I would like to elaborate on the part of my description of the essence of an economic system having to do with the fairness of distribution of burdens and benefits among deserving people. First and foremost, what it means for people to be deserving, or for burdens and benefits to be divided up fairly, is independent of any particular idea of what constitutes a fair distribution or a deserving person. The notions or meanings of fairness and desert are logically prior to any particular principle that tries to spell out the criteria for what is fair or who is deserving. For example, someone may think it fair for a person to own the apples he picks from a tree with his own labor; someone else may believe those apples rightfully belong to the person whose property the tree is on; someone else may believe the apples should belong to the person who can make the best use of them and not to either of the two other people if those people were to let them rot unused. Although there might be disagreement about who deserves the apples and what the right criteria for desert is, there is no disagreement here about what being deserving means. Disagreement about who has the rights to the apples is not a disagreement about what it is to have rights to the apples, but about what gives someone the rights to the apples. The disagreement is not about what it is to be deserving, but about what constitutes the legitimate grounds for being deserving -- about which theory of desert captures, without exception, all and only those cases that our reflective intuitions would judge as being cases of desert or cases of a just or fair distribution. So although I may have some stated or unconscious and implied leanings at present toward a particular criteria or theories of fairness or desert that could be discredited, that alone should not discredit the idea that an economic system should strive toward a fair distribution of burdens and benefits among deserving people. 

There are a number of criteria by which we judge people to be deserving. Some of these conflict with each other. Some of these conflicts are difficult to resolve, even with effort and reasonable reflection. These are not necessarily meant to be complete lists, but are meant to be useful for illustrating some points.

We often judge a person to be deserving of:

1) the things s/he lays claim to before anyone else does, whether by invention, discovery, or getting to some place or some object first.

2) the things s/he builds, collects, or in general labors to produce.

3) the things given to him/her, traded to him/her, or otherwise voluntarily transferred to him/her by someone who rightfully owned them.

4) those things necessary for life that occur naturally and are abundant enough for all to share without any reasonable controversy (such as air -- at least as this is written).

We judge some labor to be more valuable than others, or more valuable under certain conditions; and, again, we do so with sometimes conflicting criteria:

1) labor that is physically difficult because it takes great strength

2) labor that is physically difficult because it takes great physical endurance

3) labor that is physically difficult because it takes arduous physical perseverance

4) labor that requires relatively greater intelligence

5) labor that requires concentration

6) labor that requires mental perseverance

7) labor that requires any other sort of skill

8) labor that requires any other sort of talent

9) labor that is unpleasant to perform

10) labor that takes a long time or much effort to learn how to do (or, more generally, labor that requires any of these other things to learn how to do).

11) labor that is more productive of greater good by improving the quality or quantity of Goods and Services.

12) labor that requires great risk or great cost

13) labor that relatively few other people are willing to do

14 ) labor that is necessary or important.

15) labor that takes more time.

Any of these criteria can be nullified if they result from artificial or unreasonable contrivance for their application. For example, #15, labor that takes more time only because the worker slows down to an unreasonable pace to make it take more time, is not labor that is therefore more valuable. Or, for example with regard to #4 or #10, if intelligence or much effort is required for certain labor only because these are artificially and unnecessarily used as screening or weeding out (credentialling) devices to keep a labor supply artificially lower than it really needs to be, then they do not increase the real value of the labor.

The standards for judging whether conditions 1 through 15 are met or not are also sometimes open to question. For example, labor that is unpleasant or arduous to most of us or to any one of us may not be to the person performing it. Deciding whose judgment to accept presents a problem, as when a friend gives you a present she easily makes herself but which would not be easy for you or for anyone else to make. It may therefore be far more valuable to you and others than it is to your friend.

In a market economy, labor is simply worth what people are able and willing to pay for it. That may make it valuable -- in terms of what it will be awarded (paid or traded) -- or not very valuable. To some extent market values are based on some of the criteria stated in 1-15 even if the bargaining over a psychologically acceptable wage or price do not mention them (and even if people do not consciously articulate the principles they have in mind) because people will make judgments based on them as to how much they are willing to pay for product or service, particularly if it is not a necessity but is a convenience or luxury, and because people will make judgments based on them as to how much they are willing to work for to provide the service or product. Insofar as a market economy does not take into account the above kinds of methods of judging a fair price or wage, it simply ignores them. In part it does this because it is difficult to try to decide the value of labor on the basis of principles like 1-15 above, not only because there are so many variables, but because different principles may conflict. (For example, labor may be physically difficult but not take much skill or mental effort, and it may be enjoyable or easy to the person doing it but not to many others.⁽¹⁾) And in part it does this because there are mechanisms at work that multiply many times the effects of transactions based on the kinds of criteria in 1-15. 

In part it does this because many people simply think it is a legitimate and optimal way of rewarding labor. [The remainder of this chapter will discuss such claims, but in Chapter 13, where I discuss differences in earnings, I will return to this topic from another consideration.] Noted conservative economist Friedrich Hayek (Published in Il Politico, 1966. Reprinted in Studies in Philosophy, Politics and Economics, 1967), refers to a free-market system of distribution as a "catallaxy" instead of an economy because he argues that "economy" implies an arranged distribution (as by, say, a central government), whereas the "the spontaneous order of the market resulting from the interaction of many... economies is something... fundamentally different." And he goes on to argue that "Rules of just conduct can require the individual to take into account in his decisions only such consequences of his actions as he himself can foresee. The concrete results of the catallaxy for particular people are, however, essentially unpredictable; and since they are not the effect of anyone's design or intentions, it is meaningless to describe the manner in which the market distributed the good things of this world among particular people as just or unjust." And "The essential points of this conception of justice are... that justice can be meaningfully attributed only to human action and not to any state of affairs as such without reference to the question whether it has been, or could have been, deliberately brought about by somebody...." "The concepts of a 'just price', a 'just remuneration' or a 'just distribution of incomes' are of course very old; it deserves notice, however, that in the course of the efforts of two thousand years in which philosophers have speculated about the meaning of these concepts, not a single rule has been discovered which would allow us to determine what is in this sense just in a market order. ...because a just remuneration or distribution has meaning only within an organization whose members act under command in the service of a common system of ends, but can have no meaning whatever in the catallaxy or spontaneous order which can have no such common system of ends." "We might therefore question whether a deliberate choice of the market order as the method for guiding economic activities, with the unpredictable and in a great measure chance incidence of its benefits, is a just decision, but certainly not whether, once we have decided to avail ourselves of the catallaxy for that purpose, the particular results it produces for particular people are just or unjust." "All endeavors to secure a 'just' distribution must thus be directed towards turning the spontaneous order of the market into an organization or, in other words, into a totalitarian order." [By totalitarian, he means governmentally controlled, whether or not the government is a democracy.] 

This is not totally different from Robert Nozick's view [Anarchy, State and Utopia, Robert Nozick, New York: Basic Books, 1974] "There is no central distribution, no person or group entitled to control all the resources, jointly deciding how they are to be doled out. What each person gets, he gets from others who give to him in exchange for something, or as a gift. In a free society, diverse persons control different resources, and new holdings arise out of the voluntary exchanges and actions of persons. There is no more a distributing or distribution of shares than there is a distributing of mates in a society in which persons choose whom they shall marry. The total result is the product of many individual decisions which the different individuals involved are entitled to make." Nozick then goes on to argue that if a society has just rules of acquisition (or original ownership) of things and just rules of transfer of things owned from one person to another, that the dispersal of things will then not likely form a pattern that some theory of just distributions would impose. If people are left to their own devices to fairly exchange or buy whatever they want, new "distributions" of wealth will quickly diverge from a status quo. Nozick believes that a just dispersal of goods is one that comes about from the fair exchange of things people have fairly earned title to -- whatever that dispersal happens to be [with certain safeguards against monopolizing resources built into the rules of acquisition and transfer]; that people are reasonably and justly entitled to what they come by fairly and squarely according to just rules of ownership and transfer of ownership. In short, the means (of fair trade) justify the end (of distribution).

It seems to me that Hayek and Nozick are missing the points of what those who want a market system to include a just (re-)distribution of society's benefits and burdens, are really seeking. First, Hayek states "Though it is widely believed that the conception of an optimal economic policy ... presupposes... maximizing aggregate real social income ... this is in fact not so. An optimal policy in a catallaxy may aim, and ought to aim, at increasing the chances of any member of society taken at random of having a high income, or, what amounts to the same thing, the chance that, whatever his share in total income may be, the real equivalent of this share will be as large as we know how to make it." Thus, Hayek has no difficulty accepting that a catallaxy or free market can have a purpose or policy at which it aims, and at the same time be a spontaneous order generated freely among people. And Nozick believes that there is some notion of fairness in ownership and trade that we can legitimately incorporate into a free market system (1) that will prevent certain kinds of dispersals (such as monopoly) that are not desirable, and (2) that will bring about desirable states of dispersal, though they will not conform to some pre-determined pattern of distribution. 

Hayek and Nozick have some valid points, but they do not invalidate the concern for (re-)distribution of wealth within a(n otherwise) free market economy. In Hayek's terms, there is no reason to believe that a catallaxy with some limitations or boundaries or unimposed operating principles is significantly less a catallaxy, or that if it is significantly less, that it is less in some important or crucial way. To say that a modified or principled catallaxy is not a catallaxy in important ways, or that it does not give the same benefits as a totally unprincipled or purely arbitrary or licentious catallaxy, would require further argument. Of course, a market can become over-regulated, if that means it can have counter-productive regulations or operating principles, whether imposed or spontaneous (i.e., arising from within or as part of the general pervading moral or spiritual values of a society). But it is not clear that even in a catallaxy of the sort Hayek advocates, there cannot be operating principles that govern the individual transactions in ways mutually acceptable to the parties involved, and it is not clear that there cannot be acceptable modifications of the results of many such transactions if everyone agrees such modifications are beneficial. Even on Hayek's (narrow) view of what is beneficial, modifications would be acceptable if they lead to increasing the chances of any member of society of having as large a share of income as we can make it. And Nozick is willing to allow operating or governing principles in individual transactions, just not ones that impose some particular distribution pattern. Further, Nozick, as Locke, realizes there are some outcomes which are not desirable, and the rules involving individual transactions need to prevent those outcomes from occurring.

Further, Hayek seems incorrect when he claims that just distribution has meaning only within an organization with common ends for all members. It seems to me that we ordinarily think of two-party transactions as being fair or unfair just in themselves in a number of ways. One kind of unfairness is knowingly taking advantage of someone's trust when one charges them, say, double the usual price of something and they pay for it out of that trust. This is not totally different from cheating a child by giving him two shiny pieces of metal (dimes) for his one paper dollar. A second is the case of taking advantage of someone's misfortune to charge them a lot more than normal or than what one could get if it were not for the particular unfortunate circumstances. This is basically gouging; as when a mechanic charges a tourist much more to repair his car than he could get from someone with the time to get other estimates and realistic opportunity to get repairs done at a different place.

What Nozick and Hayek seem to me to really be arguing is (1) that as long as no really terrible outcome arises, the market should be allowed to function freely as parties in individual transactions see fit, (2) that society or the government ought not to impose or steer toward some particular good result, though they may regulate to prevent terrible results, and (3) that it is not a limitation of market freedom for parties to have trading principles which personally (or corporately) guide or motivate them in their individual transactions, especially when those principles are not involuntarily forced on them.

If I am correct, neither Nozick nor Hayek would object to the least disturbing possible remedies to market generated systematic exploitation of an arbitrarily (i.e., capricious or morally indefensibly) generated permanently disadvantaged class, should it occur, or to any other egregious conditions which might be generated by seemingly harmless and reasonable principles and transactions considered individually. Further, neither Nozick nor Hayek seem to have objections to individual's or group's being motivated in their transactions by social or moral principles which they freely believe in. In fact, it seems to me that what gives credibility to Nozick's and Hayek's views not to interfere with individual transactions is that many such transactions seem inherently fair or right, simply because often they are guided by principles such as 1-15 above.

And although Hayek argues that no single rule has been discovered which would point out or generate "just prices", "just remunerations", or "just distributions of income", that does not entail that we cannot recognize unjust prices, unjust remunerations, or unjust distributions of income. For example, although 1-15 above are not necessarily complete and although in some cases they may conflict, it seems to me that we could say a fair wage (or share of economic benefit) is one that is reasonably supported by at least one principle on a complete list of that sort. John Stuart Mill's eloquent condemnation of exploitation through inherited wealth by those who do no work at all is essentially the condemnation of a particular instance of distribution of wealth based on no moral merit or morally reasonable justification at all. Mill, in his Principles of Political Economy, is writing about capitalism of the mid-nineteenth century, and the "communism" he is discussing is not necessarily Marx's model, and is most likely purely an economic model, not the repressive, brutal, centrally controlled, and centrally controlling, bureaucratic communism of the 20th century Soviet Union: 

"If ... the choice were to be made between Communism with all its [problems], and the present state of society with all its sufferings and injustices; if the institution of private property necessarily carried with it as a consequence, that the produce of labour should be apportioned as we now see it, almost in an inverse ratio to the labour --the largest portions to those who have never worked at all, the next largest to those whose work is almost nominal, and so in a descending scale, the remuneration dwindling as the work grows harder and more disagreeable, until the most fatiguing and exhausting bodily labour cannot count with certainty on being able to earn even the necessaries of life; if this or Communism were the alternatives, all the difficulties, great or small, of Communism would be as dust in the balance."

So the question then is what sorts of bad situations or consequences does a free market economy tend to generate, and how can those things be most acceptably and reasonably prevented without damaging the good consequences of the market, if that is possible. If it is not possible to prevent or ameliorate the worst consequences of the market without losing the benefits of the market, than Hayek's question of whether to choose the market (catallaxy) at all as opposed to some other economic system becomes relevant.

Hayek's notion of a catallaxy not to be tampered with in terms of overall result seems to me to make sense only in circumstances where individuals are in some sense economically independent of each other, whereby someone's or some group's increased prosperity does not take away from another's status quo. Hence, if you and I begin making school lunches for each other in some profitable way, as explained earlier (e.g., where I bring sandwiches and you bring desserts and we swap a sandwich for a dessert), there is no reason for us to have to make lunches for other students or colleagues. We are not taking anything from them by our arrangement. But if our arrangement infringes on other people's ability to make their own lunches, then we have obligations to remedy that. One can morally justify increased benefits that are not at someone else's expense, not benefits which result in other people's involuntary expense. A distinction has to be made between catallaxic associations that cause no harm to others outside the relationship, and those that do cause such harm. (And by harm, I do not mean simply becoming relatively wealthier than someone else in a way that makes him feel envious or inferior. I mean actually preventing his being able to improve his circumstances.) Modern industrial society is interdependent in many ways. And both kinds of catallaxic arrangements may occur. 

What I wish to do now is to consider the issue of fairness of opportunity in regard to a market economy that has widespread interdependence, for one of the major criticisms of the market is that it does not always lead to fair opportunities. The following are the basic premises I will be assuming:

1) People who contribute to society's or to another's well-being or improvement deserve, without some good reason to the contrary, to get back from society benefits in proportion to what they actually do, or try to, contribute. (This is in accord with what would be a complete set of principles of the sort listed in 1-15 above.)

2) In proportion to the necessity and importance of being part of an economic system, the economic system ought to permit and provide opportunity to all deserving individuals to participate in as substantial a way as their ability permits.

3) People should be assisted as necessary to be able to reasonably contribute to society in a manner consistent with their potential, and expected to do so as they become more capable. (E.g., children going to school, the unemployed being re-trained.)

4) People who cannot contribute (much) should be treated in a humanitarian way, commensurate with society's ability to do so, and to the extent qualities other than current contributions merit (e.g., convicted felons serving prison sentences would not have the right to as much "free" benefit as incapacitated people who had been active, unselfish community volunteers, etc.).

5) There should be no unnecessary or artificial barriers to being able to make a contribution to society or to being able to receive a reasonable distribution from it. 

6) Rewards should not be permitted for demonstrably unfair or unreasonable practices. Reasonable, justifiable, procedures should be established to expediently determine the fairness and reasonableness of new and questionable practices ahead of time.

7) Attempts at improving benefits and decreasing burdens should be at least as important as trying to maintain the status quo of burdens and benefits.

That some "liberals" want equality of results, regardless of effort or ability, may be true; there are people who believe, not without some reason, that circumstances, character, and ability are outside of everyone's control, and that results which depend on these things, are therefore arbitrary and cannot or should not be a legitimate basis for morally justifying differences they foster or create. Certainly there are some circumstances that contribute to an individual's success which are more a matter of luck than of anything he in some sense deserves or earns. For example, the fact Jack Nicklaus could make far more money than Bobby Jones just because television existed in his time and not in Jones', and because there were far more golf tournaments in Nicklaus' era, does not mean Jack Nicklaus was in some way more deserving than Bobby Jones. Even a strenuous work ethic in some cases may not make someone more deserving, if, say, it is compulsive or at the expense of neglecting one's health or one's family.

And some "liberals" may want equality of results at the present time because they believe until a reasonable period of time passes where results are forcibly equalized, there will not truly be equal opportunities for all. These people see equality of results as a means for bringing about equality of opportunity, not as an end to be sought in itself, and not as a position to be maintained once everyone truly does have equality of opportunity. Part of that argument is that there need to be role models to inspire children of disadvantaged groups, and that others as well need to see that, given a little help under current supposed unequal circumstances, people who were thought incapable under any circumstance of success in certain jobs actually can be quite successful. And part of that argument is that power bases need to be distributed among some members of currently disadvantaged groups if other members are to be able to unprejudicially earn what they deserve, assuming (what is not always true) that members of disadvantaged groups are less likely to be prejudiced against other members of their "own" group. 

However, a great many people believe that although many things are beyond an individual's control, all normally endowed people have sufficient attributes to succeed in a modern democratic, market economy if they are given a fair starting chance under equal competitive conditions. And many further believe that most people are given a fair starting chance under such conditions in today's modern democracies. Hence, these people believe that an appeal to fairness no longer justifies tampering with the system's initial opportunities, competitive conditions, or results.

I will leave it to others to debate and find evidence about how fair the starting opportunities or competitive conditions really are or how much success is determined by circumstances within a normal individual's control. Instead I want to examine the idea that there are only two issues involved in fairness: (1) equality of initial opportunity and equal competitive conditions, and (2) equality of results. I will try to show that there is a third aspect involved, and that it is this third aspect where concern should be focused.

First, however, let me point out that rare isolated and individual examples of success by the "disadvantaged" or of failure by the "advantaged" do not show there is no problem. Such examples only show that unfairness can sometimes be overcome; not that there is not unfairness. What we seek is general fairness, not just the occasional, and statistically unlikely, triumph of extreme luck, ability, or effort against generally unfair odds.

What I wish to argue is that equal initial starting places and equal opportunities in one sense do not necessarily yield equal or fair opportunities in another, very important, sense. And we see evidence of this in many ways. The sense of fairness that I want to discuss is the sense that the particular outcome of a competition is not obviously overwhelmingly, or highly probably, predetermined and readily predictable, particularly when important matters rest artificially on that outcome⁽²⁾. Let me give some examples. 

(1) Carl Lewis is the world's fastest human. I am not a runner, and I am not as young as Mr. Lewis, nor in as good athletic condition. In a sense, if he and I were to run a 100 meter race, if we start together, the race will not be fair. In another sense, of course it would be. I have had as much opportunity to become a good runner as he has. I could have trained and sought good coaching, etc. And I could compete against him with as much opportunity as all those who lose, quite fairly, to him today. Not beating him or not being able to beat him is not what makes our race unfair in the sense I am concerned about; it is not having any reasonable chance of beating him that would make such a race unfair. If he and I were both five years old and had never raced each other or been timed, and we ran a race where he showed he could beat me by 30 feet over a 100 yard distance, that would be a fair race. But once we know he is that much faster than I, the next race between us would not be fair (and it would not be fair to force me to run against him) in the sense I am discussing, unless I am given a handicap. The point of a handicap in sports is to give a player known to have much less skill the chance to beat the obviously better player. Handicaps are thought to make contests more fair in this sense, not less. Handicaps are not fair when one player does not have an obvious advantage (whether earned or not) over another for the particular contest. And the fact a player or team wins a number of games or championships in succession does not by itself show them to be invincible, and does not by itself call for a rules change or a handicap system to be instituted.

(2) If a normal six year old is made to compete in math against a normal ten year old, other things being equal, generally it will not be a fair contest because the six year old has almost no chance of winning. It does not matter that they are asked the same questions or that they each have pencil and paper, similar calculators, or whatever.

(3) Suppose that we are choosing tug-of-war teams, 15 people on a side. Suppose that we want to have teams that are fairly chosen. Consider the following possible ways of choosing teams, any of which might be considered fair because both sides have equal starting places and equal opportunities for getting the best players. (1) Each team is chosen by lot (blind drawing), one player at a time. That gives each team equal opportunity to have the best participants. (2) Team captains are appointed who are equally good, and they get to choose the players they want. (3) Teams are chosen by either of the above methods, with the proviso that they have the same number of players and the same amount of total weight of players. Any of these things are fair in the sense of initial opportunities and similar circumstances. But any of these methods can still lead to totally mismatched teams, which, once that is known, then makes any further contest between them unfair. 

(4) Suppose we play Monopoly, starting even, and one of us wins. Would it be fair to start the next game simply continuing from the resulting conditions of the first game, but giving all the losers of the first game a few hundred dollars re-start-up money? Probably not. Each new game needs to be started evenly, not just the first game.

Notice, it is not the fact that one person or team might always win or eke out a victory that makes the contests unfair in the sense I am discussing (so equality of result is not at issue). Nor is it the initial starting point or the playing conditions of the competition that are considered unequal (so equality of opportunity in that sense are not at issue). What is unfair is that in each of these contests, it is obvious one side does not any longer have a "fighting chance" or any reasonable chance to win. It may be their own fault; it may not be. Either way, but particularly when it is not their fault, the contest is no longer fair in a sense we all understand and in a sense that we all think is important. The opposing sides are so obviously mismatched or lopsided in capability that there is "no contest" between them; the results are essentially easily predictable.

Statistical results enter into this only in the sense of being one indicator that there is an unfair advantage. Suppose, for example, that after the first two hundred World Series were played, it turned out that the team with the "home field advantage" always won. Suppose no one could prove the cause of that but that nevertheless, it always happened. I suspect that at some point, we would begin to think the way the Series was played was simply unfair, because we would start to see that it was virtually impossible for the "visiting team" to win. Of course, that has not happened, so the home field advantage-- which is, as its name indicates, recognized as an advantage-- is not seen to be an unfair advantage.

In regard to democratic, market economics then, what ought to be sought is the same thing as in each of these examples, not equality of opportunity for its own sake, nor (statistical) equality of result for its own sake, but a reasonable opportunity to be able to succeed, and a reasonably equal possibility to succeed. Equal initial opportunity only gives an a priori reason to assume an equal possibility of winning; it may not be a reason that stands up -- as in once the tug-of-war sides are actually determined and it turns out that one side is simply much too strong for the other side. Unequal results over a long run do not prove unfair possibilities (illustrated also by my "ping pong" case later), but they gives grounds for suspicion. Likewise, equality of results, obtained through competition, shows equal chances of winning but does not show fairness, if there is handicapping and if the handicap on the otherwise better competitor might be unfair or unreasonable.

First, in sports, with the exception of certain All-Star games, (or emergency circumstances like the earthquake during the Oakland-San Francisco World Series) the rules are not changed during any given season or game. The rules are changed, when necessary, for future seasons. For example, when Dean Smith's teams perfected the "four corners" stall, shot clocks were not instituted for the second half of the season or for any games in the first season the stall was shown to be so effective, even though the "four-corners" offense was not liked by fans other than North Carolina's.

Second, no one says a particular game or series is unfair just because a really good team is playing a really poor team that season. This is even when the odds are overwhelmingly against the poorer team's winning. Especially during expansion years, some teams are so pitiful that they have almost no chance, though perhaps some hope, of winning against a strong, established team; but few feel that is unfair.

Third, professional major league sports have policies between seasons (such as drafts, trading rules, etc.) that try to balance the opportunities for the following season's being a "fair new start" so that one team's winning a championship does not give it a further advantage for the following season. In fact, most drafts work as an advantage in indirect proportion to the teams' order of finish.

In short, the emphasis seems in sports not to be on the fairness (in the above sense of balance or reasonable or equal chance of winning) of a particular game so much as it does on the fairness of a season or the fairness of a season in the somewhat near future. (Fairness in a particular contest is important, of course, but in the sense of both teams being accountable to the same rules, the officials being honest and competent and calling plays impartially.)

Of course, in economics, there are not distinct seasons. And a person or company does not get an advantage for the following year by doing poorly in the preceding one. Nor in some cases should they. (In sports also probably something drastic would happen if a team and its management never really tried to win and did not seem to care about winning and year after year did nothing to take advantage of each additional opportunity for improvement it was given. If its fans did not quit showing up and its lack of revenues make it fold, the league might still throw it out as an embarrassment, let alone an economic drain.)

However, I think something of the notion of a period of time, rather than any given competitive event, also holds in economics, and in a market society. For example, we tend to think it wrong for the economic sins of the fathers to be visited on the sons (though there are mixed feelings about visiting the economic good fortunes of the fathers on the sons), meaning that we think that children should have opportunities of certain sorts (e.g., education, community recreational and social activities, etc.) even if their parents are not in a position to provide them, and that no one's economic fate should be sealed for the worst at birth just because they may not be born with extraordinary talent or extraordinary luck. We also think that people should have opportunities during their adult lifetime to improve themselves and their economic lot, especially when they have the potential to do so. Finally, there are laws against monopolies because they are are viewed with suspicion even when they have fairly earned their dominant market position. The concern is not that someone achieves a dominant share of a market (as long as they do it honestly) but that domination does not perpetuate itself just because it was once achieved. Domination from time period to time period has to be, in a sense, re-earned each time, not just accrued because of the perks attending power. The ideas, whether right or wrong (and they seem to me to be empirical questions), are that in business, as in sports, (1) competition (at least fair, non-cutthroat competition) gives better productivity, and (2) that competition is enhanced by the reasonable belief one can win, or can at least improve one's position over a period of time. And the view seems to be that society will be better off over time if even a business that is clearly superior enough to dominate a market, is still forced to face some sort of balanced competition. Insofar as that is true or reasonable, then it is in society's interest to try to be sure business is to that extent competitive, even if certain advantages have to be given to those who keep getting beat.

Society's being sure that business is competitive does not necessarily mean society has to bestow any special advantages, however. Experience, even the experience of defeat, is sometimes a great teacher. We have all seen a pitcher strike out a batter in a crucial instance only to see that batter hit a home run off the pitcher the next time up -- some of that is just learning from previous experience. When I was in high school I learned to play ping pong at a neighbor's by playing him over and over again. He was pretty good, and our first few games were 21-0. But our points started lasting a bit longer, and eventually I would win a few points during a game; then more; until finally I could beat him at least half the time. I did not need some special help or advantage in order to become able to beat him; I just needed some experience playing against him or someone else who was fairly good. And I felt that all along. Even when I was being shut out, I felt I would someday be able to beat him. I did not feel permanently disadvantaged nor that I would never have a reasonable chance to win.

I want to return to professional American sports because the kinds of advantages given each year to losing teams strikes me as interesting. First, in a sense, nothing is taken away from the winning teams. They do not have to give up their best players to the poorer teams. They do not have to give up managers. They do not have to play a harder schedule, etc. Instead, they are rewarded with the choice of new players -- just not the initial choices (unless they have traded for initial choices). In other words, they are not deprived of anything, and they are even helped; they are simply not helped as much as those who need help to achieve balanced competition. The concept is to boost everyone but to boost more those who need more help. No team suffers in the absolute sense, just in the relative sense as each team is helped to improve to a higher level. All teams perhaps benefit, and benefit fairly, from this. 

(It is perhaps a somewhat ironic application, in one of the most capitalistic, achievement-oriented, merit-driven, and perhaps "decadent" enterprises --professional sports in America-- of the Marxian principle: "From each according to his abilities to each according to his needs." Perhaps it was equaled only by the opposing irony that in athletics in the supposedly egalitarian Soviet Union, the emphasis was on building superior teams that dominated their sport. Professional sports leagues in America try to evade or restrain free enterprise among rich teams and talented players in order to prevent the most talented from forming dominant teams, while sports in Communist countries seems to eschew socialist, egalitarian principles in order to favor talented athletes and assemble dominant teams. Strict, simplistic social and economic ideologies are not always exemplified by a country's major institutions.)

Further, each team is helped in a way that requires understanding of the sport, and playing or managerial skill, in order to take advantage of the opportunity. The opportunity is intrinsically connected to some ability in the sport, not an advantage that automatically counteracts incompetence in it. Management still has to be able to pick and mold talent to best help their team. It is not that they are given an automatic advantage in the next season, by say, starting every game with a scoring advantage or getting to play more players or adhere to fewer rules, or some such. Past champions do not have to bench their starters sooner or make them play with one arm tied behind their backs, etc. The advantage is an opportunity advantage, not a specific performance or scoring advantage. (Except in rule changes of certain sorts and except in things like golf handicap play, which I will get to in a moment.) 

Finally, everyone understands that the point of the whole enterprise is to help everyone benefit by having the most competitive and best league available. It helps because it has more fan appeal, but it also helps because competitive athletes tend not only to want to win, but to win against the best that can be thrown against them. That makes performances better and victories worth a great deal more.

In the exceptions mentioned above-- rule changes, and also golf handicaps-- something different is going on. In golf handicapping, what you are doing is conceding the outcome of the normal game of golf and are playing a slightly different game. By having handicapping, you are saying in effect "I know you can beat me at straight golf, so let's not play straight golf; let us play golf that gives me an advantage in certain ways or on certain holes, and then let me see whether you can beat me at that game also." Or one could ask to play match play golf instead of medal play golf. Those are two different games, though they may look the same. In match play, you count the number of holes you win, not the total number of strokes for the round. Match play might allow an inconsistent "streaky" player to beat a steady player he might never be able to beat in medal play. When it is played for that purpose, it is saying, "There is no point in playing medal play golf against you; I concede that game (or that version of the game) to you; that is not a fair competition because you will win hands down. Let's play golf with this other way of deciding victory and see whether you can win that way (as easily). Let us make more of a contest out of it."

When the rules of a sport are changed, as when the NCAA basketball program added a shot clock, or a football league moves the goalposts or changes the position of the hash marks, or baseball modifies the "balk" rule, that might be for a number of reasons, and it might include reasons that actually penalize a certain player or team in a certain way. Some rule changes are simply for increasing fan appeal and have nothing to do with giving one team a visible edge over another. Moving the goal posts back in football and changing the spot of the ball on a missed field goal was done in order to make defense more meaningful and prevent teams from advantageously attempting field goals they had little chance of making. Although a few teams at the time had more accurate long range kickers than others, other teams were fast catching up in this regard, and the rule change did not harm any team unduly. However, the NCAA basketball shot clock was a different story, as was the change in hash marks, and the balk rule. The balk rule in baseball was most recently changed when one pitcher figured out a move within the old rule that let him pick off runners on first base almost at will. That gave him a competitive edge as a result of his own study and practice. It was decided, however, during the off-season that the advantage to him, and to any other pitcher who could learn the move, was unfair to base runners, or did not allow the excitement fans wanted in base running and in attempting steals. So the rule was changed even though it deprived this player of an ability he had developed. Similarly, when the shot clock was installed during all but the last few minutes of a college basketball game, that evened up the competition at the expense of North Carolina which had perfected the stall and could stall at will for most of a game once they had built up any kind of lead at all. The hash mark rule change in football (and the illegal-downfield-bump rule) opened up offensive football more than it had been, and arguably harmed those teams that had successfully been designed, constructed, and coached to take advantage of the previous rules. These were rule changes that, though they made the game more interesting for fans and though they, as in the balk rule, made the rules of the game better capture the intended spirit of the game, still penalized players who had used their skills to take advantage of the rules as they had been stated. Such actions, however, are rare in sports, and they are usually only undertaken under one or more of the following conditions: (1) to make the playing of the game more like it seems it is "supposed" to be -- i.e., close an unanticipated "loophole" in the rules, (2) save the game from losing substantial fan interest, or generate substantially more fan interest, (3) remove some special, peculiar, especially non-athletic or seemingly so unfair advantage (such as drug induced strength or reflex) that a team or player has which promises to negate the opportunity for years to come of any other player or team to win. I would say all of these fall under the general idea of saying the previous rules were for a game that was either not interesting enough on its own or not competitive enough to be interesting, so that it needs to be given up for a similar game but one which is more interesting or more "fairly" competitively balanced.

Much of all this can be transferred to economics and business. (1) What society needs is for all individuals to make the best reasonable contribution they can and to have realistic opportunities for successfully contributing to the reasonable extent of their potential, and to be compensated commensurately. Although someone might temporarily benefit by another's failure, the more people can contribute to society, the more there is for each of us to share. Failure only decreases the pie, even if someone benefits from a particular failure by getting a bigger share himself. What is more desirable is for everyone to enlarge the pie as much as possible and get a fair share of that larger pie. So in that sense, the more people and companies that are economically successful, the more everyone benefits, just as in sports, the more competitive a field or league is, generally, the better it is for everyone playing.

(2) Economic policy should aim at improving the most those who could benefit the most from help, while also helping, or at least not taking anything away from, those who do not need much help to reach their potential.

(3) Help needs to be administered in the form of real opportunities to improve in the future, not in the form of automatic success in the present with unfair assistance. No one should be deprived of a fair advantage he has earned, but that advantage does not need to carry over indefinitely into the future. For example, an important minority company that, through no fault of their own, does not have the knowledge or expertise to compete with a larger company (that has plenty of other work available it could more helpfully be doing) could be given an opportunity to gain that knowledge, but should not be awarded a contract (unless it is part of the teaching experience) just on the basis of being disadvantaged. And the help that is given needs to be real help, not just a priori or seeming help. The methods need to be demonstrably helpful, even if they do not help in every case; or it needs to be proved that there is insufficient potential for any method to be helpful -- that the company just is not fit, and cannot reasonably be helped to become fit, to survive in that endeavor.

One form of help --analogous to professional sports drafts-- might be to require, or devise attractive incentives to encourage, college graduates to spend a year or two with a "disadvantaged" but viable (not hopeless) company in their field, so that those graduates learn from the experience of the people in the company and bring enthusiasm, newer ideas, and different contacts to the company.

In something like promotions involving exams, those believed to be unfairly disadvantaged could be given special tutoring or given extra training, but they should still have to score the best on the exam (or whatever the criteria used) in order to win the promotion. They can be given additional opportunity to earn success, not simply given success.

(4) If there are limited resources or benefits that have to be competed for by more people than can have them, then other things being equal (such as the productivity with which each might utilize them), what is essential, in terms of fairness, is that each competitor has a realistic opportunity to succeed on the merits of his relevant potential. If there are arbitrary or unfair obstacles, there needs to be reasonable assistance to overcome those obstacles. If the starting line is not equal, the course needs to make up for the inequality, so that the person with the best relevant qualities, not the person with the best accidental or irrelevant circumstances, has a good chance of winning. And, if the lanes of the course are unequal in length or difficulty, the start (or finish) needs to be staggered to make it equal. It is not the starting line, but the whole course, that needs to be fair. And the test for a fair course is not that the initially disadvantaged person wins. There are other ways to determine the fairness of a course or the fairness of anything. These are open-ended, requiring insight to discover, and requiring logical evidence and judgment to evaluate.

(5) Achievement in one area should not, by itself, be grounds for advantage in an unrelated field. A good student should not be assumed to be a good teacher or businessman; a successful businessman should not be assumed to be a good board of education member; a successful engineer should not be assumed to be a good museum board member; a successful football player or businessman should not be assumed to be a successful public official. Unrelated fields should be like new seasons, open to fresh competition with fresh opportunities.

(6) The rules of business and governmental policy need to be fair and to promote the "spirit" of what an economic system should be about. Rules should not be changed lightly or arbitrarily. Whenever possible rule changes should not give an advantage to one group or another in a given business unless a company has obviously violated the spirit of fair business practice and gained an unseemly or unfair advantage that ought to be taken away.

The one difference between sports and economics, however, is that competition is crucial to sports; and there have to be contest losers (though all can gain financially and socially, etc.). For sports to be successful as a business there have to be contest winners and losers. Economics not only does not require losers, but it is ill-served by wasted or unfairly rewarded labor, which is what economic loss tends to be. Competition in economics is only a means to greater efficiency and productivity of benefits and reduction of burdens, not a goal or an end in itself. Hence, the form of societal assistance to the disadvantage outlined above, should not so much be to foster competition (especially where competition will produce wasted labor or wasted talent), but to help people find a fair and successful niche in the economic system, a niche where they can contribute successfully to society and be rewarded from society (in trade) for that contribution.

Any rule change that affects style of play will always affect the records of different kinds of teams differently, favoring some and disfavoring others. So that although rule changes are formal and "universalyzable" in Kant's sense (which Hayek finds important), they are not without consequence for particular teams, at least in the near future. Presumably such rule changes are made over the protests of those owners who would be immediately hurt by such changes and are pushed through by those owners who believe they would most immediately benefit. All might see merit in the rule changes for the fans or for the "game" but some might want to postpone instituting such merit until they have had better opportunity to first deservedly earn what they could from the kinds of teams and strategies they have worked hard to develop. Any time a rule change of this sort is contemplated, relative team success will be effected no matter how the rule is decided. So there is no neutral position possible.

Also economics is different from sports in that it seems far more complicated. It is relatively easy to fine-tune the rules of sports to get them to conform to some idealization of the game or simply to get more fans interested by bringing about parity through formal draft procedures, etc. The economy seems much more difficult to manipulate to get desired and desirable outcomes without simply having to adjust those outcomes after they occur under the existing rules and conditions. (And if economics could be formally fine-tuned to make dispersals come out more optimally, those who would be relatively hurt by such new dispersals would find the new rules as "unjust" as they now find forced re-distribution of their earnings. There are no value-neutral positions when you contemplate whether or not make changes you know will have different consequences.)

Most importantly, sports, no matter how seriously taken by some people, are simply a game, and one season's being taken advantage of by someone who finds a loophole in the rules he can use to his favor all season long, or who develops a brilliant strategy that almost always insures victory, is not a matter of terrible or ongoing importance in the way economics is. Victories (or losses) in one season in sports do not necessarily enhance (or impede) success the next season or in the season after that. Franchises can be "turned around" rather quickly with the right personnel or strategy changes. But economic conditions tend to promote and reinforce themselves, for better or for worse. Although, of course there are periodic dramatic tales of reversals of fortune, for the most part in a large, impersonal, free market economic system, poor people will stay poor and the wealthy will maintain or increase their wealth. Not redistributing wealth, or not creating new opportunities for less wealthy to attain more wealth, in some cases could be permanently devastating to some people in a way that their favorite team's losing all their games for one or two seasons could not begin to rival.

This is not to say that all re-distribution plans are necessarily fair or optimal or desirable, nor that the market economy or catallaxy does not have any aspects without merit. And there may be some re-distribution plans which do not distort some valuable particular free-market aspects as much as other plans that may be less desirable and less effective. 

For example, in one city in the country one group is trying an interesting experimental program whereby people who do volunteer work are given credit for the amount of service hours they put in. This then will allow them to receive volunteer services if and when they need it for that same amount of hours. Many of these people were already doing volunteer work anyway, so this was not so much a recruiting program as a rewarding program; though it may have recruiting benefits for other "volunteers". It makes volunteerism into a kind of large scale group barter system where barter takes place (1) over time, instead of in simultaneous exchanges, and (2) among a number of people, so that the services you give one person are not in exchange for that person's services in return, but a third party's service who appreciates what you did for the second party, and who, in turn, will be "paid" by a subsequent party.

There are two concerns raised by the organizers: (1) that the credits may not be redeemable in the future because there are not (enough) volunteers to make them good then, and (2) people that move to a different city will not be able to use them there because the system is only local.

This strikes me as an interesting "economic system" experiment; and indeed, words like second economy or subsidiary economy were used to describe it. I consider it an economic system because it meets my idea of people working together or pooling resources in order to distribute burdens and benefits in a way that is fair and allows every individual to receive more than they can provide for themselves. 

The most salient feature is that all volunteer work, regardless of what it is, is treated equally; only amount of hours put in counts, and all hours are rewarded by services in return for the same amount of hours, regardless of what those services are. There is no determination that some kind of hours of labor are worth more than some other kind of hours of labor -- no determination that some labor is worth more, in the sense of deserving more credit for it, than other labor, even if one kind of labor may affect more people or do more good (in whatever way "more" good might be determined).

Now, one solution to the question of redemption of credit -- whether future redemption or moving-away redemption would be to allow credits to be transferable, particularly to allow credits to be transferable for money (that is, sold). So that someone who moves or who does not want to wait till they need services, could redeem their credits for money and use that however they want. This would be like having third parties pay for volunteer work; thus buying volunteer work for the money. This may not be an acceptable solution for two reasons, however: it defeats the spirit of in-kind trading that is meant to allow help for people who have actually helped others -- not just people who have the money to buy help and who may not have ever helped anyone themself; and it essentially turns volunteerism into simply another job in a way, so that it is no longer strictly volunteerism. It will just be that the organizers do not themselves pay their volunteers in terms of money. If money is to be had, it must be received from a third party. But organizers have a choice to make about the transferability of credits. They may want to make them non-transferable at all, or they may want to allow them to be transferred only to family or to needy people the volunteer designates, or not for money. At any rate, this is one kind of possible economic experiment that is independent of communism, socialism, capitalism, etc. but which is simply a way to try to effectively employ and compensate some labor and resources.

1. A Federal Express television commercial had an interesting theme. Two employees of some company are discussing work in the bathroom unknowingly being overheard by their boss. One is terribly worried because he has more packages to ship than he can handle. His co-worker tells him about the FedEx "point, click, and ship" software that can do the work in a flash. He brags it has made him so productive that he has been able to sneak time off for long lunches, golf, and other sorts of leisure. The interesting aspect of this ad is that not only does the boss become angry at this person, but we expect and accept such anger. Yet this is the person who is most productive. Apparently the accepted anger is that he is not being as productive as he could be. Still it seems peculiar in a way that we think it justified for a boss to be angry at the employee who is so productive he produces leisure time for himself that his boss never even noticed.  (Return to text.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2. I say "rest artificially" on an outcome to distinguish between the following kinds of cases. If the only way one can eat is to catch one's food by running after it, and he can catch food, but I cannot, that is not an artificial consequence of his greater speed than mine. But if there was ample food, but someone, with the power to enforce his will, decides it will only go to those who can win races, then Lewis's eating and my starving rest artificially on his being the faster of us. (Return to text.)