and by envy, resentment, and sentiments that others benefit from what should be one's own. Sentiments favourable to other persons constitute a lowering of the importance of the ego, which can favour this lowering in the personal field, thus reducing acquisitiveness, greed, and unwarranted attachments and desires. This, by the way, will in turn reduce the effects and importance of imperfections in distributive justice. This may also free attention and energy for knowledge and appreciation of the cultural heritage of civilizations, and, possibly, for contributing to it. But these will be other stories.

Section 2 recapitulates the essential of the central derivation of macrojustice in society. Section 3 shows how the result can be implemented by progressive transformations of the present fiscal policies.

INTRODUCTION

The principle of ELIE compares with a number of well-known positions in social ethics and theories in political philosophy.

The life of modern societies for the last two centuries is shaped by the fight between two universalist distributive principles: self-ownership in process-freedom and the lowering of income inequalities. Now, both full self-ownership and the proper implementation of the standard philosophy of income egalitarians are particular ELIE schemes (see Chapter 11 for income equality). Indeed, ELIE turns out to be the simplest more general principle that encompasses these two opposing principles. Note that it has been derived from applications of the principle of unanimity and consensual opinions about global distributive justice. ELIE therefore constitutes both the common ground for the rational comparison of these two classical contenders, and the field of solutions intermediate between them (including these two cases). Most ELIE solutions will be intermediate between these two polar positions: ELIE is income equalization for the equalization labour and self-ownership for the rest.

The crucial parameter of ELIE is, indeed, the equalization labour. Its vanishing yields full self-ownership. When it is around lower standard working time, ELIE constitutes the possible first-best implementation of the most usual ideal of income egalitarians (see Chapter 11). We have noted that higher equalization labours, and notably the borderline maximal income equalization, are not to be retained (Chapter 7).