Reciprocity and Productive Incentives

I have a paper that’s been accepted at the Canadian Journal of Philosophy entitled “Publicity, Reciprocity and Incentives.” The paper mounts a partial defense of what’s known as the “basic structure objection” to the egalitarian critique of productive incentives. The first paragraph provides an overview of the questions at stake:

There is a longstanding debate about the extent to which social justice permits individuals to benefit from their natural talents. On the one hand, it may seem that individuals have a right to the fruits of their labour. On the other hand, superior abilities are already rewarded with personal enjoyment and public admiration of their exercise, ‘without adding to these a superior share of the world’s goods’ (Mill 1969, 254). Socialists recognized that it might be necessary to offer incentives for those with scarce talents to put them to good use, but they tended to view this ‘rent of ability’ as an unfortunate compromise (Jackson 2007, 72-9). Liberal egalitarians have not been so clear about the moral status of incentives. If inequalities benefit the worst off, Rawls’s difference principle seems to count them as just. Yet critics argued that individuals who accepted the rationale for this principle would not expect extraordinary wages for ordinary work, simply because they were blessed with superior productive ability (Grey 1973; Narveson 1976; Cohen 1992). According to G.A. Cohen, people’s economic choices ought to be guided by an egalitarian ethos (Cohen 2008, 2, 17, 123). Even if we all shared the same egalitarian conception of justice, however, we might be uncertain about the extent of compliance with duties that are not legally enforceable. Moreover, real societies are home to a diversity of conceptions of justice, many of them not egalitarian. Are egalitarian norms still binding, or might lack of assurance about the compliance of others justify what would otherwise be objectionably self-interested choices?

The paper addresses a longstanding debate about liberal egalitarian conceptions of distributive justice. If social inequalities benefit the worst off it seems they can be justified to the worst off, rendering these inequalities compatible with mutual respect in a society of equals (Rawls’s “difference principle”). Unequal pay for equally arduous work could incentivize those with scarce skills to deploy them where they are most needed, and so generate prosperity that could benefit everyone, including the worst off. Early on, critics (Thomas Grey, Jan Narveson) questioned whether such incentives were truly justifiable to the worst off. Are those with scarce talents morally justified in withholding their efforts from the community unless rewarded with superior pay for the same amount of work? It may be true that inequality-generating incentives will benefit the worst off, but this claim is not one that the better off could offer to the worse off as a justification for these inequalities, because it is the decisions of the better off that are responsible for making it the case that unequal rewards are necessary to elicit their productive effort. G. A. Cohen argued that in a fully just society, people’s everyday economic decisions would reflect an “egalitarian ethos.” People with greater productive capacity wouldn’t bargain so hard for higher pay, and would be willing to work reasonably hard even under high marginal taxation. They would even make some sacrifices in career choice, accepting more productive work they enjoy less, for the sake of benefitting the worse off (though some incentives would still count as just, because individuals have a prerogative to pursue their own interests, to some reasonable degree).

One response to this critique of incentives was to argue that justice doesn’t apply to personal choices, but only to basic social institutions, e.g. the design of rules of property and contract, taxation and inheritance, family law, funding of education. That’s the “basic structure objection” (to the egalitarian criticism of productive incentives).

Cohen claimed that the basic structure objection faces a dilemma. If the basic structure only includes coercive rules, principles of justice will ignore social norms that are not enforced by the state but which have profound impacts on people’s lives (e.g. norms about gender), while if the basic structure includes norms not codified in law, principles of justice will apply to personal choices too, because that is where such norms reside. Andrew Williams sought to evade Cohen’s dilemma by arguing that the rules of the basic structure need not be coercive but must be public, and that the norms of Cohen’s egalitarian ethos could not achieve the necessary publicity. In order for rules to count as public, it must be clear what they require of us and whether others are complying. The rules of Cohen’s egalitarian ethos allegedly can’t count as public, because verification of compliance would require too much information about individual circumstance.

Williams’s critics have tended to interpret the publicity defence in an uncharitably strict manner — assuming, for example, that in order to resist the critique of incentives we must claim that all duties of justice are conditional on confidence that everyone is complying. In my view, the main weakness of the publicity defence is that its rationale is underdeveloped. Verifiability of whether others are complying is necessary in order to have positive assurance that they are, but what justifies making compliance of others a condition for duties to be binding in the first place? The fact that general compliance with duties of justice would be a good thing doesn’t show that these duties are conditional on general compliance. If people are motivated by reciprocity, conceptions of justice that are too unilateral may be unstable. The stability rationale simply shows that true justice may be infeasible, however, not that duties of justice truly are conditional. What’s needed is an ethical rather than a merely psychological interpretation of reciprocity. The purpose of my paper is to explain the structure of a reciprocity condition on some requirements of justice, and to make the justification for such a condition clearer than it has been in the literature.

The fact that some of our duties of justice are conditional on reciprocity is a consequence of the relational or `second-personal’ nature of social justice, I argue, drawing on Elizabeth Anderson, Stephen Darwall, and Jiwei Ci. The reciprocity condition is fundamentally bilateral, but may take on a proportional form due to uncertainty or because conduct cannot be targeted to specific individuals. Not all duties are conditional on reciprocity, because some duties are owed to third parties, as well as to their primary targets. Our basic moral duties have this multilateral structure. Duties of egalitarian distributive justice are conditional, however. Critics of incentives may admit that some duties are conditional on reciprocity, but insist that exploitation, like racism, is wrong regardless of whether others are engaging in it. Here the paper engages with Seana Shiffrin’s reworking of Cohen’s argument. Some forms of exploitation are unconditionally wrong, I concede, but not the specific form of exploitation at stake in Cohen’s critique of incentives.

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