What Happens When Your Philosophy is Fairness and Not Efficiency?

An AP article by Matt Apuzzo and Brett Blackledge highlights a trend we are going to see more and more in the future. The article “Stimulus Watch: Road money skips over needy areas,” highlights a fervor and danger in opening the redistribution of wealth box. According to the article:

“Although the intent of the money is to put people back to work, AP's review of more than 5,500 planned transportation projects nationwide reveals that states are planning to spend the stimulus in communities where jobless rates are already lower.”

“One result among many: Elk County, Pa., isn't receiving any road money despite its 13.8 percent unemployment rate. Yet the military and college community of Riley County, Kan., with its 3.4 percent unemployment, will benefit from about $56 million to build a highway, improve an intersection and restore a historic farmhouse.”

There are so many philosophical issues that need to be addressed when taking the role of a god and deciding who will get what. What are your standards? Who gets what and how much? Obama left these questions to be answered by state and congressional politicians. However, when you promise relief to those that are hurting most, what is the likely mindset to those listening? The answer is that those that feel they are hurting in any way; feel they are hurting the most.

Let’s put this article into perspective. On the whole, one unemployed person is the same and hurts as much as the next unemployed person, right? So what does it matter if we are helping the unemployed from an area of 3% unemployment versus one with nearly 14%? It matters because it doesn’t sound fair to those living in the area where there is 14%, pay taxes as much as everyone else, yet they do not receive assistance. Does it still sound reasonable?

Once the promise is made and the door to redistribution is open there is no end to what would be the fairest outcome. For example, the BLS shows that 15% of those unemployed are black males. This is the demographic hardest hit by the recession. Logically, the stimulus funds should go to aid districts with high rates of black male unemployment regardless of the overall unemployment rate of the area. Surely, this is an even better measure to distribute the stimulus than the unemployment rate of the geographic area?

I could go on creating examples of the fairest distribution of the stimulus package and each one will probably sound reasonable. The point however, is that there is no end to the debate of fairness. In truth, the fairest outcome in an economy is one where people have the greatest opportunity to gain wealth as opposed to one that tries to dictate and calculate the worth of an individual then send that individual their supposed fair share. The answer to the distribution question is capitalism.