All Commentary
Sunday, April 1, 2007

The Struggle to Subdue Luck

The War against Luck Cannot Be Won

There was a time in Western societies under the rule of law when a person’s circumstances, such as his relative position in society, could only be branded as unjust if they could be shown to result from some breach of the rules of justice. The rules were enshrined in ageless conventions and elaborated in common or civil law. It was a recognized fact of life that without any breach of the rules, some would succeed in life far better than others and being rich or being poor was not in itself evidence of injustice.

Such a view was in harmony with a laissez-faire economy and with the idea that the state has a duty to protect the inviolability of property. Obviously, it also represented a blunt denial of the legitimacy of redistribution.

Modern democracy must use redistributive offers to assemble majorities and could ill afford to admit that such practices are illegitimate. Therefore the classic view, “There is no injustice without unjust acts causing it,” had to go. For a while “social justice” was invoked to replace it. Unlike justice tout court, social justice has no rules that can be either kept or breached. Therefore one can never tell that a state of affairs is “socially just.” But it can always be made more just by adding another piece to the welfare jigsaw puzzle that has been fashioned by a redistributive past. Social justice is a very useful idea because it dresses naked political expediency, or egalitarian passion, in the dignified cloak of justice. Doctrinally, however, it is pitifully vacuous. It badly needs to lean on some intellectually more appealing and coherent theory.

The badly needed intellectual underpinning of redistribution is nourished by two separate sources. One is the idea that society survives and multiplies best when it functions as a mutual insurance scheme. Under it the victims of random events—an earthquake, a drought, a fire or a flood—in one part of the country are compensated by the rest who have been spared, and all survive. The scheme supposedly descends to us from our hunter-gatherer ancestors, among whom the lucky hunter shared his booty with the unlucky ones. Next time they would share theirs with him. The scheme has compelling logic when the booty is perishable, but becomes controversial when it can be stored and especially if it is always the same “hunters” who have the luck and must share with the others.

Above all, the scheme is a slippery slope. Initially only catastrophe victims are compensated. But if the victim of a flood is entitled to compensation, why should the victim of a flood of cheap Chinese textile imports not be compensated?—not to speak of the victims of technological progress, the victims of a change in consumer tastes, the victims of a restrictive monetary policy. Clearly, there will always be too many victims claiming compensation for too many events that are far from random, and the scheme will not be a mutual one because it will always be broadly the same group of people who will carry the burden of compensating the others. What masquerades as mutual insurance for mutual benefit is in fact plain redistribution without the legitimacy of a veneer of justice.

The second of the two sources of the contemporary theory of what we might call “justice without rules” supplies the missing element. Put plainly, it holds that justice must be understood as fairness, and as luck is intrinsically unfair, it must be subdued. A person’s inherited or acquired abilities, character, and possessions, his capacity and will to gain knowledge and make efforts, are all lucky endowments that are “morally arbitrary” because he has not positively deserved them. Likewise, a person who has only few such endowments has not done anything to deserve being so poorly endowed.

The theory tells us that if all these people are to agree on a set of just social institutions (including the taxation of income and wealth), they must negotiate them behind a “veil of ignorance.” This means that they must totally lose all knowledge of their own endowments. Devoid of particular endowments, everybody is exactly the same as everyone else. No one has an unfair advantage conferred by good luck, nor disadvantage due to bad luck. Since no one knows whether in real life he is clever or dumb, lucky or unlucky, all will vote for a society where inequalities are ironed out. The effect of luck is drained from the system because people in a state of fairness agree to devise institutions that subdue luck.

It is arbitrary, but not quite absurd, to claim that an undeserved advantage is unfair. But it is absurd, and a plain mistake of language and logic, to affirm that what is not deserved is undeserved. Between what is deserved and what is not, there is an immense range of conditions that are morally neutral, neither deserved nor undeserved, but simply facts of life.

But this mistake is as nothing compared to the truly frightening blunder of requiring society, in the service of “social justice” or (to use the slightly less confused term) “distributive justice,” to go to war against the most elementary and powerful facts of life and to subdue luck. Societies that tried even half-seriously to do this—the late lamented Soviet Union springs to mind—have collapsed under the effort. Mature welfare states that go some way down this road are half-crippled by the burgeoning expense.

Luck is a very mighty adversary, and it is a grave mistake to enlist justice to fight it.

  • Anthony de Jasay is an influential independent philosopher and economist who has become one of the world’s foremost exponents of classical liberalism.

    Following World War II, de Jasay worked as a freelance journalist in his native Hungary until he was forced into exile. He became a research fellow of Nuffield College, Oxford, and has published in the Economic Journal, the journal of Political Economy, and other scholarly journals. I