If desert works, then why?

I liked this summary of the debate on desert from Lindsay Beyerstein.

Wilkinson claims to have found a conflict between common sense morality and Rawlsian theory. If so, this undercuts Rawls' claim to have codified common sense justice. Wilkinson argues that instrumentalism doesn't really explain our intuition that a hard worker deserves her reward, though it may explain our intuition that it would be expeditious to give it to her.

The instrumentalist position needs to be supplemented with a non-metaphysical theory of desert. It turns out that a contractual/procedural theory of desert explains our intuitions just as well. We don't have to argue desert in terms of free will and moral responsibility. Sometimes promises beget desert. Our society wisely promises people that they will be rewarded if they work hard and contribute a lot. So, justice demands that we make good on that promise by rewarding the high achievers. Instrumentalism explains why it is a good idea to make that promise.

I think this is pretty good summary of my argument. And I'm glad to see DeLong copied it on his blog. (Thanks Lindsay!) However, I don't think our intuitions about desert are necessarily rooted in the social practice of promising, although people obviously do deserve things in virtue of promises and contracts. I think that I can deserve thanks from my friend in virtue of having done him a favor, or deserve love in virtue of the love I have given. Anyway, I've claimed that anti-Rawlsian intuitions about desert run deep part in our moral psychology. (I see that Lindsay is involved in experimental moral psychology, so maybe she can test this!) The argument that it's utility promoting, or instrumental to some other end, to treat people as if they actually deserve things raises the question of why this practice is utility promoting or instrumentally useful. My argument is that treating people as if they deserve things promotes utility because the practice aligns itself with their moral self-conception — their reflective judgment that they do deserve things. A practice or set of social principles that failed to respect this self-conception will be confronted with resistance and non-compliance, and will tend to be self-undermining. Now, the way I see it, if a practice based on people's moral self-conception turns out actually to make people better off on the whole, then that just shows that our moral self-conception in this regard is justified, and establishes the moral facts of the matter. If we think we deserve things, and our acting on that conviction tends to make us all better off, then we really do deserve things. That is, then desert claims have real normative teeth. If vulgar consequentialists, like DeLong, buys the pragmatic argument for respecting desert claims, then he shouldn't be skeptical about the existence or authority of desert.

  • When I heard your commentary this morning I thought, “well played Mr. Wilkinson”.

  • I wonder if it’s quite right (expect perhaps as a rhetorical move) to call limits on H1B visas a “subsidy”. People working on trade make several distinctions between ways trade can be limited or distorted and it’s generally thought to be important to make a distinction between subsidies of various sorts (production subsidies, export subsidies, etc.), tariffs, quotas, and other “non-tariff barriers to trade”. Now, in some sense we might be able to re-define all of these as subsidies of one sort or another but I’m not sure that’s actually useful. From an analytical perspective that would be useful if we thought they all more or less had the same sort of effect, but it doesn’t seem that that’s the case. There are reasons, for example, that economists think it’s better for states, if they are going to have barriers to trade, to have tariffs rather than non-tariff barriers of various sorts. (Some of the reasons, but only some, are related to transparency.) Given these sort of concerns I’d want to see more before concluding that it’s useful (except as a rhetorical move) to say that numerical limits on H1B visas are usefully considered to be subsidies. (Perhaps you say more in the actual radio show- I can’t listen to it now so am just going by the printed bits above and in the link.)

    Also, it seems to me that the argument only works if you assume open borders as the base-line. That might be right but it’s certainly not obvious. If we instead took no employment-based immigration as the baseline then we get a completely different answer as to whether this is a subsidy or not- it rather ends up looking like a tax on certain skilled workers for the benefit of others. I don’t think that’s the right baseline, either, but it’s no less implausible as a start and more needs to be done to justify one or the other. In this way immigration restrictions again seems somewhat different from agriculture subsidies to me.

  • Ryan

    “If you dammed up a river, then found you had too little water downstream, and so released a bit of water from the dam, you could think of it as “importing more water.” Or you could think of it, more accurately, as removing the artificial barrier to supply.”

    So you’re for the complete dismantling of all our immigration restrictions and barriers? That is the true liberal position. It makes no sense that we, as Americans, should have sole purview over this extensive territory from merely having the great fortune of being born here.

  • SFer

    This assumes foreign workers want to come to the US for the money. As an American living in the UK, I have friends who’ve been offered jobs in the US but have yet to get a visa. They mostly want to come to the US for the hype of living the American dream but they realize they probably wouldn’t make as much and certainly get less vacation than staying in Europe. The US companies want them not because they are cheap but because they have a better education/experience than currently offered by US schools.

  • Matt, I take your points. Please do keep in mind this is a 2 min radio spot for which I get about 340 words if I read fast. It is not a medium of great analytic nuance. Coercion needs justification, not free movement, so yes open borders are the baseline, but if I make that argument, even cartoonishly, then that’s the whole 2 min.

    But I’m not sure about the point of your comment. I think there is no denying my central point: many middle and upper class Americans’ wages are higher than they would be, and wage inequality is higher than it would be, if the US government did not make it illegal for most workers who would like to come here to come, and for employers who would like to employ those workers to employ them. That’s just a fact. Does it matter evaluatively whether we call the predictably and at least partly intended increase in high-skilled wages a subsidy?

    That said, as an economic matter, subsidies and trade barriers are more or less analytically equivalent, and its pretty common to speak of barriers as subsidies. Labor is one among other factors of production and restricting the supply of foreign labor for sale domestically is no different from restricting the supply of sugar for sale domestically. It pushes up the price for domestic suppliers. Indeed, the barrier is usually intended to have this effect, in which case it just is a subsidy, albeit an indirect one.

  • William Newman

    “its pretty common to speak of barriers as subsidies.”

    I don’t remember ever seeing import restrictions caused subsidies. Tax exemptions are fairly commonly called subsidies, yes. But I hope you won’t imitate that, because it’s sloppy and often a warning of slanted reporting. As you say, you have only so many words, and the effects of supply restrictions can be broadly similar to those of subsidies. But if you want to generalize across the first-order effects of import restrictions and subsidies, a phrase like “propping up wages” (describing those broadly similar effects) is completely accurate and not terribly long.

    (I mostly agree with your moral arguments and policy conclusion. I basically support increasing the number of H1B visas. Given a choice between that tomorrow and nothing tomorrow, I solidly support increasing the number of H1B visas. My only objection is distaste for governmental micromanagement of the labor market when the price system seems likely to do much better: if we are to limit immigration, why not auction off the slots instead of letting Washington decide what specialists are allowed in?)

    I would also disagree with you “that’s just a fact.” It does seem to be a political fact: a lot of the opposition to H1B visas seems to be driven by people’s completely sincere belief in just the analysis you are making. And it’s not a ridiculous analysis. But as a technical matter of economics, mightn’t it be a very serious oversimplification? Imagine applying the same argument to someplace like current Manhattan or Silicon Valley (and internal passports). Under current supply conditions, it seems clear that a lot of skilled workers there get much their value by interacting with others there. So if today we artificially restrict the number of appropriately-skilled people who are allowed to enter, then wages for those who remain will tend to go up — given an infinitesimally small change, considered over the short run. But over the medium run, or for a larger change, the effect could be highly nonlinear.

    Consider a historical thought experiment. Assign all US skilled workers internal passports in 1955. Only ever stamp 10,000 passports to let them into what we now call Silicon Valley. The likely result, I think, is probably not high wages for the lucky 10,000, but the irrelevance of that stamp on their internal passport.

    Imposing milder internal immigration limits later in history would have a less clear and dramatic effect, but I think it’s likely that if we had imposed an 50% reduction to a nearly-fixed ceiling ten years ago, the value of a skilled-work-in-SV stamp in one’s internal passport would be small today, and still falling. Is 50% reduction a reasonable parallel to the medium-term effects of today’s limits on skilled immigration? Can you exclude the possibility that US is to World as Silicon Valley is to US?

  • While I appreciate the rhetorical move, I suspect that increasing the number of these visas would end up increasing income inequality, as the efficiencies created more wealth and more opportunities. Most people will be better off, but the gap between the richest and poorest will go up as the range would be at a higher level.

    Of course, I think that’s a good thing.

  • Gabriel

    William, tariffs are taxes, which you pay directly to the supplier of a good.

    The price of laptops is 10% higher than it would be without a tariff, which means that you’re paying 10% to that company which you otherwise wouldn’t, because there would be cheaper laptops. The same thing would happen if the government just taxed laptops 10% and gave that tax to domestic suppliers.

  • While I’m completely on board with radically increasing the number of H1-B visas granted, I think several of the Marketplace commenters are right to point out that this probably won’t help with income inequality as people often think of it. The real story of runaway inequality over the last decade isn’t so much white collar professionals pulling away from unskilled workers – it’s the power law situation where the very top earners pull further and further away from everyone else. People concerned about income inequality are much more worried about people at the very top just playing at a different level than they are about the gap between plumbers and electrical engineers.

    Now as you’ve argued elsewhere the real reduction in inequality comes from the massive benefit to the immigrants, and I agree that this should swamp other considerations. But that just goes to show that the argument that increasing H1-B grants will decrease domestic income inequality is far from the best argument for the policy. Indeed, it should make us suspicious of motivated cognition.

  • $54123764

    Will said: “…it is apparently morally outrageous to address inequality by actually addressing the mechanisms that cause it — the relation between the supply and demand of skill — if that involves making some foreigners a lot wealthier.”

    Yep. Downright taboo. ‘Us versus them’ is one of the human animal’s most favorite games, and one its most dangerous ones.

  • Hi Will- for some reason I thought the linked bit was just a teaser for a longer piece you actually did. I’m sure you’d have said more if you had time so sorry on that confusion on my part.

    Lots of trade restrictions can be formally represented as subsidies but they behave differently in real life (produce different kinds of distortions or trade diversion, etc.) which is why all the trade literature (at least done by anyone who bothers to actually learn something about trade beyond pure theory!) thinks it’s important to treat them differently and that some forms are better than others. If they were truly completely equivalent that wouldn’t be so.

    Thomas Pogge has a pretty good paper arguing that increased immigration openness is really a pretty bad way to decrease global inequality. I’d quibble with many of his points but I think it’s mostly right. (I don’t often agree with Pogge but think this is one of his better papers.) You can find it several places but perhaps most easily in the 2nd edition of the volume edited by Goodin and Pettit, _Contemporary Political Philosophy: An Anthology_.

    Gabriel- I’m curious why you say tariffs are taxes paid “directly to a supplier”. That’s not how they work unless you’re just saying something unclear. The money from a tariff doesn’t go to the supplier at all. (I’m not sure who you mean by “supplier” here, either.) Importers, who may or may not be manufacturers, pay tariffs. The cost of the tariff may or may not be reflected in the price for various reasons though of course usually it will. But the money from the tariff doesn’t go to the domestic suppliers or anyone like that, at least any more than to all of us. In fact, a scheme like that was tried on a few tariffs (officially “anti-dumping and countervailing duties”) and it was declared to be against WTO rules on no uncertain terms, had to be stopped, and allowed other countries to put in place countervailing duties until the practice ended. This was done because such a plan constituted a non-allowed subsidy. (This is one way to see how subsidies and tariffs can differ greatly in practice.)

  • muirgeo

    The first commentator on the Marketplace blog stated exactly what I was thinking, “His solution for pay disparity between lower class and the middle class is to due away with the middle class.”

    When you say this, “But in recent decades, technical innovation has increased the productivity of more highly-educated workers faster than it has for less-educated workers. These growing inequalities in productivity have helped create growing inequalities in wages.”

    For technical innovation substitute; K-street lobbying innovation and innovations of complex financial products like derivatives, quants and many others.

    For “more highly educated workers” substitute those on Wall Street and those with access to Congress.

    The debt of the average college graduate is increasing while his starting salary is decreasing.

    Since 1975 to the present Wall Streets share of all corporate profits has risen from 10% to 40%. If some one thinks pushing paper from one side of a desk to another side of a desk and making a billion dollar salaries is productive to our economy they need new glasses. It’s simply robbing from the productivity pie and to the obvious determent of the nation and the greater economy. Yes I eft out a lot of nuances of the situation and made some broad generalizations but I think they equalize out what was left out or generalized from the original piece.

    Great pertinent quotes from the recent John Adams miniseries;

    “I fear our revolution will have been in vain if the Virginia Farmer is to be held in hock to a New York Stockjobber who in turn is in hock to a London Banker”

    Thomas Jefferson

    I frown on speculation. It is nothing more then rolling in luxury on the prosperity of others”

    John Adams

  • muirgeo

    Laissez faire economic principles lead to massive inequalities of wealth and I’d say power as well. If you want to be a libertarian I think you have to admit that to people and then explain why they should want society to be set up that way. Trying to explain away the results of these experiments the world has run over and over seems more like defending ideology against it’s obvious real world results.

  • I agree with muirgeo, that laissez faire economic principles lead to inequalities, and that, eventually, it’s best to be honest and explain why this is a good thing.

    But, on the other hand, I think it’s a fair tactic to use one’s opponents’ methods (e.g. erroneous static economic analysis) and stated values (e.g. income equality) and show that their preferred policies (e.g. professional employment protectionism) harm their stated values.

    It might not be true, but it shows them that their positions are incoherent.

    And, that’s a start.