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What is Fair? - Part II
[If you have not been keeping up, Part I is at this link. Also, because a large dataset is involved the interactive part of this may run slow over the internet depending on your connection speed]
Fairness by the Numbers
Fairness by the Numbers
It is unfair that you are better looking than I am. It is unfair that I have more hair than Jeff Bezos. It is unfair that Jeff Bezos has more money than anyone (everyone?) else. It is time to right all these wrongs. We have the technology.
It was in 2015 that I held forth on this subject, asking - and answering - how to equalize algorithmically. I was, as always, ahead of my time and I was, as always, generally ignored. Today the IRS has gone from being a revenue collection system to a benefits distribution system. After the revolution (scheduled for Monday) we will need a new system of taxation, perhaps a whole new system of everything. This time we get it right and bypass the middle man. No more congressmen voting their parochial interests while filling their own pockets. We can do it all ourselves. Best of all, there is no money involved. Using social media we can re-adjust everyone’s real position in real time. The world will be a better place because everything will be more “fair.” Trust me on this.
For those fond of government, it might be best to read no further until you write your Congressman. Tell him you are concerned about fairness and want something done about it. If you never hear back then you got the message and do not have to read what is below. If you do hear back from your Congressman’s computer, it will read something like this:
For those fond of government, it might be best to read no further until you write your Congressman. Tell him you are concerned about fairness and want something done about it. If you never hear back then you got the message and do not have to read what is below. If you do hear back from your Congressman’s computer, it will read something like this:
"Dear [your name misspelled]Thank you for your interest in fairness. We are working on this as we also consider it a priority. We will keep you posted on new developments. Please send more money.Sincerely"
If you are even the least bit doubtful or over the age of 12 and no longer believe in the tooth fairy, you may have concluded that the tax and spend methods used in this country for years have failed. Taxing productive people endlessly to give money to unproductive people has lead to exactly the same general unfairness that has plagued mankind across all governmental arrangements for all of history. But, with Big Data and the Internet we have better tools of measurement. One of these is the "Gini Index" (lots of links to research this for more information if you want it) which is a number between zero and one with zero being where everyone has the same (maximum fair) and one where all the goods are in the hands of a single member of society (minimum fair and soon to be Jeff Bezos in real life).
Economists long ago abandoned the notion that money matters, especially when it is printed with no actual productivity behind it. What matters is the amount of hard goods you have to trade and the hardest of these is real estate. So, for what follows, the standard of value will not be how much money you have but where you live. Got it? No more “printing” phony money and pretending it has value.
Eventually one learns that pretty much every issue in life is about sorting out answers to real estate questions. Where people are on the planet has a lot to do with how happy they are and how fairness is distributed. To make things manageable we will assume that what we want to achieve is the United States version of fairness. This prevents you from having to find your passport and at the same time allows the operation of familiar laws in a built up, mature, first world economy.
Everyone in the US lives in a zip code. Every zip code has a value on the Gini scale. Here are a few at the extremes. Note the relative "fairness" as Gini differences often do not correlate with income.
Economists long ago abandoned the notion that money matters, especially when it is printed with no actual productivity behind it. What matters is the amount of hard goods you have to trade and the hardest of these is real estate. So, for what follows, the standard of value will not be how much money you have but where you live. Got it? No more “printing” phony money and pretending it has value.
Eventually one learns that pretty much every issue in life is about sorting out answers to real estate questions. Where people are on the planet has a lot to do with how happy they are and how fairness is distributed. To make things manageable we will assume that what we want to achieve is the United States version of fairness. This prevents you from having to find your passport and at the same time allows the operation of familiar laws in a built up, mature, first world economy.
Everyone in the US lives in a zip code. Every zip code has a value on the Gini scale. Here are a few at the extremes. Note the relative "fairness" as Gini differences often do not correlate with income.
City | State | Zip Code | Gini | Population | Per Capita Inc |
Weston | Connecticut | 06883 | 0.4557 | 10369. | 32315. |
PinosAltos | NewMexico | 88053 | 0.8429 | 156. | 42495. |
EastSaintLouis | Illinois | 62205 | 0.5197 | 8547. | 26757. |
EastSaintLouis | Illinois | 62207 | 0.5441 | 8473. | 20215. |
Panther | WestVirginia | 24872 | 0.4667 | 636. | 18386. |
Ochopee | Florida | 34141 | 0.0004 | 129. | 32339. |
Giving New Meaning to Social Distancing
Giving New Meaning to Social Distancing
Here is a dilemma (prepare for lots of these). We have a database of more than 30,000 zip codes. If you can’t find a place where you are happy I can’t help you. Ochopee, FL has the lowest Gini value, therefore is the fairest of the fair, in this database. So, if your goal is maximum fair, you simply move there. However, as you are packing, you note that their per capita income is just over $32,000. So, unless you also have an annual income of exactly $32,339 you will be disturbing the fairness ecosystem of Ochopee. Alternatively, should you have an annual income above $32,339, when you arrive you could take the excess and distribute it evenly among the 129 residents living there before you hit town (it is actually a little more complicated than that to make Gini stand still, but you get the idea).
Suppose you do not want to move. You are just unhappy with your local Gini and want to change it. Having not heard back from your Congressman for several months (years? ever?) you decide to take action and contact everyone in your zip code. You tell them you are not happy with the neighborhood inequality and are willing to put all your income into a pot with everyone else’s and divide the pot equally. A reasonable prediction would be that, depending on your income, some fraction of your neighbors will be excited about this plan. I’ll bet you can predict which fraction.
Still not happy? Here is a solution in the middle. Suppose you are somewhat happy with the fairness in your Zip code but would prefer living where it is a little fairer and you are willing to move. No problem, just complete the boxes below and Submit (remember lower Gini value is more fair so you want to move to a place where Gini is lower than your present location).
Suppose you do not want to move. You are just unhappy with your local Gini and want to change it. Having not heard back from your Congressman for several months (years? ever?) you decide to take action and contact everyone in your zip code. You tell them you are not happy with the neighborhood inequality and are willing to put all your income into a pot with everyone else’s and divide the pot equally. A reasonable prediction would be that, depending on your income, some fraction of your neighbors will be excited about this plan. I’ll bet you can predict which fraction.
Still not happy? Here is a solution in the middle. Suppose you are somewhat happy with the fairness in your Zip code but would prefer living where it is a little fairer and you are willing to move. No problem, just complete the boxes below and Submit (remember lower Gini value is more fair so you want to move to a place where Gini is lower than your present location).
Your Present Zip Code |
How much you wish your Gini improved in your new home |
Don’t like this either? Perhaps you live in a southern state where the average temperature never drops below 40 degrees. To achieve a Gini improvement you have to move to Minnesota but you don’t like cold weather. No problem, it is a big country. We have lots of zip codes and we have computers. Give me your minimum average temperature and minimum Gini improvement and we can find a home for you. We want you to be happy and know you will be happier in a place where things are more fair.
If what you have just read sounds to you like the dumbest idea ever conceived that is because you have not read the US Tax Code recently. Also, if you don’t like the ZipFair idea, what do you propose? Remember you are too old to believe in politicians and YOU WANT THINGS TO BE MORE FAIR!!!! Before you go back to looking at cat videos on your computer, consider one last item. Silly as this notion sounds, it has a long history. For thousands of years when people were oppressed or attacked they either built stone walls and hunkered down or they moved. After eons of these activities we find ourselves in the place where we are. Putting aside the inconvenience of moving, the restrictive assumption that all happiness is based on location, the reality that your job does not move with you, etc., we are running out of places to move to. That is reality. Deal with it.
If what you have just read sounds to you like the dumbest idea ever conceived that is because you have not read the US Tax Code recently. Also, if you don’t like the ZipFair idea, what do you propose? Remember you are too old to believe in politicians and YOU WANT THINGS TO BE MORE FAIR!!!! Before you go back to looking at cat videos on your computer, consider one last item. Silly as this notion sounds, it has a long history. For thousands of years when people were oppressed or attacked they either built stone walls and hunkered down or they moved. After eons of these activities we find ourselves in the place where we are. Putting aside the inconvenience of moving, the restrictive assumption that all happiness is based on location, the reality that your job does not move with you, etc., we are running out of places to move to. That is reality. Deal with it.
What have we learned?
What have we learned?
The zipcode exercise offers a number of lessons :
1
.One is that measurement (still) matters. If you are going to give a task, like deciding fairness, to someone and it cannot be measured how will you know if it was done right or at all?
2
.Here is another: As a thought experiment, if you are unwilling to move or engage in proselytizing, then what are you willing to do? Voting fails the test. It is futile to delegate something that is highly subjective, intensely personal and resists measurement. The idea that strangers with their own normal, selfish interests operating in dark, smoke-filled rooms thousands of miles away will bring about local fairness is as absurd as the zipcode solution proposed here. As a measure of institutional hypocrisy, take the average of Gini values of all zip codes in every state. Of the 51 states (with DC counted as a state) the state with the LEAST fairness (highest Gini) is, you guessed it: DC!!
3
.Go through a sequence of percentage increments provided in the second box above and make note of the different destinations you end up in depending on your zeal for fairness improvement. Is one with less than the maximum Gini improvement more desirable than the others? So, it turns out your preference for fairness comes AFTER your personal comfort. Aha!! What does this say about your actual interest in fairness? Of course, by now we know you aren’t moving anywhere. The truth is that everyone is selfish, only some of us admit it.
4
.It is time to question the polarizing binary choice we all take for granted as the only two alternatives. To frame fairness in the red-blue, right-left context that dominates mainstream media is both simplistic and naive. The response should be "Really? Is this the best we can do?" It turns out that voting between two nearly identical alternatives and electing the least worst to manage fairness is just an imaginary salve on the conscience of people who are more fortunate.
5
.Anyone accusing me of making absurd suggestions should be reminded that in early 2020 those same accusers passively submitted to government requirements to abandon their productive lives and stay indoors for weeks. While not completely baseless, this example of government over-reach was always grounded on very flimsy data. Most troubling was the easy willingness of the body politic. If the government can capitalize on fear to induce you to destroy your financial security why can't I manipulate your wish for an improved level of fairness to get you to move? What is it that government has that I don’t? This discussion is not just about the importance of location. Of course it matters where you are. But it matters even more where you are allowed to be or told to go. Apparently no one sees what we should fear the most.
If you are neither willing to move nor canvas your neighbors to convince them to join you in your version of Fairness Valhalla, what you are left with is to STOP TALKING ABOUT FAIR!! We live in a complex society of millions of people, all of whom have their own values, motives, individuality, aspirations and perspectives. Other than what you found in Part I of this series, there simply is no universally agreed definition of "fair." And, there will never be agreement on how to achieve it, whatever it is.
As to the Great Pandemic of 2020, maybe we can agree on a few things. Many people are dead. Many people are financially ruined. None of that was good.
Neither was it fair.
As to the Great Pandemic of 2020, maybe we can agree on a few things. Many people are dead. Many people are financially ruined. None of that was good.
Neither was it fair.