Thursday, August 10, 2017

Forget fairness - I want you to have more; I want what you have; I want more

From Support for Redistribution is Shaped by Compassion, Envy and Self Interest not Fairness by Alex Tabarrok.
Hayek argued that support for redistribution was driven by emotions that had been optimally evolved for small, hunter-gatherer societies but that were now at tension with the rules necessary to create an extended social order such as under capitalism.

Support for Hayek’s hypothesis is given in a new paper by Sznycer et al. (et al. including Cosmides and Tooby). The authors use surveys to measure an individual’s disposition to compassion and envy. For example, for compassion there are 11 items such as “I suffer from others sorrows,” or (negative) “I tend to dislike soft-hearted people,” and for envy there are questions like “It is so frustrating to see some people succeed so easily”. In each case there is a scale from strongly disagree to strongly agree. The authors also ask whether the respondents think a tax on the wealthy would benefit them (measured on a 1 to 5 scale).

What makes these three items–compassion, envy and self-interest– interesting is that each of these can be understood as having evolved for functional reasons in the ancestral environment (see the paper for cites and arguments.)

In contrast, “fairness” is a much more abstract and difficult to define concept and because it is based on groups rather than on interpersonal relations it is not clear how it would have evolved in the ancestral environment. The authors measure the demand for distributional fairness by asking a variety of questions about hypothetical distributions and they use survey questions such as “the law of the land should apply to everyone in the same way” to measure support for procedural fairness.


A scary/sad finding:

Respondents were given two scenarios, a 10% tax on the rich that led to X dollars for the poor or a 50% tax on the rich that because it reduced incentives led to X/2 dollars for the poor. This experiment was run in America, India and the UK.
Fourteen percent to 18% of the…participants indicated a preference for the scenario featuring a higher tax rate for the rich even though it produced less money for the poor.

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