The Evasion of Equity
Economics textbooks often speak of the “efficiency-equity trade-off.” The definition of efficiency is fairly clear. But what exactly is “equity”?
When cornered, most economists say that equity is a synonym for “fairness” or “distributive justice.” In practice, however, most economists use the word interchangeably with “equality.” Why then don’t textbooks simply speak of the efficiency-equality trade-off, and leave justice to the philosophers?
The ugly truth, in my view, is that economic educators are being deliberately evasive. They’re trying to…
1. Do ethical and political philosophy by stealth. When economists talk about “equity,” they sound normative. If anyone actually asks for moral arguments, however, economists can backpedal and claim that they’re making purely descriptive claims about the trade-off between efficiency and equality.
2. Embrace conventional left-wing moral values by stealth. When economists equivocate between “equity” and equality, they create the impression that equality is the Only Moral Value. If anyone objects, however, economists can backpedal and claim that they’re merely saying that there’s a trade-off between efficiency and Any Moral Value.
So what should economic educators do instead?
1. Replace the vaguely normative concept of “equity” with unequivocally normative concepts such as “justice,” “distributive justice,” or simply “morality.”
2. Acknowledge that there is a lively debate in philosophy about the nature of justice, distributive justice, morality, etc.
3. Identify common moral views, and discuss how each of these views implies a trade-off between efficiency and morality. Egalitarians favor more equality than efficiency recommends. Libertarians favor more liberty than efficiency recommends. Meritocrats favor more rewards and punishments than efficiency recommends. Civil libertarians favor freer speech than efficiency recommends. And so on.
4. If you have worthwhile moral arguments, state them openly and clearly. Otherwise admit the limits of your expertise.