A hat tip to Kanchan Bandyopadhyay for this piece entitled “Everybody wants fair play – shame we can’t agree what it is” by Tim Harford – Undercover Economist fame. It discusses what is fair with regard to the tax burden and the distribution of income. In the light of recent tax changes in NZ it is an interesting read. Harvard economist Robert Nozick, uses the famous “Wilt Chamberlain” thought experiment.
Imagine, said Nozick, a “fair” distribution of income. After the government somehow imposes that distribution, then imagine that a million people are willing to pay 25 cents each to see basketball games featuring Wilt Chamberlain, a star of the day. Each is now 25 cents poorer and Chamberlain is a quarter of a million dollars richer. Everyone has been made happier by this voluntary set of transactions. How, then, can we say that the original distribution was “fair” and the new distribution is “unfair”? Leaning on this logic, Nozick argued that fairness must be more a matter of fair processes rather than fair shares.
Click here for the full article.