This week’s “Daily Journal” guest columnist is Dr. Karen Palasek, director of educational and academic programs for the John Locke Foundation.
How can you determine whether a policy or piece of legislation is fair — and should fairness be the criterion for deciding whether or not to adopt it?
At the risk of appearing to attack a concept that is revered in public and private decision making alike, I would like to propose that “fairness” — at least as a standard for setting and enacting public policy — be dumped. I suggest that we adopt a better policy standard instead. Wisdom would be my choice, since fairness often misses the mark as its proxy.
As it’s usually applied, one way in which fairness seems to get its legitimacy is by insisting that all parties be treated with equal status, or as equal stakeholders, in a policy decision. Education policy exhibits a lot of this. Another is that, somewhat paradoxically, allowing special treatment for one interest group subsequently requires that we offer special treatment for all like interest groups on an equal footing. The treatment of firms under North Carolina’s economic development policy and tax incentives are examples in this category. Several arguments suggest themselves in this regard.
With so many claims for policy attention — in dollars, legislation, programs, bailouts, etc. — competing against one another for resources from government, it is really difficult to know what a fair approach to satisfying these claims really is. The idea that we must treat all claims as equally valid, in the interest of preserving fairness, also has the potential to introduce all kinds of distortions into our thinking and our policy decisions.
A few examples of why fairness is a poor standard may illustrate. Let’s start with some trivial (and private) cases of fairness “policy,” like the awarding of prizes for winning in children’s party games, or giving awards for informal playground athletics. Somewhere along the way the idea became accepted that fairness required all children to be acknowledged as winners — regardless of where the donkey’s tail got pinned or who finished the 50-meter dash first. I recall a 4-year-old’s birthday party at which one parent was appalled that all of the kids weren’t slated to get prizes for each of the games. Since I (the host) had already invested in an elegant plastic glasses-nose-mustache combo for each kid, plus other party stuff, I wasn’t really prepared for this particular assault on my standards. The fairness/unfairness element clearly escaped me. Everyone managed to push on bravely, however, and all of the children went on eventually to become 5-year-olds. Some of the parents, as well, I suspect. And while it’s one thing to level the playing field, it’s another to level the winner’s circle.
But this is hardly policy, just bad life training, so let’s take it up a notch or two.
In North Carolina we have seen a succession of tax incentives offered by state and local governments to entice companies to locate here. But in fairness, once we do that for one firm, we are compelled logically to justify why we should not offer incentives to others. Pleas and promises that offer the same sorts of return in exchange for the same sorts of concessions are extremely difficult to discriminate between, based upon claims that appear to be equally valid. So the (initially somewhat limited) incentives policy in North Carolina has begun to morph toward full-scale competitive corporate welfare and corporate rent seeking, funded by taxpayers.
Even if this kind of industrial policy — with state government essentially picking winners — produced its promised economic results — and these policies repeatedly do not — the unintended consequences are real. Families move and relocate, unrecoverable investments are made, and alternatives that never materialize, and therefore can’t be measured, are foregone. The difference this kind of policy has made to current revenue collections, possibly to budget shortfalls, and to spending priorities in North Carolina, however, is real even if unseen. More importantly, the difference it has made to family incomes, budgets, tax liabilities, and government services is also real, and in the current environment likely to become increasingly painful. The difference it has made in real and perceived notions of how public policy operates has eroded confidence in the Ethical qualifications of those in political leadership.
And now let’s consider “fairness” in the social setting. It’s a little bit ancient, but will serve for a start. In modern parlance, it might go something like this:
Two women walk into court, accompanied by an infant child. Each claims the child as their own, and each insists that the judge cede custody exclusively to them. With no outside evidence available of who is the liar, and who the rightful parent, the judge declares an even-steven solution and calls for the means to carry out his fair judgment. The means, in this case, is a sharp instrument with which he proposes to cut the child in two. Only in this way can he send each claimant off with her fair share of the child. Before that can happen, one woman withdraws her claim. The child’s life is spared as a result. One woman leaves with the intact infant.
This, of course, is the famous story of King Solomon. It illustrates (read an authentic version) the folly of treating this kind of equal-allocation fairness as an overarching standard for what is good and desirable in society, instead of what is wise. Dividing children’s hours rather than their limbs in modern custody disputes is probably not viewed as fair by either disputing party, which points again to the difficulty of making fairness a proxy for wisdom.
Fairness in policy, often enacted as equal access to special-interest privileges, or as a claim to equality of results, nonetheless remains very appealing. In part, this is because it is also judicious, and we respect the decision of a capable judge. But judicious means “subject to judgment call,” in policy circles made by our legislature. This is problematic when a policy decision puts the interests or rights of different groups at odds with one another. As in our industrial and other policy areas, what is politically or economically expedient for some party in the discussion is often what is enacted. Of near-term interest to many Americans, given the aging American demographic picture, is health care policy and America’s health care future. What one group of Americans would consider supremely fair in health care, given their time, patriotism, pay-in, and other factors, another might well see as an increasingly useless drain on the system.
What seems like one’s fair share — speaking again of results — of the economic or public policy pie is ultimately a judgment call made by someone. And to satisfy everyone’s claims via policy may imply, metaphorically, cleaving a functioning system — very different from an inert “pie” — into terminal pieces. The consequences of decreasing control of market functions by private risk-taking investors and entrepreneurs has not come to fruition yet, and will be spinning out implications for a long while to come, but it’s clear that they are expected to be significant. And also, in a true sense, not respectful of personal dignity and individual rights. Truly, not fair.