Understanding Fairness/fair enough

Alan felt very conflicted as he celebrated his eighteenth birthday. Of course, he welcomed the prestige and freedoms that accompany eighteen-year-olds. He can now enjoy drinking, voting, owning a credit card, living on his own, signing contracts, skydiving, and being considered an adult now that he is eighteen. But he dreaded having to meet with the agent and the fates. Some older friends described their agent meetings as enlightening, world changing, and liberating. Others described the meetings as coercive, dreadful, stressful, embarrassing, and unfair.

Do you feel lucky?

The agent welcomed Alan into his sparse office, invited him to have a seat and offered a drink. After some friendly chit-chat, the agent began to describe the many factors in Alan’s life that resulted from chance. The list included gender, intelligence, talents, race, birth defects, genetic traits, birthplace, parental structure, family structure, inherited wealth, and other factors.

“Why are you telling me all this?” Alan asked the agent.

The agent explained “Because now you will be making some important decisions about your future. Here is the deal.”

The agent went on to explain that outside the office, dealers—informally called the fates—were standing by several specialized roulette wheels. Each wheel corresponds to one of the chance elements that have defined Alan’s life so far. The fates will spin each of these roulette wheels, and when Alan leaves the office, he will become endowed with these new characteristics, and live the rest of his life with these conditions newly dealt by the fates.[1]

Here are your options. You can pay a fee to keep your present characteristic and avoid having that factor left to chance. For example, if you are happy being born with the intelligence you have now, you can pay an “intelligence retention fee”. In return for this fee the fates will not spin the intelligence determination roulette wheel, and you get to keep the intelligence you now have. It works like an insurance policy.[2] If you decide not to purchase intelligence insurance the fates will spin the wheel, the result may be a higher or lower intelligence, and you will be endowed with that new level of intelligence for your remaining life.

“What are my chances?” the astonished Alan asked.

The agent explained that the results are determined purely by chance; however, those chances conform to the world-wide frequency distribution of the factor. Consider intelligence quotient as an example. An average intelligence quotient corresponds to an IQ of 100. So, there are even odds that your new IQ will be above or below 100. Similarly, there is a 17% chance of your new IQ being above 115 and a 2% chance your new IQ will be above 130 points. We have determined that presently your IQ is 127, so you are one of the luckier ones. We have prepared the fee schedule you see here so you know what it will cost to ensure you retain your current IQ level, or you can forego that fee and take your chances on a newly assigned IQ.

Alan noted the fee schedule included each of the chance factors he was born with, his measured value for each, the cost of keeping that factor as it is rather than risk chance, and the world-wide frequency distribution of that factor.

Alan asked, “What happens to the money?”

The money is used to fund the global trust. This global trust fund is used to compensate people who have unfortunate circumstances from birth or resulting from their session with the agent and the fates. These payments replace the clutter of welfare programs, unemployment benefits, and other support programs we had in the past. Instead we now have a world-wide basic income program funded by the global trust.

Actuaries study world-wide demographics and statistics regarding the willingness of each person to pay for insuring each type of characteristic. They use this information to establish and adjust the fee schedules. Notice the system forms a stable equilibrium. As funding of the global trust fund increases, the fund is better able to compensate the less fortunate. This will result in fewer people purchasing insurance, which will decrease the funds available for the trust fund. The market achieves a stable balance of risk and insurance payments.

Now if you have no more questions, let me know what insurance you want to purchase, the fates can spin the wheels, and you can begin your new life.

  1. This is an example of the veil of ignorance described by John Rawls.
  2. The idea of using an insurance policy as a thought experiment is described in the book Justice for Hedgehogs, by Ronald Dworkin.