Today’s David Brooks piece (I know, I shouldn’t give him the pageviews, but it’s worth reading for its anthropological value) could not have painted a better picture of the problems that notions of fairness have on societal outcomes. In his piece, Brooks basically says that unions should suck it up and take the crushing blow, because everyone should make way for the “new unwritten constitution” of the outsourced, contracted state. (This worked really well for public utilities and airlines in the 80s! Just ask British Rail!) (Also, did he really call Scott Walker a new founding father?!)
In any case, the problem with fairness is that it often does not line up with the most efficient outcome. Consider the ultimatum game — a basic two-person behavioral economics game. Person A makes a proposal of how to divide 10 dollars among A and B. If B accepts the proposal, they both get the money from the proposal. If B rejects the proposal, they both walk away with nothing. If people were rational, then B would accept the offer every time, even if A only offers one penny. But in lab and field experiments, B rejects the offer if it’s below a certain threshold.
On the one hand, this is a positive quirk of human behavior. After all, people are not merely selfish; they also value fairness. Yet, there is a darker side to this. If we perceive that someone is getting a free ride, our instinct is to punish them, even at risk to ourselves. This works well as far as it goes to eliminate free riders that burden the system, but taken too far, it causes highly inefficient outcomes.
For example, if Brooks intends to “make everybody hurt” by laying off state workers, the economic downturn will be more pronounced. Fewer workers means lower consumer spending. Teachers have long-term value, so laying them off in droves hurts long-term prospects. State bureaucrats — the most shit-on of all state workers — need to actually run the state! (One doesn’t expect Gov. Walker to do the heavy lifting.)
The other unfortunate quirk of the human brain is that we miss bias the in-your-face information (true or not) in front of us at the expense of the boring facts. Brooks intends for everyone to hurt. What he doesn’t acknowledge is that poorer, less-well-educated workers are already hurting the most:
The cops and firefighters, the clerks and secretaries, the construction workers and nurse’s assistants — they’re already feeling the hurt. Making them feel it more may make David Brooks feel better, but it won’t solve the budget problem. The more people that are unemployed, the more unemployment benefits to pay, the less taxes are being paid. How is this helping exactly? This is the same “fairness” instinct that made the erroneous “welfare queen” stories so persistent. Brooks stands for efficiency, except when he can see people who might not be equally suffering, no matter the cost to the broader economy.
But punish the freeloaders working off of state coffers. They’re the ones who have to hurt now.