Fairness

9 Key excerpts on "Fairness"

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  Behavioural Economics and Business Ethics

  Interrelations and Applications

  • Philip Alexander Rajko(Author)
  • 2013(Publication Date)
  • Routledge

    (Publisher)

  5   Fairness in economic ethics Fairness is the right dealing between persons, who are cooperating or competing against one another, as when one speaks of fair games, fair competition and fair bargains. (John Rawls)

  Fairness is a central concept to any social interaction and especially so for economic interactions. Thus Fairness must also be discussed with regard to economic ethics. Following the approach of this book, it is assessed with reference to behavioural economics. Therewith it benefits from the vivid research conducted on Fairness by economists in the last decade. This chapter is structured along the distinction between outcomes and intentions, which gives us distributive and procedural Fairness as the two main themes. First some main insights from the political philosophy literature on distributive justice are stated in Section 5.1. Then distributive Fairness such as most importantly inequality aversion is covered in 5.2. Procedural Fairness usually based on reciprocity is then taken up in 5.3. Finally in 5.4 the main implications of Fairness research for order ethics are pointed out.

  5.1 Distributive justice and social contract basing normative Fairness

  To take up the discussion, the basic principles of distributive justice as discussed in political philosophy are outlined. These are usually equality, need, merit and efficiency. As a contemporary approach a particular focus lies on Rawls’s theory of justice based on the idea of social contracts.

  5.1.1 Basic principles of distributive justice

  Questions of distributive justice are at least as old as philosophy. They have been discussed by the ancient Greeks and remain a highly contentious topic in our times. Within contemporary philosophy the issue of distributive justice exceeds the boundaries of ethical theory. It is rather an extensive matter of practical philosophy combining insights from ethics and political philosophy. However, in the literature there is a strong consensus on the four main principles of distributive justice being equity, need, merit and efficiency.1

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  Reclaiming Populism

  How Economic Fairness Can Win Back Disenchanted Voters

  • Eric Protzer, Paul Summerville(Authors)
  • 2021(Publication Date)
  • Polity

    (Publisher)

  This chapter will first briefly review leading philosophical theories of economic justice. It will then present an alternative theory of economic Fairness that citizens across the developed world largely subscribe to in practice. It will show that this standard has been promoted through biological and cultural evolution, and is now highly valued by citizens of contemporary liberal democracies. Finally, it will explore a key implication of the dynamic, evolutionary nature of Fairness: it is a moving target, and must be effectively managed as society evolves to avoid disaster. Armed with this understanding, subsequent chapters will be positioned to empirically connect economic unFairness to populism and analyze how policymakers can best rectify this problem.

  Distributive Justice and Economic Fairness

  A variety of contemporary philosophical theories, which fall under the umbrella of “distributive justice,” try to explain how economic opportunities and outcomes should be best distributed. While the scope of this book permits only a very short overview of the main ideas in distributive justice, such a review is essential to understand the contemporary debate and assess the idea of economic Fairness.

  It is worth noting that economists often claim to be agnostic about distributive justice. Milton Friedman, one of the most influential modern economists, argued in a 1953 paper that economics should be purely “positive” and not “normative.” That is, economists ought to work out the functional rules of the economy, much like a physicist might ascertain the laws of nature that govern electricity or thermodynamics. But he contended that economists should ignore moral questions of what should be done with the economy, and instead leave the matter to policymakers.

  Despite the immense impact of Friedman’s argument, in practice economics is largely framed by two schools of philosophical thought: utilitarianism and radical equality. The utilitarian view holds that society ought to be organized to maximize the net pleasure, happiness, and fulfillment of its citizens. In economics, utilitarianism assumes some “utility function” describing how a consumer’s happiness – or, in the language of economists, “utility” – depends on certain material inputs, subject to certain constraints. The economist then solves a system of equations to determine how to maximize society’s utility. A consequence of this approach is that economists often focus on growing a society’s “economic pie” (often expressed as its Gross Domestic Product – GDP), in order to maximize aggregate welfare.

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  Rethinking the Income Gap

  The Second Middle Class Revolution

  • Paul Ryscavage(Author)
  • 2017(Publication Date)
  • Routledge

    (Publisher)

  The present day challenge began subliminally at a time of major social, economic, and demographic changes in the 1960s, and it has had a profound impact on the national psyche. Like a sticky syrup that seeped into so much of the nation’s social fabric, this challenge continues to be in evidence today in various organizations and political groups. But, in many ways, this challenge has helped us rethink the economic events that have cascaded down upon us as we moved deeper into the new millennium. The Three Pillars of Economic Fairness The conceptual underpinnings of economic Fairness, as it is understood today in the United States, rest upon three pillars: exchange, self-interest and competition, and the Golden Rule. To place the present challenge to economic Fairness in perspective, it is instructive to examine these basic building blocks of economic Fairness in our nation. At the heart of economic Fairness, of course, lies the process of ex-change. By definition, at least two individuals or parties are involved and the subject of the exchange (e.g., labor, commodities, services, money). When an exchange is consummated there is the presumption that what has been exchanged are of equal values, that is, one hour of labor is worth a $10 wage, a newly purchased car is worth the $20,000 on the price tag, and a haircut is worth the $16 barber’s fee. In other words, a symmetry of values has been reached in the exchange. Each party involved in the exchange, of course, considers themselves to have benefited. The employer bought an hour’s worth of labor to do some task in his business and the employee received $10 to do with what he or she wishes. Both would not have entered the exchange unless each saw some benefit from it, or in other words, the exchange was in their self-interest. The value of the good or service involved in the exchange, however, is determined by its scarcity and desirability, or supply and demand

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  Is the Environment a Luxury?

  An Inquiry into the relationship between environment and income

  • Silvia Tiezzi, Chiara Martini(Authors)
  • 2014(Publication Date)
  • Routledge

    (Publisher)

  distributive preferences, justice also differs from altruism, which in economics typically characterizes an unconditional preference, such as pure altruism or warm glow (see Andreoni 1990). Instead, justice takes a more specific form and might involve some general relationship between preferred outcomes and other factors such as desert, endowments, productivity, need or effort. As behavioral economics has developed over almost three decades, Fairness concerns have figured prominently throughout, for example, Fairness has frequently been suspected in the results of experimental bargaining games beginning with Güth et al. (1982). But it is only relatively recently that Fairness has been analyzed as a possible force in environmental economics, e.g., Brekke and Johansson- Stenman (2008), Lange and Vogt (2003). Numerous experimental and field studies indicate that such preferences have frequent and quantitatively large impacts on economic behavior. Nevertheless, despite certain patterns, including the frequent incidence of equal splits in bargaining experiments, the findings defy explanation according to a single rule or principle. In this paper, we examine four rules that we believe characterize actualized distributive preferences: accountability, efficiency, need and equality.

  3.1 The accountability principle

  The first rule we discuss is a relative concept of Fairness, i.e., it pertains to the allocation of a benefit or burden of a given size among a set of persons. The accountability principle states that a person’s allocation should be in proportion to the relevant variables he/she controls, but this rule does not hold the person accountable for other differences (Konow 1996). For example, if worker A is twice as productive as worker B, A should earn twice as much as B, if the productivity difference is due to A working more hours or exerting greater effort. But they should earn the same, if the productivity difference is due entirely to factors they do not control, such as innate ability or differing work conditions. Thus, accountability integrates two concepts: proportionality and responsibility.

  Justice as proportionality is often referred to as equity theory

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  The Economic Psychology of Incentives

  New Design Principles for Executive Pay

  • A. Pepper(Author)
  • 2015(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  20

  Varian and later Baumol make social comparison the basis of an economic theory of Fairness.21 Fehr and Schmidt propose a model which, while making no reference to Varian or Baumol, nevertheless largely follows the structure of their definitions.22 Isaac et al. advance what they call a “positive theory of economic Fairness”, which they use to derive political and legal principles.23 Other economists propose economic theories of Fairness which are essentially variations on Fehr and Schmidt, but which allow for, inter alia, differential wealth effects and concave utility functions.24

  In order to provide the analytical framework for this chapter I make a number of observations at this point. First, the approach I have chosen to take in this study is exploratory, looking for patterns in the data and seeking explanations for those patterns in existing theory, before integrating the findings and theory to construct new propositions.25 I favour Lindenberg’s “method of decreasing abstraction”, commencing with a simple framework and, in successive stages, incorporating additional assumptions as necessary on the basis that: “a model should be as simple as possible and as complex as necessary”.26 Second, one of the objectives of this chapter is to challenge parts of agency theory and tournament theory. Although widely adopted by management scholars27 and highly influential in the design of corporate governance frameworks,28 these are both essentially economic models. Therefore, I have deliberately adopted an economic model of Fairness as my starting point. Third, I recognise that, in the context of a values-laden concept like Fairness, normative and positive distinctions become intertwined. Hume’s law (an “ought” cannot be derived from an “is”) does not proscribe the converse (i.e., there is no reason why an “is” cannot be derived from an “ought”). Fairness cognitions affect Fairness beliefs, which in turn influence Fairness perceptions, thus motivating Fairness behaviours. “Should” judgements involve a degree of what Donald Mackenzie calls “performativity”.29

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  A New Approach to Cross-Cultural People Management

  People are People

  • Robert Grosse(Author)
  • 2023(Publication Date)
  • Routledge

    (Publisher)

  In the context of their jobs, people everywhere expect to be treated fairly. There are several dimensions of Fairness, which are not all equal across countries and cultures. For the most part, people expect to have clear rules about what their jobs entail and what behavior is appropriate. This procedural Fairness is an expectation that exists everywhere. On the other hand, the outcomes of decision-making differ to some extent across cultures and countries, so Fairness in things like compensation is not as easy to identify or achieve.

  Goal or approach Fairness has become more nuanced in the 21st century, as Millennials and Gen Z employees and executives look for their companies to pursue nontraditional goals such as providing equal opportunities to women or aiming for the company to reduce its carbon footprint (i.e., its contribution to global warming). When a company includes in its statement of principles or its mission some of the United Nations SDGs (sustainable development goals), then Fairness implies rewarding individual activities that support the achievement of those goals. There is a long way to go to get from the slogans that have popped up to some kind of orderly way to measure achievement of these goals and to reward performance for such behavior. Even Google’s statement “Don’t be evil” is not particularly measurable – although it does clearly signify the company’s intent. And Facebook’s original slogan, “It’s free and always will be” had a similar pro-equality and positive social impact intent, even though it also was difficult to measure.

  Perhaps the single most important aspect of Fairness is how it is perceived. No matter what system for decision-making or evaluation that may be used, or what rewards are offered for good performance, the critical element in all of this is how the employee/individual perceives the Fairness of the process or the decision. A successful company needs to pay careful attention to getting that perception lined up with the company’s intent, through communication with employees, through training of managers and executives about how to coach their people and through maintaining a consistent process that rewards superior performance.

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  Fairness and Justice in Environmental Decision Making

  Water Under the Bridge

  • Catherine Gross(Author)
  • 2014(Publication Date)
  • Routledge

    (Publisher)

  2 Theories of justice and the search for Fairness

  This chapter considers how a range of disciplines concerned with justice theories have dealt with justice and Fairness. The aim is to provide a broad overview of theories of justice and to describe specific ideas and constructs of justice that could be relevant in natural resource sharing. While much has been written about justice, and the topic receives a good deal of attention in a variety of disciplines, there are some key themes of particular interest in the context of resource sharing. The chapter starts with some definitions of justice and how these relate to different aspects of society. It then explores justice in the way people are treated; justice in decision-making processes; and justice in decisions about sharing. This is followed by a section on why people care about justice, motivations for justice and how people become engaged in matters of justice. The discussion then considers distinctions between justice and injustice, and between justice and Fairness, followed by thoughts about why theories of justice are important. Finally, the chapter summarises several key justice themes that could be useful in developing an understanding of Fairness and justice in environmental decision making.

  What is justice?

  All I would suggest is that justice is not something you can see. It is not temporal but eternal. How does man know what is justice? It is not the product of his intellect but of his spirit. The nearest we can get to defining justice is to say that it is what the right-minded members of the community—those who have the right spirit within them—believe to be fair.

  (Denning 1955: 4)

  The meaning of the term justice has been debated for centuries. Scholars, philosophers and ordinary folk alike have debated and described their view of what justice means to them. This review begins with Sir Alfred Denning’s perspectives on justice. Denning’s description of justice in the quotation above reflects what he perceives as a general difficulty in coming up with a solid and unambiguous definition. For Denning, justice is more about the ‘spirit’ than the ‘intellect’, and justice is also about people deciding what is ‘fair’. In his book The Road to Justice

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  Understand Political Philosophy: Teach Yourself

  • Mel Thompson(Author)
  • 2010(Publication Date)
  • Teach Yourself

    (Publisher)

  5

  Equality and Fairness

  In this chapter you will learn:

  • about what constitutes a fair sharing of resources
  • about the impact of the economy on political life
  • about capitalism and equality
  • about democracy and the problem of minorities.

  The phrase ‘It’s the economy, stupid’, first used during Bill Clinton’s successful presidential campaign against George Bush in 1992, highlights the way politics and politicians are judged today. In 1992 it referred to the fact that America was in recession, and the Clinton campaign team wanted to show that this was a failure of the Bush administration. Increasingly, governments are being judged on their ability to deliver on the economy, and opposition parties are concerned to set out their economic policies, in the hope that electors will trust them to run the country better than the present administration. When it comes to election time, therefore, the economy is key. But why should the economy have such importance in the assessment of political life?

  Essentially, people want to feel that they are being treated fairly, for example, that they are not paying too much tax relative to what they receive back from the government. They complain if another section of the population is being given benefits that they are denied – whether it is tax incentives or social security payments – on the grounds that people should be treated equally and fairly .

  Foundational values

  When thinking through any problem, it is useful to start by establishing your own foundational values – in other words, principles that you hold which you are unwilling to compromise on.

  Two key foundational values for political philosophy are equality and freedom

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  Global Political Theory

  • David Held, Pietro Maffettone, David Held, Pietro Maffettone(Authors)
  • 2017(Publication Date)
  • Polity

    (Publisher)

  Linguistically speaking, it is a curious fact that the language of ‘fair trade’ is used in such different ways. Philosophically speaking, the question arises of whether the two meanings are finally separable. Might a principled account of the one allow us to understand or explain the other?

  According to one such explanation, Fairness in international trade is primarily, or even simply, a matter of Fairness in separate trades. Institutions count as fair according to whether they facilitate cross-border exchanges for fair, mutual personal gain. On a right-libertarian version, minimal states would protect people against wrongful force and fraud, but otherwise leave outcomes to the market, in the hope that voluntary exchange for mutual benefit will emerge the world over. A Marxist variant adds further institutions, of property and politics, in order to protect relatively disadvantaged workers from exploitation, by ensuring that labour agreements give workers their fair share of the firm's cooperative surplus. And on a distributional egalitarian version, still further institutions would help the mass of separate exchanges along, not only in advancing human welfare, but also in equalizing life prospects for people worldwide (this is one reading of Julius, 2013, 2014). The general approach shares the idea that interpersonal Fairness, perhaps mediated by institutions, explains Fairness generally.

  An opposing approach – which I modestly call ‘world-historical’ – takes the institutional meaning as its point of departure.2 Our task as theorists, on this approach, is not to formulate our own favoured ideal for global economic life, but rather to say what people are owed in the global economy as we know it, roughly as received from history, in the hope of intervening in major decisions about its overall shape and future direction. We thus begin from our best understanding of its organizing social practice, in view of its history and our best evidence about the available directions for its future in coming centuries (e.g., James, 2005b, 2006, 2012, 2014a; Risse, 2007, 2013; Risse and Kurjanska, 2008; Risse and Wollner, 2014). On one interpretation, for instance, the global economy is constituted by an international social practice, in which whole societies mutually rely on common markets, for the sake of augmenting their national incomes (James, 2012: ch. 2). Accordingly, it may be added, Fairness is chiefly an international

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