"“Just Deserts” and Intellectual Property"
Via Karl Smith (who raises some good objections of his own), I see that Greg Mankiw is the author of a paper (PDF) proposing that economists stop using an implicitly utilitarian moral theory, and instead embrace “Just Deserts” morality:
Let me propose the following principle: People should get what they deserve. A person who contributes more to society deserves a higher income that reflects those greater contributions. Society permits him that higher income not just to incentivize him, as it does according to utilitarian theory, but because that income is rightfully his. This perspective is, I believe, what Robert Nozick, Milton Friedman, and other classically liberal writers have in mind. We might call it the Just Deserts Theory.
I am drawn to this approach in part by reflecting on some of the public anger that we see over some very high incomes. My sense is that people are rarely outraged when high incomes go to those who obviously earned them. When we see Steven Spielberg make blockbuster movies, Steve Jobs introduce the iPod, David Letterman crack funny jokes, and J.K Rowling excite countless young readers with her Harry Potter books, we don’t object to the many millions of dollars they earn in the process. The high incomes that generate anger are those that come from manipulating the system. The CEO who pads the corporate board with his cronies and the banker whose firm survives only by virtue of a government bailout do not seem to deserve their multimillion dollar bonuses. The public perceives them (correctly or incorrectly) as getting more than they contributed to society. That is, if we take public attitudes as a gauge of our innate moral intuitions, then in evaluating distributive justice, we should focus not on the marginal utility of different individuals but on the congruence between their contributions and their compensation.
This is definitely not Robert Nozick’s view. Not the view espoused in Anarchy, State, And Utopia and not the views he held later in life either. And I’m pretty sure that Milton Friedman—like most classical liberals—was, in fact, a utilitarianish consequentialist.
And this is for good reason. It’s pretty clear if you read the paper that Mankiw doesn’t intend to be arguing for any really radical changes in the structure of American society. He wants to defend modern industrial capitalism, while bolstering the case for lower taxation of the rich and less generous spending on the non-rich. But think about his examples here. How is it that you can get rich writing books, making movies, designing MP3 players, or making TV shows? Well it’s thanks to statutory definitions of intellectual property. If the copyright on a book only lasted two years, JK Rowling wouldn’t be nearly as rich. If the inventor of the Xerox Alto owned some kind of perpetual right to the concept of a graphical user interface, Steve Jobs’ whole career would be unimaginable. And the firms involved in these industries are constantly “manipulating the system” of intellectual property to try to maximize their own advantage.
That’s not to say that Rowling just got rich manipulating the system or that she’s contributed nothing of value to society. But this whole system she’s operating in is justified in consequentialist terms (“[t]o promote the Progress of Science and useful Arts”) rather than desert. You could see that in utilitarian terms or in some kind of Rawlsian prioritarian terms or various other options. But I think a serious effort to try to recreate the economy in desert-based terms would involve a pretty radical rethinking of the way society works, not extension of the Bush tax cuts.
Mankiw should also consider that peoples intuitions about desert aren’t very conservative economisty. Normal people are always talking about how professional baseball players don’t deserve to get paid more than teachers.