[Miller, David (1993), Stuck with second best, The Times Literary Supplement, Jan. 8, no. 4684, p. 22-22]

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Stuck with second best

[start of page 22]


Jon Elster
How institutions allocate scarce goods and necessary burdens
283pp. Cambridge University Press. 27.95.
0 521 43303 7

If a health service has fewer available donors than patients needing kidney transplants, how should it select the people who will receive kidneys? If a firm has to lay off workers in a recession, should it keep the longest- serving employees, or those who are most productive regardless of seniority? When college places are scarce, should admissions officers allocate them strictly according to academic criteria, or may they give weight to the sex or the ethnicity of the applicant? These are all problems of local justice as Jon Elster understands that idea. Such problems arise whenever an institution has to allocate a benefit (like a place at college) for which demand exceeds supply, or to impose a selective burden (like military service). What principle should be used in each case, and how should the principle be translated into a workable procedure?

These are important issues for all of us. As Elster remarks, "one could write the fictional biography of a typical citizen, to depict his life as shaped by successive encounters with institutions that have the power to accord or deny him the scarce goods that he seeks", some of these encounters literally deciding matters of life or death. Yet the problems they raise are intractable. One of the main messages of this book, which is full of illuminating analyses of concrete cases, is that we always have to choose between second-best solutions. Why is this?

One reason lies in the unavoidable divergence of principle and procedure. We want public housing to go to the families who are most in need, let us say. To begin with, an official is authorized to make a judgment in each individual case. But this lays him open to charges of bias or arbitrariness, so a scheme is devised which gives families points for parental income, numbers of children and so forth. As new relevant factors come to light, the scheme gets increasingly complex, more time-consuming to operate, and more off-putting to potential applicants, without ever quite capturing the notion of need that set it in motion.

Another reason is that where an allocative scheme is set up, it nearly always gives potential recipients an incentive to change their behaviour so that they get more of the good being allocated or less of the bad. Military service provides a good example. Where a selective draft is used, there will be good reason to give exemptions to certain categories of people, such as students and married men. Immediately, this creates an incentive for potential draftees to find wives or college places, frustrating the original objective, and perhaps also inadvertently introducing a social bias into the outcome - if young men from well-off families can pull strings to get themselves into an exempt category. A third source of problems is that people may approach an allocative issue with different objectives. Elster distinguishes the politicians responsible for funding a service, who will chiefly be concerned with efficiency and with keeping down the costs of providing it, the service-providers themselves, who are likely to follow professional norms of equity in deciding who gets which benefits, and various recipient groups demanding increased provision for their group in particular. The ensuing three-way battle is well illustrated in the British case by recent arguments over Health Service reform or arts funding. Clearly, the compromise that will inevitably emerge will leave no group feeling that full justice has been done to its claims.

Elster's main aims are to look in some detail at how local justice works in different places (some of the country-by-country contrasts are intriguing), to try to explain what leads to one procedure being chosen rather than another (the answer is unavoidably a rather messy one), and to look at the consequences of different systems (particularly the unintended consequences - a book by Elster without unintended consequences would be like a Hitchcock film without an appearance by the director). But he also wants to see what light it can throw upon philosophical theories of justice such as those advanced by Rails and Nozick. These theories search for a supreme principle, or a small group of connected principles, to regulate a society's institutional structure; the allocation of specific goods, as well as of income, power and other generic goods, should conform to some general requirement such as (to take Rawls as an example) improving as far as possible the life-chances of the worst off group in society. Elster emphasizes how distant such theories are not only from institutional practice, but from the ethical norms that guide the people manning the institutions. These add up to a common-sense conception of justice, consisting of a plurality of principles which apply to different cases and which would not necessarily be consistent with each other if they were taken as general guides. Of recent theories of justice, the one that Elster's picture most clearly matches is Michael Waltzer's.

Elster's account of the common-sense view has much to recommend it, although in his summing up he gives less weight than I think he should to two principles that crop up repeatedly in his description of local justice, namely need and desert. In popular thinking, institutions charged with allocating essential resources like food, medical aid or housing should be concerned with meeting specific needs, not directly with the overall level of welfare of the recipient. So whereas economists conventionally recommend negative income taxes and other such devices which aim to increase the purchasing power of the poor, popular opinion regards it as a violation of justice if money transferred in this way is spent on cigarettes and whisky; if possible, the resources should be given in such a form that they can only be used to meet the designated needs.

When it comes to paying people according to their economic productivity, popular beliefs are again less utilitarian than Elster would have us believe. Although it is difficult in practice to separate the idea that people must be given incentives to work and to direct their efforts to useful ends from the idea that having produced something useful, they deserve to enjoy rewards in proportion to their achievement, there is no denying the hold of the latter idea. When Elster says "commonsense conceptions regard taxation and restrictions on private property as merely pragmatic matters, to be resolved by considering welfare rather than rights", he underestimates the power, in our culture, of the belief that what a person has earned through his own efforts and by fair means, he is entitled to keep.

Local Justice is good and bad news for social democrats. It shows pretty clearly why market mechanisms alone are not adequate for allocating a diversity of goods, from body-organs to public housing. But it also shows why the institutions of local justice can never satisfy the demands that are made of them. The quest for allocative justice turns out to resemble climbing a fell where each peak you reach only reveals a further peak beyond with low ground in between. If anyone still thinks that a perfectly just society is something we might achieve, not merely aspire to, this impressive book will put him right.

[end of page 22]

[Miller, David (1993), Stuck with second best, The Times Literary Supplement, Jan. 8, no. 4684, p. 22-22]

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