On Kolm's Theory of Macrojustice (eBook)

Foreword 8
Contents 10
Contributors 12
1 Why Should We Debate the Theory of Macrojustice? 14
1.1 A Multidisciplinary Forum of Exchange 14
1.1.1 The Main Corpus of This Book 15
1.1.2 Reading Macrojustice (2005): A Valuable Challenge 17
1.2 A Landmark in Kolm's Thought: Justice as a Third-Best Palliative 19
1.3 A Dual Consensus at the Core of Macrojustice: ELIE Transfers 20
1.3.1 The General Consensus on the Redistribution Scheme 21
1.3.2 The Particular Consensus on the Extent of Equalisation to be Achieved 22
1.3.2.1 The Inadequacy of Extreme ELIE Schemes 22
1.3.2.2 The Interest of Intermediate ELIE Schemes 23
1.3.3 The Freedom to Use One's Personal Productive Capacities 24
1.4 The Most Original Features of Macrojustice 26
1.4.1 Personal Capacities as a Source of Rent Income that can be Shared 26
1.4.2 A Form of Taxation with Interesting Incentive Properties 27
1.4.3 A Non-Welfarist Theory of Taxation: Toward a Paradigm Shift 28
1.5 Debating Macrojustice 31
1.5.1 An ad hoc Reformulation of Liberalism? 31
1.5.2 A Consensual ``Endogenous Social Choice''? 33
1.5.3 Why Neglect Non-Human Wealth? 34
1.5.4 How Should We Measure the Capacity of the Most Productive? 36
1.5.5 How to Detect the Responsibility of the Least Productive? 37
1.6 Conclusion 39
References 44
Part I The Macrojustice of Serge-Christophe Kolm 46
2 General Presentation 47
2.1 Foreword: Preliminary Remarks on this Book and Its Introduction 47
2.1.1 Problem, Achievements and Acknowledgments 47
2.1.2 Sometimes Distinct Possible Conceptions: Macrojustice and the Introduction 50
2.2 Overall Distribution: Structures and Possibilities 53
2.2.1 A Demanded Distributive Structure 53
2.2.2 Implementation 55
2.3 Relations with Basic Ideas 57
2.3.1 Welfare 57
2.3.2 Classical Liberalism 58
2.3.3 Autonomy, Reciprocity and Justice 59
2.4 Liberty, Equality: Macrojustice from Endogenous Social Choice 60
2.5 The Possible Identity of the Supposedly Enemy Paradigms and the Additions of ELIE 64
2.6 The General ELIE Research Program:The Present Volume 67
2.6.1 General ELIE 67
2.6.2 Axiomatic Foundation 68
2.6.3 Minimum Income, The Sociology and Psychology of Transfers, Community and Dignity 68
2.6.4 Education and Growth 70
2.6.5 Low Labours 70
2.6.6 Capital, Uncertainty, Family Size 73
2.6.7 Information and Second-Best Implementation of the ELIE Ethics by Taxes on Total Earnings: A Marriage of Paradigms 74
2.6.8 Macrojustice in Normative Economics and Social Ethics 75
References 76
3 Economic Macrojustice: Fair Optimum Income Distribution, Taxation and Transfers 80
3.1 Justice, Liberty, Equality, Welfare and Information 80
3.1.1 Moral Principles of the Just Distribution 80
3.1.2 Earning Capacities and Information 81
3.1.3 Cooperative Liberty and Moral Autonomy 82
3.1.4 Utility and Welfare 83
3.1.5 Summary 84
3.2 Overview and Basic Properties 85
3.2.1 Properties 85
3.2.2 Pareto Efficiency 86
3.2.3 Equality 87
3.2.4 Who Owns the Economic Value of Given Earning Capacities? 88
3.3 Society's Principle of Macrojustice and Optimality 88
3.3.1 Theory 88
3.3.1.1 Endogenous Social Choice 88
3.3.1.2 Social Liberty and Given Capacities 89
3.3.1.3 Welfarism Between Necessity and Mistake 90
3.3.1.4 Strict Welfare 93
3.3.2 Is Society Welfarist? 97
3.3.2.1 The Scope of Full Welfarism: Proximity and Pain 97
3.3.2.2 Tests of Welfarism for Macrojustice16 
99 
3.4 The Optimum Tax Base 104
3.4.1 Practical Possibility 104
3.4.2 Incentive Compatibility 106
3.5 Economic Liberties, Resources and Capacities 106
3.5.1 Liberties 106
3.5.2 Resources 108
3.5.3 Rights in Capacities 109
3.5.3.1 Use-Rights and Rent-Rights 109
3.5.3.2 Self-Ownership 109
3.5.3.3 Social Liberty and Classical Liberalism 110
3.6 Equal Economic Liberty 111
3.6.1 Possibilities 111
3.6.2 The Simple Case, Notations 112
3.6.3 Solution 1: Social Liberty from an Equal Allocation 112
3.6.3.1 A Solution 112
3.6.3.2 First Properties 113
3.6.3.3 Rawls's Final Solution 114
3.6.3.4 The Geometry of ELIE 114
3.6.4 Solution 2: Socially Free Individuals are Susceptible to Choose an Equal Allocation 115
3.6.5 Solution 3: Identical Domains of Choice 116
3.6.5.1 Properties 116
3.6.5.2 Proof of Result (1) 116
3.6.5.3 Proof of Result (2) 117
3.6.6 Solution 4: Equal Liberty of Unequal Domains 118
3.7 Equivalent Properties and Normative Meanings 120
3.7.1 Equal Liberty 121
3.7.2 ELIE 121
3.7.3 Responsibility and Brute Luck 121
3.7.4 The Two-Part Income: Egalitarian and Classical Liberal, Deserts and Merit, Work and Works 121
3.7.5 Financed Universal Basic Income 122
3.7.6 Reciprocity 122
3.7.7 Progressive Transfers, Total Concentration 123
3.7.8 Tax Structure and Reform 124
3.7.9 Other Meanings 125
3.8 Real Gains, Incentive Compatibility 125
3.8.1 Irrelevance of Non-Realised Advantages 125
3.8.2 Incentive Compatibility and Information 128
3.9 The Degree of Redistribution and Public Finance 129
3.9.1 The Degree of Redistribution 129
3.9.2 Place in Public Finance 132
3.10 Conclusion 133
Part II Philosophical Aspects of Macrojustice 142
4 ELIE and the Emotions Related to Social Recognition 143
4.1 Introduction 143
4.2 Situations where ELIE Transfers can Decrease the Strength of the Social Bond 144
4.3 Conditions for Strengthening Social Bonds 148
4.4 Conditions for Increasing Social Bonds and ELIE Transfers 151
5 Basic Income and ELIE Transfers: Argument for Compatibility Despite Divergence 155
5.1 Introduction: The Formal Closeness of Two Projects 155
5.2 The Reasons of a Theoretical Divergence 158
5.2.1 The Financing of Basic Income Through ``Employment Rents'' 158
5.2.1.1 Wealth as an Inadequate Funding of Basic Income 158
5.2.1.2 The Limits of Financing Through ``Employment Rents'' 159
5.2.1.3 The Financing Test a Priori Easier for ELIE Transfers 161
5.2.2 The Treatment of ``Eccentric Productive People'' in the ELIE Schemes 163
5.2.2.1 The ``Eccentric Productive People'', as a ``Particular Case'' Among Many Others… 163
5.2.2.2 …But an Emblematic Situation of Work-Based ``Social Cooperation'' 166
5.2.2.3 Basic Income: A Seemingly Better Solution for ``Eccentric Productive People'' 169
5.3 A Route Towards a Possible Compatibility 171
5.3.1 ``External'' and ``Internal'' Endowments: Two Complementary Philosophical Notions 171
5.3.1.1 External Endowments Equalisation, as Foundation of Basic Income 172
5.3.1.2 From Kolm's ``Natural Resources'' to Van Parijs' ``Internal Endowments'' 174
5.3.1.3 Whether External or Internal, ``Given'' Endowments Subjected to ``Moral Arbitrariness'' 176
5.3.2 ``TECIE'' Transfers in Addition to ``ELIE'' Transfers 179
5.3.2.1 The Rent Sharing of External Endowments: ``TECIE'' Transfers 179
5.3.2.2 ``ELIE Transfers'' and ``TECIE Transfers'': Two Formally Similar Processes 182
5.3.2.3 ``Eccentric Productive People'' and ``Fallow-Land Owners'': An Incomplete Symmetry 185
5.4 Conclusion: Could ``Hybridisation'' be Fruitful? 188
5.4.1 Basic Income Financing Through TECIE Transfers: A Cautious Evaluation 189
5.4.2 Hybridisation of Transfers: A Prospect to be Thoroughly Studied 191
References 194
Part III Economic Analysis of Macrojustice 196
6 An Axiomatic Study of the ELIE Allocation Rule 197
6.1 Introduction 197
6.2 The Model 198
6.3 Axiomatic Characterisations 201
6.4 Discussion 209
6.5 Conclusion 212
References 213
7 An Exploration of Incentive-Compatible ELIE 215
7.1 Introduction 215
7.2 ELIE and Incentive-Compatibility 218
7.2.1 Setting 218
7.2.2 ELIE 219
7.2.3 ELIE, Envy and Implementability 219
7.3 The Closest Solution in Terms of Welfare 222
7.3.1 Methodology 222
7.3.2 Features of the Solution 224
7.3.3 An Example 227
7.4 The Closest Solution in Terms of Transfers 229
7.4.1 Methodology 230
7.4.2 The Geometric Construction 232
7.4.3 An Example 233
7.5 Concluding Comments 235
References 238
Part IV Combinations of ELIE with Other Targeted Transfers 240
8 Is ELIE a Wasteful Minimum Income Scheme? 241
8.1 Introduction 241
8.2 Does Extended ELIE Induce Waste? Three Minimum Income Schemes 243
8.3 How Much Waste is Induced? An Empirical Analysis 248
8.3.1 Data and Calibration 248
8.3.2 Results for the Benchmark Case 252
8.3.3 Sensitivity Results 254
8.4 Conclusion 255
References 261
9 ELIE-Minating Poverty? Limits of the Mechanism and Potential Improvements 262
9.1 Introduction 262
9.2 Limits of ELIE 263
9.2.1 A Simplified Example: A Linear Income Distribution 263
9.2.2 ELIE in France 265
9.3 The Personnal Allowance (PERAL) Mechanism 268
9.3.1 The Mechanism 270
9.3.2 Redistributive Mutual Companies 270
9.3.3 Redistribution 272
9.4 ELIE and the PERAL Mechanism 275
9.5 Conclusion 276
References 277
Part V Econometric Evaluations of ELIE 278
10 The Redistributive Aspects of ELIE: A Simulation Approach 279
10.1 Introduction 279
10.2 The Initial Formulation of the Model 282
10.3 Characterising the Initial Model 283
10.4 Uncertainty in the Information About Wages 288
10.5 Family Allowances and Family Composition 290
10.5.1 ELIE and Household Composition 290
10.5.2 The Influence of Equivalence Scales 292
10.5.3 Equivalence Scales and Income Dependent Fertility 293
10.5.4 ELIE and Family Allowances 295
10.6 Introducing Capital Stock 296
10.6.1 Stylised Facts 297
10.6.2 General Features 298
10.6.3 A Dynamic Model of Capital Accumulation 299
10.6.4 A Trade-Off Between Growth and Inequality 301
10.6.5 Analysing Taxation 302
10.7 Conclusion 303
References 307
11 The Trade-off Between Growth and Redistribution: ELIE in an Overlapping Generations Model 309
11.1 Introduction 310
11.2 An Overlapping Generations Model 311
11.2.1 Human Capital and Growth 312
11.2.2 Income and Education Decisions 314
11.2.3 Firms 315
11.2.4 Implementing ELIE in an OLG Model 316
11.2.5 Optimal Education and Savings with ELIE 319
11.2.6 Equilibrium 320
11.3 Imperfect Credit Market 321
11.4 Numerical Simulation of the Equilibrium 323
11.4.1 A Priori Information 324
11.4.2 Calibration of the Model 326
11.4.3 Heterogenous Behaviour Without Redistribution 328
11.5 The Trade-off Between Growth and Redistribution 329
11.5.1 Simulations Results 330
11.5.2 Assessing the Size of the Trade-off 332
11.5.3 The Trade-Off with a Larger Proportion of 01 Type 333
11.6 How to Overturn the Trade-Off 334
11.6.1 Education Subsidies 334
11.6.2 Linking Early Retirement to Redistribution 336
11.6.3 Numerical Assessment 336
11.7 Conclusion 337
References 340
Part VI Selective Comments by Serge-Christophe Kolm 342
12 Macrojustice in Normative Economics and Social Ethics 343
12.1 The Results Obtained: A Synthesis 344
12.1.1 Basic Logic 344
12.1.2 Solution 345
12.1.3 Aspects of Implementation 345
12.1.4 Method 347
12.1.5 Structure: Self-Ownership and Solidarity Freedom, Justice and Efficiency
12.1.6 Concluding Closure: The Ethical Synthesis, Alternatives, Non-Human Resources, Unanimous Improvement, Desired Distribution, Types of Moral Motives 349
12.2 Situation in Distributive Principles 350
12.2.1 The General Structure of Distributive Principles: The ``Justice Triangle'' 350
12.2.2 Pure Welfarism and Beyond 352
12.3 Macrojustice and Given Non-Human Resources: Self-Ownership-Enhancing Affirmative Action 354
12.3.1 Non-Human Ressources 354
12.3.2 The Solutions 355
12.3.3 Compensatory Sharing 356
12.3.4 Independent Superimposition 357
12.3.5 Integrated Distribution 357
12.3.6 ELIE and Full Self-Ownership 358
12.4 Application 358
12.5 Mesojustice, Alternative or Complement to Macrojustice 359
12.6 Ordinal Welfarisms and Their Relations to Macrojustice 361
12.7 The Degree of Distribution, Community, Reciprocity and Protection 364
12.8 The Motives of Solidarity 367
12.8.1 Wanting to be Forced to be Free 367
12.8.2 A Hierarchy of Moral Motives for Joint Transfers 368
12.8.3 Beyond Interest and Justice: The Virtue Ethics of Intrinsic Value 369
References 370