Chapter 3: Ethics for Policy Analysts “If liberty and equality…are chiefly to be found in democracy, they will be best attained when all persons alike share in the government to the utmost.” Aristotle “It is the greatest happiness of the greatest number that is the measure of right and wrong.” Jeremy Bentham “All animals are equal but some animals are more equal than others.” George Orwell.

Your Turn 3-1: What are your views on each of the following questions?  Does an individual have a right to engage in self-destructive behavior, and does government have the right to prevent him or her from doing so?  Does an affluent society have the responsibility to provide an adequate minimum level of income for those who cannot support themselves? For those who choose not to support themselves?  Is it ethically necessary to provide the highest technically possible level of safety in transportation, factories, and homes, regardless of the cost to consumers, taxpayers, or workers?  Should income equality be an important goal of tax and spending policies? Should the rich pay a higher percentage of their income in taxes than the poor?

Questions Regarding Basic Human Rights  What are rights?  Which rights are basic?  Why are these basic rights? Whose rights should we respect: Our nation’s citizens, all humans, other animals?

The Meaning of Freedom  Which of the following equations is more correct? Is either fundamentally incorrect?  Freedom = Democracy  Freedom = Liberty

Dimensions of Equality “Not only do income-egalitarians...demand equal incomes, and welfare- egalitarians ask for equal welfare levels, but also classical utilitarians insist on equal weights on the utilities of all, and pure libertarians demand equality with respect to an entire class of rights and liberties.” Sen, 1992  Discuss the dimensions of equality mentioned in the quote by Sen.  Which dimensions of equality are most important to you?  Are any of these dimensions likely to be inconstant or contradictory?

Utilitarianism’s “Bumper Sticker”: The greatest good for the greatest number  What do we mean by the greatest good, and how might it be measured?  What is the “greatest number” we should use in assessing society’s well-being?

The meaning of “Utility”  “By utility is meant that property in any object, whereby it tends to produce benefit, advantage, pleasure, good, or happiness..., or to prevent the happening of mischief, pain, evil, or unhappiness to the party whose interest is considered.” (Bentham)  In what sense is maximizing utility a worthy goal?  In what ways might utility be inconsistent with some meanings of morality or societal well-being?

Extreme Utilitarianism vs. Restricted Utilitarianism  Extreme utilitarianism: Each action may be judged according to its effect on society’s aggregate utility, independent of any general rules. If the gain in utility to some outweighs the loss to others, then the policy is just according to this interpretation  Restricted utilitarianism: Society establishes a set of rules for society based on achieving the greatest good for the greatest number. Each individual action must follow these rules, regardless of its effect on the individual or society.

Rawls’ Theory of Justice Basic Concepts  The original position is a state of affairs in which the parties are equally represented as moral persons and the outcome is not conditioned by arbitrary contingencies or the relative balance of social forces.” (Rawls)  The Veil of Ignorance : “No one knows his situation in society nor his natural assets, and therefore no one is in a position to tailor principles to his advantage”  The Difference Principle : “All social primary goods -- liberty and opportunity, income and wealth, and the bases of self-respect--are to be distributed equally unless an unequal distribution of any or all of these goods is to the advantage of the least favored.”

Your Turn 3-2:  Which of the following 3 income distributions would you choose?  Which is consistent with the Difference Principle?  If your choice is not consistent with the Difference Principle, discuss why. Distribution 1 Distribution 2 Distribution 3  Person 1 $15,000 $14,000 $13,000  Person 2 $15,000 $20,000 $1,000,000,000  Person 3 $15,000 $20,000 $1,000,000,000

Robert Nozick and the Minimalist State  “There is no central distribution, no person or group entitled to control all the resources, jointly deciding how they are to be doled out. What each person gets, he gets from others who give to him in exchange for something, or as a gift. In a free society...new holdings arise out of the voluntary exchanges and actions of persons.”

Nozick’s Concepts  Just Acquisition : If the property is not spoiled, if adequate property remains for others, and if the property is used productively, the acquisition of un- owned property is just. However, one person’s labor may not be owned by another.  Just Transfer : Transfers are just they are made through voluntary and informed exchange between the two parties. If a person offers a service which many people are freely willing to pay for, then there is no ethical limit on that person’s earned income.  Moral Side Constraints : Limits on what individuals, groups, or institutions may do in pursuing their ethical or other goals. These constraints need not be the same as the goals themselves.

A Graphical Representation of Redistribution

The Utility Possibilities Frontier  A Utility Possibilities Frontier measures the utility of two individuals measured on the horizontal and vertical axes.  A neutral transfer is a costless transfer of income which does not alter either party’s behavior or productivity. With = tastes, the two endpoints are equal.  A non-neutral transfer can alter productive behavior and can involve costs.

Utilitarian Optimal Transfer with Neutral Transfers (3-1) Utilitarian Social Welfare Function = U Ritchie + U Paul (3-2) The Utilitarian Social Indifference Curve U Paul = SWF Utilitarian - U Ritchie. (slope = -1)

Utilitarian Transfer with Non-Neutral Transfers (significant inequality remains) The Utilitarian Redistribution Rule: Redistribute income as long as the marginal utility of the income gained is greater than the marginal utility of the income lost.

The Rawlsian social welfare function  The difference principle implies that society’s well being is based on the well being of the least well-off person.  As a formula, SWF = min[U Ritchie, U Paul ],  Rawlsian Indifference Curves are L-shaped

Rawlsian Optimal Transfers According to the Difference Principle, is A or B the preferred distribution given non-neutral transfers? Why?

Nozick: Non-Voluntary Transfers with and without a Moral Side Constraint on Income

Your Turn 3-3 : If you had to choose, would you identify yourself as most in agreement with utilitarians, Rawls, or Nozick?

Conclusion  The greatest possible total happiness, the greatest possible equality, the greatest possible achievement of basic human rights, and the greatest possible adherence to a fair process are very different goals for society, and inevitably lead to conflicting policy judgments.  Ethics is most effective when it leads to the universal application of norms which, for many, involve a degree of personal sacrifice for the social good.  Understanding more about ethics may deepen your understanding of the logic and limitations of your particular ethical and ideological preferences, and also introduce a healthy degree of open-mindedness to your policy positions.