The New Yorker published a piece, “The Fairness Trap,” echoing the issues I wrote on yesterday in the context of the U.S. foreclosure and Greek economic crises. In both cases, people’s desire to punish people conflicted with clearly better economic solutions, according to the author.
He talks about fairness, basically the same concept as justice — reacting to emotions like outrage, indignation, and self-righteousness over agreeing on criteria to evaluate future outcomes on and trying to achieve the best one based on those criteria.
A major problem with fairness, justice, outrage, indignation, self-righteousness, and the like is their subjectivity. We may personify justice as holding scales, but no scale can evaluate when an outcome or behavior is right or wrong, just or unjust, fair or unfair. Each of us has our opinions.
But the catch is that Europe isn’t arguing just about what the most sensible economic policy is. It’s arguing about what is fair.
The basic problem is that we care so much about fairness that we are often willing to sacrifice economic well-being to enforce it. Behavioral economists have shown that a sizable percentage of people are willing to pay real money to punish people who are taking from a common pot but not contributing to it. Just to insure that shirkers get what they deserve, we are prepared to make ourselves poorer. Similarly, a famous experiment known as the ultimatum game—one person offers another a cut of a sum of money and the second person decides whether or not to accept—shows that people will walk away from free money if they feel that an offer is unfair. Thus, even when there’s a solution that would leave everyone better off, a fixation on fairness can make agreement impossible.
The piece closes by connecting those cases to the general case of fairness and motivations based in self-righteousness conflicting with evaluating economic outcomes based on principles more people can agree on.
From the perspective of society as a whole, concern with fairness has all kinds of benefits: it limits exploitation, promotes meritocracy, and motivates workers. But in a negotiation where neither side can have what it really wants, and where the least bad solution is as good as it gets, worrying too much about fairness can be suicidal. To move Europe away from the brink, voters and politicians on all sides need to stop asking themselves what’s fair and start asking themselves what’s possible.
I prefer to connect this conflict to our personal decisions since we face them more often and have to resolve them ourselves.
Emotions are important. They determine value and meaning in our lives so I don’t discount their importance in choosing how to act. But we can control our emotions — those of us who have learned how — and can create the ones we want to create the outcomes and lives that we want.