Equity is Not Equality in the Realm of Economics

NCFCA Lincoln-Douglas debaters prepare to argue both for and against the chosen resolution: Resolved: In the realm of economics, freedom ought to be valued above equity. 


On the negative side, students can emphasize that in the realm of economics the value of “equity” is not the value of “equality.” Political and legal equality we should defend: people’s equal rights before the law should be secure. But people don’t have “equal rights” before the marketplace. Earning power depends upon skills and abilities, as well as on chances, connections, and circumstances that help land a job where relevant skills and abilities are rewarded. And even chance and connections favor the well-prepared.

Equity in the marketplace is in treating people fairly. But fairness is not so obvious and it’s not unfair that great basketball and baseball players are paid much more than other players. It is not unfair that salespeople who make the most sales and entrepreneurs who build the most successful enterprises earn the most. Equality of income in the “realm of economics” is not a worthy goal for the negative and should be resisted if the affirmative tries to impose that position in speeches or cross-examination.

The value of equity is not achieved by everyone being paid similar wages, but instead, I would argue, where people are treated fairly in their lives, liberty, and pursuit of happiness. How then do we identify fairness?

People should not be constrained by legislation, by force, from pursuing the careers and occupations they desire. In City of Ember young people are given jobs on Assignment Day by drawing them out of a hat. In a sense it is a fair system where every young person has an equal chance to draw both fun jobs and unpleasant ones. Maybe that’s more like in a family where father and mother assign tasks around the house or on the farm to their children.

Is it fair that some people are assigned the job of mold scraper in the City of Ember, or in my city of Burien that some people have the job of collecting the trash, sweeping streets, or repairing roofs? Maybe everyone should take turns doing unpleasant jobs. Or maybe these jobs should have higher pay or shorter hours. Designing a fair and just society in our minds and from our armchairs is a curious and essentially totalitarian task. Academics who write on social justice and reform are more likely to assign themselves the task of running the city, rather than tasks like pipeworks laborer or mold scraper.

Popular perceptions tend to think of justice in family or community situations rather than in the realm of economics. F. A. Hayek refers to “social justice” as a mirage, and Paul Heyne argues against the phrase:

When theorizing about justice, we are inclined to assume that justice is a characteristic of configurations or patterns: that justice requires some particular allocation of socially created goods. When we are acting, however, and not being misled by our theorizing, we recognize that social justice is primarily a matter of obeying the rules. We avoid injustice by adhering to the rules that govern the situation in which we are acting.

The idea of “social justice” confuses the sense of right and wrong we expect in a family or among friends with our sense right and wrong about the larger economy, a realm where millions of people we don’t know and can’t know produce the goods and services used by families and friends we do know.

Consider the challenge of fairness and equity in your debate club. It appeals to our sense of justice that everyone should do their share of the research. But how is this to be accomplished? Should everyone be asked to supply an equal amount of research? What if some students research much faster? Should these speedy researchers just take it easy when they finish their “equal” share, and while others continue research? Or does our sense of fairness expect them to apply equal time or effort, even when they end up producing much more than an “equal” amount of research?

In this most debate teams, like most families, probably follow the Marxist maxim: from each according to their ability and to each according to their needs. And that’s a fair system for families and perhaps debate teams, but not for societies in the realm of economics.

Natural social orders in extended societies are far more complex than most social theorists realize, so their various schemes to achieve family-like social justice quickly fall apart in the real world. Frédéric Bastiat was a master in explaining to the general public the marvelous complexity of economic systems. Bastiat asks us in Economic Harmonies to consider the case of the cabinetmaker:

Let us take a man belonging to a modest class in society, a village cabinetmaker, for example, and let us observe the services he renders to society and receives in return. This man spends his day planing boards, making tables and cabinets; he complains of his status in society, and yet what, in fact, does he receive from this society in exchange for his labor? The disproportion between the two is tremendous.
1.8Every day, when he gets up, he dresses; and he has not himself made any of the numerous articles he puts on. Now, for all these articles of clothing, simple as they are, to be available to him, an enormous amount of labor, industry, transportation, and ingenious invention has been necessary. Americans have had to produce the cotton; Indians, the dye; Frenchmen, the wool and the flax; Brazilians, the leather; and all these materials have had to be shipped to various cities to be processed, spun, woven, dyed, etc.
1.9Next, he breakfasts. For his bread to arrive every morning, farm lands have had to be cleared, fenced in, ploughed, fertilized, planted; the crops have had to be protected from theft; a certain degree of law and order has had to reign over a vast multitude of people; wheat has had to be harvested, ground, kneaded, and prepared; iron, steel, wood, stone have had to be converted by industry into tools of production; certain men have had to exploit the strength of animals, others the power of a waterfall, etc.—all things of which each one by itself alone presupposes an incalculable output of labor not only in space, but in time as well. (Economic Harmonies, Library of Economics and Liberty)

Life in the realm of modern economics is far more than fair, far more than equitable to most, even to the village craftsman. We enjoy each day the fruits from a few centuries of industrial and agricultural discovery and innovation, and from millions of complex commercial firms and processes around the world. Modern society is far more than fair for most, though ignorance of history and economics can still leave people frustrated and embittered. And that’s not fair to them. Maybe the greatest degree of inequity in modern society is to be found in the ignorance and misinformation of so many.

Bastiat writing in 1850, further explains the blessings of modern society:

It is impossible not to be struck by the disproportion, truly incommensurable, that exists between the satisfactions this man derives from society and the satisfactions that he could provide for himself if he were reduced to his own resources. I make bold to say that in one day he consumes more things than he could produce himself in ten centuries.
1.17What makes the phenomenon stranger still is that the same thing holds true for all other men. Every one of the members of society has consumed a million times more than he could have produced; yet no one has robbed anyone else. If we examine matters closely, we perceive that our cabinetmaker has paid in services for all the services he has received. He has, in fact, received nothing that he did not pay for out of his modest industry; all those ever employed in serving him, at any time or in any place, have received or will receive their remuneration.
1.18So ingenious, so powerful, then, is the social mechanism that every man, even the humblest, obtains in one day more satisfactions than he could produce for himself in several centuries. (Economic Harmonies)