June 2011 – Andrew Lister

Hayek on Inequality

In the second volume of his Law, Legislation and Liberty, which is entitled The Mirage of Social Justice, Hayek makes the following claim:

Though it might seem reasonable so to frame laws that they will tend more strongly to improve the opportunities of those whose chances are relatively small, this can rarely be achieved by generic rules. There are, no doubt, instances where the past development of law has introduced a bias in favour or to the disadvantage of particular groups; and such provisions ought clearly to be corrected. But on the whole it would seem that the fact which, contrary to a widely held belief, has contributed most during the last two hundred years to increase not only the absolute but also the relative position of those in the lowest income groups has been the general growth of wealth which has tended to raise the income of the lowest groups more than the relatively higher ones. (p.131, emphasis added)

In the footnote to this paragraph, Hayek adds:

The chance of all will be increased most if we act on principles which will result in raising the general level of incomes without paying attention to the consequent shifts of particular individuals or groups from one position on the scale to another… It is not easy to illustrate this by the available statistics of the changes of income distribution during periods of rapid economic progress. But in the one country for which fairly adequate information of this kind is available, the USA, it would seem that a person who in 1940 belonged to the group whose individual incomes were greater than those of 50 per cent of the population but smaller than those of 40 per cent of the population, even if he had by 1960 descended to the 30-40 per cent group, would still have enjoyed a larger absolute income than he did in 1940. (p.188, emphasis added).

I think Hayek is comparing the mid-point (average income) of the 50-60 decile with the mid-point of the 30-40 decile. I couldn’t find data for 1940 on deciles, but the data on quintiles for the U.S. are readily available back to 1947. The picture they present is very interesting.
Continue reading Hayek on Inequality

POLS 451: Libertarianism and Its Critics

Last year I taught this course as POLS 456, even though the description of that course is “politics of identity”. This year I will be teaching it as POLS 451.

Course Description: “This course examines some of the main theoretical defences of free markets, private property, and the limited state, covering thinkers such as Friedrich Hayek, Milton Friedman, Ayn Rand, Robert Nozick, and Gerald Gaus (not all of whom are libertarians in the strict sense). The course also covers the recent development of “left-libertarianism,” which tries to reconcile the libertarian principle of self-ownership with an egalitarian approach to the division of the world’s resources.”

Recent Activity

Not yet back in town, but in the meantime, some work to report:

“The ‘Mirage’ of Social Justice: Hayek Against (and For) Rawls” Slightly revised text of a lecture I gave at Balliol College, May 10, 2011. Thanks to last year’s POLS 456 class for stimulating these thoughts about why Hayek was really a Rawlsian (or would have been, if he’d consistently applied his basic normative ideas). I will be reworking this paper for publication as part of a symposium on Hayek, so comments are welcome.

“Justice as Fairness and Reciprocity.” A paper about the relationship between justice and reciprocity, starting from the disability critique of Rawls’s contractualism, moving on to global justice. Also based on a lecture I gave this year at Balliol. The paper will be published in the journal Analyze & Kritik.