h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

I may have to get back to it - the example didn't quite convince me.

You wrote: "Under system one, there would be 5 units of resource for each person. System two produces 15 units for some, and 10 units for others. [...] System two maximises the minimum outcome. The 'difference' between the richest and the poorest is justified because this 'difference' makes the poorest as well-off as they could possibly be - they may end up with a smaller share of the total, but that smaller share of a bigger total may turn out to be more than a bigger share of a smaller total."

But in System 1 the poor would be just average while in System 2 they will be below average, so they would be comparatively less well-off than in System 1. If 25 units are produced in total, wouldn't each unit be worth less than if 10 were produced?

Hi Toybox,

Thanks for reading this!

The difference principle is concerned with absolute wealth, not relative wealth. The assumption is that wealth can be created, and the economy grown. In other words, in system one there is a small cake and everyone gets an even slice. In system two, the cake is much larger and even the smallest share of cake 2 is larger than an even share of cake 1.

Those who have the smallest slice of the cake under system 2 can have no cause for complaint, since the alternative would give them even less. The 'difference' between the richest and poorest is therefore justified because it gives the poorest more (in absolute terms) than they would have had otherwise.

Of course, the gap between rich and poor is also constrained by the principle of fair equality of opportunity.

I was very scared at first (ooh, political philosophy ) but it was a real treat, thank you for writing it (and, apparently, for saving me of reading the book itself).

I'm not much of an economist, so you may need to be patient here. Why is absolute wealth considered here? If suddenly you get larger cakes, wouldn't the value of it drop, and, say, the general cost of life rise accordingly? Ah, maybe the cake would grow accordingly then?

But locally, that is, around the moment when people get to share the larger cake, I can see why the situation would be beneficial to everybody, despite of the inequality.

The cake is best thought of as being "resources" or "stuff" rather than just "money". If it was money, there would just be inflation as you suggest.

The thought here is that if we have a system where everyone gets the same as everyone else (more or less), it might be objected that there's little or no motivation to innovate, or to work harder, or to do better. Of course, some people might be motivated for the public good, but if you've got the choice of staying late to finish some extra work or take on a new time consuming development project, or go home to your family and friends, there's no incentive to stay.

But if there's an arrangement that says that if you work harder, or if you work smarter, there might be a bit more in it for you personally, the suggestion is that this will, overall, create more resources overall.

To try an example - I'm a carpenter making furniture. If I spend longer at work, I can create more and/or better furniture, which creates more furniture resource. But it's not clear why I should do this, unless I really enjoy my job. But if I'm allowed a bigger share of the resources - more money so I can buy more or better food,or a bigger house - I might be motivated to do it. Rinse and repeat across society and we end up with more resources overall.

Ah, I see now. Thanks ofr thaking the time to explain