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A Fair Shot?

Jan 28, 2012 • Economic Debates, Gender gap, Government, Households, Innovation, Labor, Macroeconomic Measurement • 92 Views    No Comments

In its breakdown of this week’s State of the Union, the Washington Post looked at time, topics and the Congress.

Time: The President devoted almost half of his speech to the economy, and more than half if you include the deficit.

The Congress: Republicans and Democrats together gave the President a standing ovation for saying that, “…women should earn equal pay for equal work.” For the other 9 standing ovations, Democrats stood and clapped alone during 8.

Topics: Discussing the economy, the President referred to jobs the most (27 times), energy next (20 times).

The breakdown does not mention, though, that “fair” appeared 8 times (my count) in the President’s speech:

  • has a fair shot (1)
  • does their fair share (1)
  • affluent Americans and multinationals pay their fair share of taxes (3)
  • foreign subsidies are not fair (1)
  • unfair trading practices from nations like China (1)
  • fair play (1)

The Economic Lesson

Nobel laureate Milton Friedman was concerned about”fair.”

We have free speech, a free press, freedom of religion. The Declaration of Independence, the Constitution and the Bill of Rights refer to “free” but never “fair.” Explaining that our founding fathers perceived government as an umpire and a policeman, Milton Friedman (1912-2006) concludes that they wanted us freely to pursue our individual lives.

Being “fair” to one group, according to Friedman, means less fairness to others. If government is more equitable to consumers, then it is less fair to businesses. Require a fair and balanced press to all political candidates and you limit the freedom of the press.

I wonder, though, what is “fair?” Does a fair society have health care for all? If fair is the key criteria, then who should be taxed and how much? Does a fair society mandate maximum earnings?  Fair trade? Fair prices? Affirmative action?

An Economic Question: What is your opinion of the balance between fair and free in a society with a market economy? You might want to look at Arthur Okun’s Equality and Efficiency: The Big Tradeoff.

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