Can Justice as "fairness" reduce inequalities?

Let’s go with an “equal” scenario. Let’s say we gave everyone regardless of their status 1000. Each of these people come from the same background. We check back with them ten years later to see what they did with it. Some will buy 1000 worth of junk which broke down in a few years. Some will bury it in a tin can, and still have it ten years later. Nothing lost, but nothing gained either. Some will invest in risky ventures, and operate at a loss. Others will invest in blue chip stocks, and gain a modest dividend. Some will diversify, and become rich. Others will create jobs and wealth. Each started equally. But for each, the outcome was different.

Now, let’s factor in upbringing, wealth, education, attitudes, culture, opportunities, and religious beliefs. Our results become even more varied. Point? Even if everyone started equal, they wouldn’t end equal. You can give everybody the same opportunity, but the outcome is solely up to them. In this sense, there is nothing unjust about the inequality. Equality of opportunity puts the inequality in the hands of the people. Equality of outcome puts the inequality onto those who make correct choices (in other words, things are truly unequal for them), while those who don’t claim victimhood (even though it’s their fault they don’t have what they want).

In that way, the injustice is perpetrated on those who do the right thing. That is unjust. The only time it is unjust in extreme inequality is when one group goes out of their way to hold down those who reach upward. And in this day and age, it’s not always who we think it is. What do you mean by wealth? If you can pay your bills every month, you don’t have wealth. If you can have a tennis court put in your backyard and hire a tennis pro to give you lessons, you have wealth. The definition of wealth is that portion of your holdings you can afford to use for entirely discretionary purposes.

What do you mean by wealth inequality? Wealth is not only always unequal, the distribution of wealth across any population is eerily the same. Whether you are looking at rich Dubai or wrecked Zimbabwe, the curve follows the identical Pareto power-law distribution in which twenty percent of the inputs account for eighty percent of the outputs; that is, very close to twenty percent of the population owns very close to eighty percent of the wealth.

Capitalism doesn’t alter this fact. Socialism does not alter this fact. Tribalism does not alter this fact. Welfare programs do not alter this fact, and giving you some of your own tax payment back damn sure will not alter this fact. One factor is that the more overall wealth an economy has, the better off everyone will be. For instance, the lowest quintile in the US is both better off than the world mean and better off by a good bit than the US mean of 1970. Another factor is that the “who” of wealth is in constant flux. Many who become rich end up poor. Many who start poor end up rich. Furthermore, as things ordinarily go, you yourself will be earning much more in your forties than in your twenties.

What such returns of your own money to you represent is nothing more than an empty and false statement from the political class—”We care.” The Keynesian idea behind such gestures is that the economy will be stimulated. However, Keynes was right about amazingly few things. What an influx of money into consumer hands does is reduce the amount of price cutting that must go on to clear goods. In other words, more money does the same work. Retailers and manufacturers benefit in the long-run, but if you just incentivized manufacturers to new production, we’d all benefit in the shorter run.

So, it’s a hollow gesture that will affect little other than impulse sales of novelty items of the sort only purchased when some get what they consider a windfall. The real lesson is don’t vote for politicians who want to take so much of your money in the first place. That improves your chance to be wealthier. Imagine the Olympics. We are going to stage a race to determine who runs the fastest. Inequality will result. But we all recognise the justice of the outcome.

Now let's re-imagine the race. But this time, instead-of lining up all the competitors on the start line, move them forward or backwards based on the performance of their parents. If their parents were terrible athletes, move them back a little or tie their shoelaces together. If their parents were great runners, move them forwards. If they are Usain Bolt's kids, heck, let them use a motorcycle! Suddenly the outcome seems profoundly unfair. It's a parody of fairness that does not reflect ability. It lets the useless triumph over the able. It perverts the natural outcome. Inequality in the real world is like the latter race. It harms society by removing merit and replacing it with advantage.

Two factors which already do and will continue to lead to an explosive level of income inequality in the future. IQ level and super-couples. And to make matters worse, those two are then wedded to and compounded by each other. On the first one now. IQ is powerfully linked to career and socioeconomic success. This should come as no surprise as we move increasingly towards a knowledge-based economy. It doesn’t mean that all high-IQ people will make a lot of money but that the overwhelming majority of the wealthiest people will be those with a high IQ.

Think about it now. We moved first from an agriculture-based economy to an industrialized one to a knowledge -based one. At each step, there is an exponentially greater effect on productivity based on the power of one’s intellect. If you were intellectually brilliant as a peasant (like 90%+ of the population) anywhere in the Western world in the 15th century, it wouldn’t have counted for a great deal. What use are all of those brains in a time and place where most jobs and productivity consisted of sowing and reaping stuff.

Then fast forward that five centuries and that same comparative level of superior intellect will have a much greater competitive edge. Most chances are that fellows like like Jeff Bezos or Warren Buffett would’ve been picking crops were they born into a peasant household in 16th century America. Today they have leveraged that high intellect to make tens of billions. This is something which has already been said by folks like Sam Harris and Jordan Peterson. But then to make matters worse - There is very little which can be done to increase one’s IQ. No, no amount of training will change it beyond a small advance. It is largely hereditary. But now things get even worse in terms of the second factor.

Which is that society is breaking away into two groups. In the first one, rates of births out of wedlock are increasing (across all races in America), condemning those kids right from birth to a terribly major disadvantage in life. And then the second one are a tiny group like my younger sister and her husband. They both are highly intelligent, make half a million dollars in combined household income each year. They just had a kid. It is no exaggeration now to say that my tiny three month-old niece is one of the most privileged humans to have ever walked the face of the earth in terms of a natural lottery.

That is no tall statement because consider this. That little girl has now inherited three massive advantages in one blow right at her birth - Every level of privilege and opportunity which money can buy. A high IQ from her parents. Highly diligent parents who will pay close attention to her upbringing. Which is why I used the term “super-couples.” I know at least a couple of dozen such couples among my friends, family and friends. I attend their weddings and can’t help think how incredibly privileged their kids are going to be in terms of the formidable advantages they will inherit in comparison to their peers.

These scientists, bankers, engineers, corporate executives, doctors, professors, lawyers - all dating and marrying each other within that relatively tiny demographic group which is no more than 5% of the general population. All the time as they create a class of ‘nobility’ of sorts in terms of socioeconomic status - because that will keep on propagating itself. Their future generations will marry partners within that pool and so on. And can you blame them?

Cheers!