It is normal for people to want more for something that they have put effort into. One just knows that the result should be about this amount for his or her effort, but it never hurts to get more. If the work was done individually, there would not be too much of a problem about the result though. You do the job, you get the result. However, many of the problems occur when there is a collaboration of work between or among people, and there is not a fair distribution for the result process. The article '
How to Get the Rich to Share the Marbles' by Jonathan Haidt introduces an interesting result about the equity concept, or in other words, who gets which part of the pie.
Equity, unlike efficiency, is more towards non-economical sciences such as psychology, sociology, or politics. It is more about reasoning than doing the calculations in my personal thoughts. Of course, some calculations are necessary, but the distinction to make the distribution is based on the criteria created by human minds. The distribution process will be affected largely by the individual's characteristics if it is taking place in a partnership. If the size of the group that distribution is taking place gets larger, things will be more complicated and there has to be a set of pre-designated rules to avoid the conflict (which will be rigged anyways by some people who can use individual resources to make the game in their favor, according to the article).
Problems even exist in the smallest form of group, partnership.
I once had an experience to enter a application development contest for cell phones in Korea with a junior in my high school. We were quite close as friends, and we planned it for this contest from quite some time before. We had the second prize as a result, and we were both happy about the achievement that we made. However, there was a problem in the distribution process; I was a senior and was not able to participate as much as my partner did for the app development since I had SATs to take and personal essays to write for the colleges, and the prize of $1000 had to be distributed into two pieces (certainly it was not to be equally distributed). However in this case, it was quite the opposite for the problem from the usual cases: I wanted the prize money to be unequally distributed, based on the amount of work that we did respectively, and my partner wanted to share the prize in equal half, which was $500, since we both participated in the contest as a team.
To tell you the result first, we divided the money in 3:7 ration, which I got the three part. It was not really hard to convince him to get the seven part, since nobody dislikes getting more. However, the reasoning part was quite thorough in my side. Although we both entered and won the prize in the contest as a team, I believed that there should be clear distinction of who gets what, regardless of anything else, including the age (yes, age matters in Korea. The older you are, the more superior you are.) More than having a fair distribution, my partner wanted to treat me as a older 'senpai' (a Japanese term for indicating a senior in the hierarchy, in this case, school) and understand my reasons for being unable to participate fully due to the college entrance preparation. But we had an agreement to divide the money into 3:7 ratio, since I convinced him that I did not want half of the prize, because would doing so would make me feel terrible in regards of the distribution being 'unfair'.
This is one of the experiences that make me thing the equity concept is closely related to human characteristics. Even if the group's size gets bigger, it is human beings who creates the laws and criteria for distribution. Of course, we saw too many bad examples of how the law is abused during distribution phase, but the bottom line is that if the group is consisted of people more willing to share, the distribution will be much more flexible and lenient. In the opposite case, it will be very similar to the third experiment that was introduced in the article by Mr. Haidt, which people will collaborate as a team, but distribution fails since people who have more resources to make the rules in favor for them will rig the game for personal profits. Sadly, our society shows the latter type of examples much more than the former one. The way to make people willing to share more will have to be on the matter of 'did you get the result in a fair way?', appealing on their good, moral side of the personality.
If you haven't heard of John Rawls and his concept called "the veil of ignorance" you should do some background reading on that. He has a very famous book called Justice as Fairness, where he argues, in essence that a socially just solution makes the worst person in society as well off as possible. Rawls, incidentally, is a philosopher.
ReplyDeleteThere is, however, a different way to think of equity matters - as social insurance. Unemployment insurance fits this bill well. You may have a good job now, but sometimes in the future your employer may struggle and you might lose your job as a result even if you were working very hard at it. The unemployment insurance then can help you in the interim till you find a new job and allow you to be a little bit more choosy about the next work you take, rather than accept immediately the first job that comes along. That might actually be efficiency enhancing.
So your parsing of efficiency and equity, might sound good at first pass but it isn't so easy to do it in practice.
Thank you for your comment, professor Arvan. I should definitely find that book and read it out.
ReplyDeleteI understand that 'only' looking at human characteristics does not lead us to an efficient outcome. Although I think it is a very important, core concept in making decisions for the equity process, I certainly do not think it should be the only concept that should matter in distributing the pie. The point I made in the post seems I pretty much care only about the humanistic criteria of distribution, but I know some things cannot be solved with that particular criteria only.
Social insurance is a good example indeed; one can ponder upon the next work choice more thoroughly without being hasty, as you have mentioned in the comment. However, the social insurance itself is also subjected to abuses: people who abuse the system thinks of it as low risk, high return activity.
Every process has its cons and pros, and I think the processes are a combination of different criteria, matching in for a specific situation. It would be hard to just apply only the human characteristics into the process, but I guess disregarding it would be causing lots of problems regarding the moral aspects.