Who Exploits
Who?
Karl Widerquist
Staff Economist
The Educational Priorities Panel
225 Broadway, Suite 3101
New York, NY 10007-3001
Email: Karl@Widerquist.com
Abstract
Gijs Van Donselaar uses a novel definition of exploitation (A exploits B if A is better off and B worse off than either of them would have been had the other not existed) and a series of two-person examples to demonstrate that an unconditional basic income can be exploitative and to make the case that everyone has both a right and responsibility to work. This paper considers Van Donselaar’s version of exploitation, his related concept of the abuse of rights, and the argument against basic income derived from them to show that he has not demonstrated any necessary relationship between these concepts and a social obligation to work: People can receive an unconditional income without exploiting others; a social obligation to work can punish people who are not exploiting others leading to Pareto-inferior outcomes; and a social obligation to work can in fact cause the kind of exploitation he believes it will cure.
Preliminary draft: Comments requested and please do not cite or quote without the author’s permission. For the revised draft contact Karl@Widerquist.com
Who Exploits Who?
Introduction
Clear evidence of the impact of the movement for basic income is apparent from the appearance of the first book aimed primarily at arguing against basic income, The Benefit of Another’s Pains: Parasitism, Scarcity, Basic Income by Gijs Van Donselaar.[1] Although there are many books that argue against government redistribution of property in general, this is the first to argue in favor of redistribution in general but against basic income in particular. This book may be a more formidable challenge because it comes from a very pro-redistribution perspective: it advocates a very strong redistribution towards the least advantaged but argues that universal basic income without a work requirement is an unjust method of redistribution.
Donselaar’s argument is aimed most specifically at refuting the case for an unconditional basic income made by Philippe Van Parijs in his book, Real Freedom for All. Van Parijs argues for the highest sustainable unconditional basic income to maximize the real freedom of the least-advantaged individual in society and that he took pains to make the case that an unconditional income would not exploit working citizens by any of several definitions of exploitation including Lockean exploitation, Lutheran (or Marxian) exploitation, Romerian exploitation, and others. Van Donselaar takes issue with the universality of basic income by coming up with a definition of exploitation (or parasitism) that Van Parijs does not address: A exploits B if A is better off and B worse off than either of them would have been had the other not existed (or if they had nothing to do with each other). Using this definition of exploitation and the related concept of the abuse of rights, Donselaar makes the case that a parasitic relationship exists between recipients of unconditional transfers and workers. He concludes that there should be both a social right and responsibility to work. One cannot simply dismiss Donselaar’s definition by saying that one or another of the other definitions is the “true” definition of exploitation. All of the different possible definitions of exploitation are legitimate concepts and deserve to be considered on their own merits whether or not they best deserve the right to the term “exploitation.”
This is one of a series of three papers discussing Donselaar’s case against an unconditional basic income. Widerquist 2001a questions the validity and workability of Donselaar’s definitions of exploitation and the abuse of rights. Widerquist 2001b considers problems with how the concept of Donselaarian exploitation is applied. This paper takes the definitions of Donselaarian exploitation and the abuse of rights as given, and demonstrates that there is no necessary relationship between a social obligation to work and either the abuse of rights or Donselaarian exploitation. Part 1 briefly summarizes Donselaar’s argument. Part 2 argues that if land has value other than as an input in the production process (i.e. it is a primary good), an unconditional income does not involve abuse of rights, eliminating the abuse of rights awards people for having expensive tastes, and to the extent that it can cause Donselaarian exploitation it is no more likely to do so than a paid occupation. Part 3 argues that enforcing a social obligation to work may punish people who are not exploiters in the Donselaarian sense and it can even cause Donselaarian exploitation. Part 4 extends the arguments in parts 2 and 3 from the least advantaged individuals to everyone. 1 Part 4 concludes.
Part 1: Donselaarian exploitation explained
To understand Van Donselaar’s case against an unconditional basic income (UBI), one must first understand Van Parijs’s case for it. Van Parijs argues that the freest society is one that leximins real freedom. That is, it maximizes the freedom of the least advantaged individual to do whatever she might want to do. He argues that a basically capitalist economy with the highest sustainable UBI is the society that gives the least advantaged more real options than any other. He recognizes that this level of basic income would require substantial redistribution, which should be undertaken only if it can be done without exploiting other members of society. He judges that such unconditional redistribution is not exploitive of those who are engaged in productive work, if taxes are levied on “outside assets”—assets that no one alive created but that have monetary value, such as land and natural resources. Because no one created these assets and so no one has an inalienable right to the return these assets generate. Thus, he supposes that a nonexploitive basic income can exist so long as it is limited to the value of those assets.
Van Parijs believes that land and natural resource taxes alone, unfortunately, cannot raise enough revenue to support a substantial basic income, but he believes that there is another outside asset that can produce a large enough tax base—labor. Labor is not traditionally thought of as an “asset.” A person creates her labor income with her own effort, and therefore, one would suppose she should be entitled to all of the fruits of her labor and certainly should not be forced to share the product of her efforts with people who are not willing to put forth similar effort. No so fast, says Van Parijs; not everyone has the opportunity to put forth the same effort. In order to work in a capitalist economy a person first must find a job,[2] and jobs—especially good jobs—are often difficult to find and the labor market is not necessarily fair in how it distributes access to job assets. Parijs concludes only a part of the return from labor income can be considered the fruits of one’s effort and another portion of it can be considered the return on the asset of having a particular job. He advocates using an income tax as the best approximation of taxing the asset-portion of jobs. This money can be used to sustain the highest possible basic income. This basic income must be unconditional (that is it must not have any work requirement), because to do so would reduce the freedom of the least advantaged to do whatever they might want to do.
Van Donselaar does not object to taxing outside assets, to the redistribution of income, or treating jobs as assets; he objects to the unconditionality of the basic income. This objection comes from two distinct principles, which he often states as if they are synonymous—the abuse of rights and his definition of exploitation.
As Van Donselaar defines it, the abuse of rights exists one sells a right to an asset that one has no interest in, aside from the desire to resell it. He uses an example to illustrate this point (p. 1-5). A farmer diverts the stream running through his property solely to get his neighbor to pay him to return the stream to its natural flow. According to Van Donselaar, this transaction would have been acceptable if the farmer had some private reason to divert the stream such as to create a pond or irrigate his field, but if he does it solely to get his neighbor to pay him to stop is abusing his water rights. This principle places a serious limit on real freedom: People who have no desired to use outside assets do not deserve any share in the return to them, whether those assets be natural resources or job assets. Thus, any redistribution based on the existence of these assets should be granted only to those who demonstrate a willingness to work with those assets. The abuse of rights condemns not only a Dworkinian clam-shell auction, but also virtually all private ownership of resources, interest on debt, and much private property. Thus, despite its work-ethic friendliness, there is nothing “right-wing” about it; this attack on basic income is firmly from the far left.
Van Donselaar (p. 3) offers the following definition of exploitation or parasitism: A exploits B if A is better off and B worse off than either of them would have been had the other not existed. Although this definition is derived from Gauthier (1986), let’s call it Donselaarian exploitation because he seems to be the first to employ it to such an extent. According to Donselaar, the basic income recipient (who does not work) is better off and the laborer is worse off than either of them would have been if the other had not existed. Thus, he concludes UBI is exploitative, and should be replaced by a redistributional system that supports only those who are willing to work or unable to work.
The relationship between the abuse of rights and Donselaarian exploitation is unclear in the Benefit of Another’s Pains. Although it is possible to have either one without the other (Widerquist 2001b), Van Donselaar focuses only on cases in which the two exist together, leaving it ambiguous whether he espouses one or the other, both independently, or both concurrently as the ultimate principle. There are four possibilities:
1) Exploitation is the ultimate standard and the abuse of rights is only condemned if and when it leads to exploitation.
2) Abuse of rights is the ultimate standard and exploitation is only a problem if it follows from the abuse of rights.
3) Both are independently ethically condemned, and the existence of one or the other is sufficient to condemn an action.
4) Only the to two together are ethically condemned, and only the existence of both at the same time is sufficient to condemn an action.
That ambiguity complicates this critique, which deals closely with the question of if and when one or the other or both can be said to exist. Donselaar seems to imply that the abuse of rights is the more important of the two standards (Widerquist, 2001b). Be that as it may, this paper attempts to deal with the two principles as separately as possible, demonstrating that neither one nor both necessarily implies a social obligation to work as Donselaar supposes they do.
Using his definition of exploitation and his concept of abuse of rights, Van Donselaar easily demonstrates that one of the examples Van Parijs uses to support basic income (the story of Crazy and Lazy) is both exploitive and abusive. Crazy and Lazy are the only two inhabitants of an island.[3] The island has 4 units of land, 1 unit of labor must be mixed with 1 unit of land to produce 1 unit of the consumption good. Crazy prefers to work as much as possible. If she were alone she would work all 4 units of land and consume 4 units of the consumption good (Figure 1). Lazy prefers to work as little as possible. If he were alone on the island (Figure 2), he would use only 1 unit of land to produce the minimum amount of consumption needed for subsistence (1 unit). If on the island together and if endowed with equal rights to land, the two strike a deal, in which Crazy farms all of the land and gives Lazy enough crops so that she can subsist without working at all. Crazy is now worse off than she would be if Lazy did not exist (she works the same and consumes less), and Lazy is better off than he would be if Crazy did not exist (she works less and consumes the same). That is Donselaarian exploitation. That is also Donselaarian abuse of rights. Lazy has sold land, for which he had no private interest. Lazy does not need all of his half of the land. He doesn’t really care what happens to it. According to Donselaar, Lazy should simply farm the portion he wants and let Crazy have all of the rest free of charge.
It does not matter, from Donselaar’s perspective, whether Lazy is the legitimate owner of half the land or not. Selling an asset, which he has a legitimate right to but no private interest in (his land), allows Lazy to obtain control over an asset he has no legitimate right to (Crazy’s labor). Thus, it doesn’t matter to Van Donselaar whether taxes are applied to job assets, or land assets, or any other assets; the product of those assets belong only to those who are willing to work with those assets to produce consumption goods. He concludes that people who would receive an unconditional transfer would both exploit others and abuse their rights by claiming income from assets that they have no independent interest in. Thus, he believes there should be a social obligation to work, and if assets are to be distributed in a Dworkinian auction, the proceeds from that auction should go only to workers.
Van Donselaar draws these conclusions based on assumption specific examples. He believes it is enough to show the possibility that UBI could cause exploitation and/or the abuse of rights to conclude that redistribution should not be unconditional, or at the very least there should be the recognition that parasitism of the sort he defines is a necessary side effect of an unconditional basic income. But these examples are not enough to draw those conclusions. He does not adequately consider when and whether the examples are representative of a broader case. The rest of this paper examines the link between Van Donselaar’s two principles (Donselaarian exploitation and the abuse of rights) and the social obligation to work (that is, the case against an unconditional basic income). The next section begins this critique by considering the value of land as a primary good.
Part 2: Land as a Primary Good
Many of the conclusions Van Donselaar reaches rely on the tacit assumption that land (or any other resource) is not a primary good. A primary good is a consumption good—a good that has value to the consumer without being altered in the production process. A secondary good (or a tertiary good) is a good that is it has no consumption value in itself, but is useful in the production of primary goods. For example, unrefined iron ore is a secondary good and a steel-plated videocassette recorder is a primary good.[4] The assumption that resources are only useful in the production process is essential to the conclusion that those who do not wish to participate in the production process have no interest in those assets. If land is a primary good, being willing to participate in the production process is not synonymous with having an interest in resources, and anyone that values land as a consumption good can accept an unconditional income without abusing her rights. If land can be a primary good, a number of other results follow, including that eliminating Donselaarian exploitation requires rewarding people for having expensive tastes, and that an obligation to work does not necessarily follow from the desire to eliminate either exploitation or the abuse of rights.
To examine the effects of land as a primary good return to the Crazy-Lazy example but consider also the preferences of Hippie. Like Lazy, Hippie has a strong aversion to labor, but unlike Lazy, Hippie also has a weak commitment to environmental preservation (weak in the sense that he may be willing to trade it away for leisure at some price). Hippie believes that everyone should work as little of the land as they need for subsistence and leave the rest of the island in its natural state.[5] Although Hippie has no interest in working his share of the undeveloped land, he does have an interest in his share of the undeveloped land. Crazy’s and Lazy’s utility functions depend only on two goods: consumption (C) and leisure (L). The symbol (+) indicates that utility is a positive function of these elements.
Crazy or Lazy: Ui = Ui[C+, L+]
The difference between Lazy and Crazy is in the relative weight the put on consumption and leisure. Just how much leisure Crazy is willing to give up for consumption is left open to consideration, but assume he is willing to give up more than Lazy. Hippie’s utility function includes an element that does not appear in either Lazy or Crazy’s utility functions—the amount of undeveloped (or vacant) land (V).
Hippie: UH = UH[C+, L+, V+]
Just how much Hippie values vacant land relative to leisure and consumption will be left open to consideration, but assume he is the only one who will give up anything for more vacant land.
Given Hippie’s strong preference for leaving land undeveloped, if he were alone on the island, he would work 1 unit of land, produce 1 unit of the consumption good and live at the subsistence level, just as Lazy would (Figure 2, substituting Hippie for Lazy). But his utility function when alone would be different than Lazy’s:
Hippie: UH = UH[C=1, L=3, V=3]
Lazy: UL = UL[C=1, L=3]
The greater scarcity of land (caused by the existence of Crazy) negatively affects Hippie (unlike Lazy). His utility function when land is divided equally but not traded (Figure 3) contains fewer goods (less vacant land) than it does when he is alone:
Hippie: UH = UH[C=1, L=3, V=1]
If Hippie and Crazy start with an equal distribution of property, they could strike several different Pareto-improving deals. For example, they could strike the same deal that Crazy and Lazy struck (Figure 1), in which Crazy works the whole island and pays Hippie 1 unit of the consumption good as rent.
Hippie: UH = UH[C=1, L=4, V=0]
Crazy: UC = UC[C=3, L=0]
In this outcome Crazy is no better or no worse off than she would be trading with Lazy, but with Hippie she is free from the abuse of rights. What is the difference? The difference is in Hippie’s utility function. Hippie does have a genuine interest in the land he rents to Crazy—his desire to leave land in its natural state. Hippie cannot be accused of abusing his rights because he has merely given up something of value to him in exchange for something else that has value to him. Even though Crazy is no better off trading with Hippie than Lazy, trades are acceptable with one and unacceptable with the other
Under some outcomes, Crazy could be worse off trading with Hippie than Lazy. For example, if Hippie drives a harder bargain, he and Crazy could reach a deal in which, Crazy works 3.5 units of land, leaving 0.5 unit of land as a nature reserve (Figure 5) and paying Hippie 1 unit of the consumption good for the privilege, giving each the following utility:
Hippie: UH = UH[C=1, L=4, V=0.5]
Crazy: UC = UC[C=2.5, L=0.5]
In this case, Crazy is clearly better off trading with Lazy who does abuse his rights, than with Hippie who does not.
UC[C=2.5, L=0.5] < UC[C=3, L=0]
Crazy’s leisure is lower and her consumption is higher trading with Hippie [C=2.5, L=0.5] than it would be trading with Lazy [C=3, L=0]. By assumption, Crazy is always willing to give up equal amounts of leisure for consumption. Thus, if Crazy had the choice of being on an island with Hippie who does not abuse him or with Lazy who does, he would choose to be abused.
This illustration reveals that the elimination of abuse of rights requires rewarding people for expensive tastes. Hippie is entitled to take more than Lazy because he wants more. Under the standards laid down by Donselaar, the trade between Lazy and Crazy was unjust but the very same trade—or one even less favorable to Crazy—is just if the trade is made between Hippie and Crazy. Not because Hippie contributes more than Lazy, but simply because it is harder to make Hippie happy than it is to make Lazy happy. Van Parijs (1985) pays considerable attention to making the case that expensive tastes should not be rewarded, but Van Donselaar seems either unaware or unconcerned with the implication that eliminating the abuse of rights requires rewarding expensive tastes. The reason for this is that he does not adequately consider whether land may have value as a primary good.
But does Hippie exploit Crazy? This example reveals the difficulty of equating abuse of rights with Donselaarian exploitation. Hippie has not abused his rights, but that does not necessarily imply that he does not exploit Crazy. Crazy is clearly worse off than he would have been if Hippie did not exist, but Hippie may or may not be better off than he would have been if Crazy did not exist. The answer to that question depends on how much Hippie values his current position relative to the position he would be in if Crazy did not exist. For the case in which he trades all his land to Crazy, Hippie exploits Crazy if his utility while trading with Crazy is greater than it would be if he were alone:
If UH[C=1, L=4, V=0] > UH[C=1, L=3, V=3] > exploitation
But if his utility is less than or equal to what it would be if he were alone, Hippie does not exploit Crazy:
If UH[C=1, L=4, V=0] > UH[C=1, L=3, V=3] > no exploitation
Hippie has more leisure when with Crazy but more undeveloped land when alone. The existence of exploitation depends on the relative value Hippie puts on those two goods.
If Donselaarian exploitation is the standard, there are fair and unfair prices that depend solely on the preferences inside Hippie’s head. This possibility of exploitation is not limited to the sale of outside assets by recipients of an unconditional income, but for any good there is some price at which its sale would be exploitive in the Donselaarian sense. Whether Hippie sells land that he simply wants, or whether he sells something he has produced, if the price is high enough he will be better off and Crazy worse off than either of them would have been if the other did not exist. The elimination of exploitation would require strict regulation of all market prices, which in turn would require certain knowledge of the subjective gains and losses people experience trading the goods they trade (for discussion of the difficulty of implementing such market regulations see Widerquist 2001a). Van Donselaar has not shown that an unconditional transfer is any more likely to be exploitive than any other exchange and thus he has not made the case why UBI should be singled out for elimination in the name of ridding the world of exploitation.
Notice that the questions of whether Hippie or Lazy exploit or abuse Crazy have relatively little to do with Crazy, but they have everything to do with Hippie’s and Lazy’s preferences. The fact that Hippie enjoys undeveloped land makes him free to trade his land in ways that Lazy cannot without abusing his rights. The more Hippie enjoys his land the greater the price he is morally allowed to sell it for without exploiting Crazy. It seems strange that how much Hippie enjoys the transaction regardless of its effects on Crazy, would have anything to do with social justice, but it does matter if Donselaarian exploitation is going to be used as a standard. What difference does it make to Crazy what her trading partner’s tastes are? Should it matter to Crazy whether she is on the island with Hippie who does not exploit her or Crazy who does if she experiences the same level of consumption no matter which one she is with? Is the existence or nonexistence of Donselaarian exploitation a question worth answering?
Notice also that Hippie shares in the social product without contributing any of his own labor. Van Donselaar (1997, p. 170-172) argues, that in order to avoid abuse of rights and exploitation, every person has an obligation to work. As he puts it, “Those who are entitled to some labor free income from the productive activities of others must be those who have an independent interest in the assets that make these productive activities possible but have no access to them, and such independent interest cannot exist without a willingness to work.” This statement can only be true of one assumes that land cannot be a primary good. If land can be a primary good, the central conclusion of The Benefit of Another’s Pains does not follow from the two ethical premises on which that conclusion is based.
Does this argument apply only to land rents? It might be presumed from this argument that the amount of a basic income would be limited to taxes that can be generated from land rents and resource taxes, which many people believe cannot raise enough revenue to support such a full basic income. However, using the Donselaarian standard, it is not the level of rent on land that determines its value to Hippie, but the enjoyment he gets from undeveloped land. As Van Donselaar puts it, “If a person’s position is worsened through the acquisitions of others he should be compensated, but the level of compensation . . . is determined by the use he could have made of the goods that are appropriated by others, not by the market value of their appropriations.” (p. 87). If Hippie enjoys undeveloped land sufficiently Crazy will have to give up both his land rents and his job-rents to purchase it from Hippie or there can be no deal. Thus employing the Donselaarian standard is actually much better from basic income than the standards Van Parijs himself applies. Had Van Parijs used the Donselaarian standard of exploitation he need not have gone to the trouble of arguing that jobs are assets, only that some people may have a strong desire for unconditional access to land (or other assets) that is denied them in an industrialized economy. If land has been appropriated without Hippie’s consent, the amount of basic income that he can rightfully claim need not be limited to his per capita share of land value, but to the amount of enjoyment that he (or he and his friends) would receive from owning all the land in the nation if everyone else disappeared. There may be a group of Hippies for whom no amount of cash can compensate them for how well off they would be if they had the freedom to live in a society in which resources are used the way they believe is desirable. A modern industrial society cannot afford to give them that choice without allowing Hippie to impose his preferences on them. An unconditional basic income is a barely adequate substitute for Hippie, but it might amount to the best compensation society is capable of paying for imposing their preferences for land use on him.
Is this an argument that applies only to the rare case of environmentalists? No, in an industrialized economy people do not begin with their own plot of land that they can work themselves or trade for a basic income as Lazy does in this example. There is no voluntary agreement on the distribution of land. Only the children of the rich have an unconditional access to the land, but everyone has a desire for land as primary good. Everyone wants a place to sleep at night, but the homeless are denied the ability even to build a shack out of scrap wood. People who deserve compensation for land appropriation need not be lazy surfers or environmentalists. They may be willing to get together with a group of like-minded individuals, and to work very hard to create an alternative economic system. This option is not available to people in an economy without an unconditional basic income unless they first work for everyone else under the current economic arrangements. But if people have to first work for everyone else just to get the resources they need to work for themselves in the way they want, they are the victims of Donselaarian exploitation at the hands of everyone else.
Therefore, even an unconditional basic income is free of Donselaarian abuse of rights: Everyone who is born without sufficient land of her own can demand compensation because every such person has sacrificed an asset in which she has an independent interest to the prevailing economic system. If it is true that the abuse of rights is Donselaar’s primary standard (as argued in Widerquist 2001b), then this fact is enough to justify an unconditional basic income.
Application of Donselaar’s obligation to work can make Hippie worse off, despite the fact that he is not exploiting anyone. Suppose land is distributed only to those who are willing to work the land, as in Figure 4. Hippie is worse off than he would be if Crazy did not exist, but Crazy is also worse off than he would be if Hippie did not exist. This distribution rule has clearly sided with Crazy’s preference for how land should be used over Hippie’s. Hippie is clearly made worse off by this work obligation (relative to being alone, Figure 2, or with an equal distribution of assets and no trade, Figure 3), even though he is not was not an exploiter without a work obligation. Hippie and Crazy’s utility functions would be as follows:
Hippie: UH = UH[C=1, L=3, V=0]
Crazy: UC = UC[C=3, L=1]
Hippie has no nature reserve and he will have to work every hard to get one. He could offer to work for Crazy in exchange for the promise from Crazy to leave a small part of the land vacant. As long as Crazy is willing to give up 0.5 units of consumption for 3 additional units of leisure and Hippie is willing to give up 2.5 additional units of leisure for 0.5 units of undeveloped land, the two can make a mutually beneficial trade with the outcome in Figure 5. Hippie works 3.5 units of land and Crazy working nothing at all. In this case, Hippie enjoys only 0.5 units of leisure, consumes 1 unit of the consumption good and enjoys a nature reserve of 0.5 units. Crazy enjoys 2.5 units of the consumption good and 4 units of leisure:
Hippie: UH = UH[C=1, L=0.5, V=0.5]
Crazy: UC = UC[C=2.5, L=4]
Crazy does not abuse his rights but if his utility is greater now that it would be if here were alone, Crazy exploits Hippie. That is
If, UC[C=2.5, L=4] > UC[C=3, L=0] Crazy exploits Hippie
Thus, a rule that distributes resources to those who want to work with those resources can cause exploitation. Notice that the land Hippie uses for his personal consumption is less than half the land. He consumes the output of 1 unit of land, and he consumes 0.5 units of undeveloped land. He works the other 2.5 units solely to get Crazy to agree to leave the 0.5 units of undeveloped land alone. Notice also that Crazy is better off than he would be in Figure 3 (he consumes more and works less). Thus, Hippie is possibly exploited relative to where he would be if Crazy did not exist, but he is certainly exploited relative to where he would be if resources were divided equally and untradable.
It must be recognized that if Lazy and Hippie were on the island together, Lazy could force Hippie into the same position by threatening to work land that he doesn’t want to work. To do so Lazy would have to lie about his desire to work and to abuse his right to work the land. This fact out two things: First, distributing resources to those who demonstrate a willingness to work them does not prevent the abuse of rights, it merely changes who has the opportunity to exploit whom. Second, what such a property rule actually does is give a great benefit for people with one type of preferences over people with another type of preferences. Those who believe land should be used for commercial purposes will always have the advantage over those who have any other preferences. Although all Hippie wants to do is to make sure that as little land is worked as possible, nearly all the land ends up being worked, and Hippie is the one who has to work it. Would it matter to Hippie if he is on the island with Crazy who may not exploit him under some definitions or Lazy who definitely exploits him? Or would Hippie feel that it is not Lazy or Crazy’s preferences that are to blame but the decision rule that is so biased against people with his preferences? It appears that the motivation behind the allocation of assets (or the income from those assets) solely to those who demonstrate a willingness to work with those assets is not a desire to reduce exploitation or the abuse of rights. But the motivation for that rule appears to be a belief that the preference for work (especially commercial work) is better than any other preference and the desire to give people with such preferences advantages over others.
That being said, the social obligation to work can, in some circumstances, make everyone worse off including those who prefer to work in commercial enterprise. To see this, suppose that the decision rule attempts to be more impartial between Hippie and Lazy’s preferences by beginning with an equal distribution of resources, but enforcing on everyone the obligation to perform at least one unit of labor. In this case the outcome may well be identical to the Figure 3 (substituting Hippie for Lazy). If Hippie is so lazy that he will not trade any of his land for anything but increased leisure, and he is already working the social minimum. Thus there can be no trade from this staring point. Crazy will work his 2 units of land, consume 2 units, and enjoy 2 units of leisure. Hippie will work 1 unit, consume 1 unit, and enjoy 3 units of leisure and 1 unit of undeveloped land. Even if both Crazy and Hippie would prefer to trade to the outcome in either Figure 4 or Figure 5 the social obligation to work prevents either of this mutually beneficial trades and enforces a lower utility on both of them. For example comparing their utilities to Figure 5:
Hippie: UH[C=1, L=3, V=1] < [C=1, L=4, V=0.5]
Crazy: UC[C=2, L=2] < [C=2.5, L=0.5]
Here the social obligation to work in the name of eliminating Donselaarian exploitation and abuse of rights has not only harms Hippie who is guilty of neither, but it has also harms Crazy, the person who it was supposed to help. It is certainly problematic for a principle of justice to impose an outcome that makes everyone worse off. This result has strong implications for Donselaar’s recommendation of mandatory work sharing (p. 166-190). If jobs are scarce assets and people differ in their preferences for work, mandatory job-sharing will force the Crazies to work less and the Lazies and Hippies to work more than any of them would want to if those assets were tradable.
So far this paper has demonstrated four things: First, if land is a primary good, UBI is free of abuse of rights. Second, if the price is right UBI is also free of exploitation and it is no more capable of creating exploitation than any other market transaction. Third, distributing assets to people willing to work with those assets punishes people who are not exploiters and can cause them to be exploited and abused by others. Fourth, the obligation to work can also lead to Pareto-inferior outcomes (making everyone worse off). But it remains to be seen that the work-requirement itself can actually cause Donelaarian exploitation. This is the subject of the next section.
Part 3: The Responsibility to Work as a Cause of Exploitation
Many of Van Donselaar’s examples of exploitation and abuse of rights actually involve people who work. In his first example (p. 1-5), farmer Pickles works to divert a stream so that other people to pay him to stop. Van Donselaar sites a real company Mayfair Projects which works to guess what names others might want register as copyrights so that it can register them first, forcing others to buy them from Mayfair (p. 136). He discusses at length (p. 137-142) an imaginary business called Vultura Queue Jumping Enterprises, Inc. that works with resources but yet abuses its rights and exploits others. Thus, it is clear, even from Donselaar’s own examples, that working with resources does not ensure that one does not abuse one’s rights to those resources nor exploit others. Yet, he proposes no solution to the kinds of abuses of rights perpetrated by the antagonists in these examples. His solution to the abuse of rights is a social obligation to work. In light of the results in Parts 3 and 4, we know that nonworking recipients of a UBI may or many not be Donselaarian exploiters and from the examples in the Benefits of Another’s Pains we know that workers may or may not be Donselaarian exploiters. Therefore, it already is tenuous to propose an obligation to work as a solution to exploitation, but maybe there is the hope that social obligation to work will reduce the amount of exploitation out there. That might be true unless forced participation can cause exploitation, and this section shows that it can.
Exploitation of workers by employers was not possible in the examples in parts 3 and 4 because there were no employers; work was not a social activity. A person worked alone and consumed the combined product of both labor and resources she used, except what she paid in resource rent to recipients of unconditional transfers. The idea (that a worker who is forced by circumstances to accept employment can be exploited by her employer) goes back at least as far as Karl Marx, but he was dealing with a very different definition of exploitation than Donselaar. Is Donselaarian exploitation of a worker by an employer possible? Yes, once again return to the Island of Lazy and Crazy, but this time, replace our two main characters with two people named Individual and Society.
It doesn’t matter for the purpose here whether Individual has preferences like Lazy, Crazy, or Hippie, but let’s take the “least worthy” and choose Lazy. Assume that if Individual were alone on the island, all would be the same as when Lazy was alone on the island in Figure 2. He would work 1 unit and consume 1 unit and reach some level of utility UL[C=1, E=1]. Suppose when Individual and Society are together on the island there is a different social arrangement than in our Crazy-Lazy scenario. Work is a cooperative enterprise with increasing returns to scale (i.e. a benefit to cooperation) so that people working together can produce more than one person could produce even working the same total number of labor-hours. All land, all resources, and the cooperative enterprise are owned by Society, so that if Individual does not trade with Society he can produce and consume nothing giving him the utility of a dead man:
Lazy: UL = UL[C=0, E=0]
Assume that people are rational, all trade is voluntary, and all the assumptions of the first fundamental theory of welfare economics (the invisible hand) hold, so that people will only make trades if they are better off than they would be without trading given their initial distribution of property. If there is no trade, Individual consumes nothing, and Society is just as well off as they would be if he did exist. Therefore, any trade Society makes will make Society better off than they would be if Individual did not exist, and there is no need to specify a utility function for Society. The invisible hand ensures also that Individual will be better off than his starting point, but because he begins at a lower starting point than he would have if Society disappeared (or if he had nothing to do with society under both of the two definitions above), there is no assurance that Individual will be better off than he would have been had Society never existed (or if they had nothing to do with each other).
Certainly, it is possible that two people in these circumstances could come to an agreement that is not exploitive, but there are several ways that society can exploit Individual. First, Society could offer Individual a job that provides a lower level of consumption than he would otherwise consume [C=0.9, E=1]. Second, they could offer him a job that gives him the same level of consumption but requires him to exert more effort than he would otherwise would [C=1, E=2], thus lowering the rate at which he converts effort into consumption and making him worse off given his laziness. Third, it is even possible for Society to exploit Individual while giving him a better effort-to-consumption rate (such as [C=4, E=2]), if they force him to work more hours than he would otherwise choose to work, and if the additional consumption is not enough to make it worthwhile for him to exert the additional effort demanded by society. For example if:
UL[C=1, E=1] > UL[C=3, E=2]
Society exploits Lazy despite offering him a better wage rate than he could generate working on his own.
Fourth, suppose Society requires Individual to work no more than he would in their absence and pays him at a better rate that he could generate on his own (such as [C=2, E=1]). Even then it is not certain that Society does not exploit Individual. It is possible that Society forces bads onto Individual that more than counteract the benefits of his added consumption. Individual is now exposed to the stress of having to keep and hold a job in a market economy; he faces the fear and uncertainly of losing that job; he faces the humiliation of having to submit to a boss; he might have to live in a dangerous neighborhood; he might have to breath polluted air. In short there are many possible bads [Bi] that might be thrust on Individual by Society. In terms of utility, if,
UL[C=1, E=1] > UL[C=2, E=1, Bi]
Society exploits Individual despite allowing him to consume more goods and asking him to exert no more effort than he would if they did not exist. Of course, Society might give Individual nonmarket goods as well, such as social interaction, but if we are not allowing Individual to claim social interaction as his contribution to Society (Widerquist 2001b), it is rather inconsistent to allow Society to appeal to social interaction as their contribution to Individual. Thus, we have seen at least four ways in which a social obligation to work can cause Donselaarian exploitation.
The person exploited need not by Lazy, he could be completely crazy and willing to work extremely hard, but unsatisfied with the type of job opportunities available to him under the current social arrangements. There could be a very hard-working person who wants to live in the woods like Thoreau, or a hard-working group of individuals that would prefer some cooperative social arrangement among themselves rather than the market opportunities offered them by society. People with such preferences cannot enjoy them in a society with a social obligation to work in a given economic system unless they first work for society for many years even to earn enough to purchase their per capita share of the land natural resources they would need. Clearly that transaction makes Society better off and that group of individuals worse off than they would have been if the other did not exist: The obligation to work causes Donselaarian exploitation.
The pre-trade starting point in any industrialized society with a social obligation to work, whether it be capitalist, socialist, or anything else, is many thousands of dollars below the starting point of an individual (or group of individuals) who lives on his own and works only for himself. Even if basic income recipients do not end up contributing to the cooperative project as conceived by the larger society, UBI can give them some ability to create the kinds of social arrangements they would like to create if society hadn’t already appropriated all the resources.
To prevent society from exploiting individuals in the Donselaarian sense, we would have to make sure that everyone’s pre-trade starting point is at least as well off as it would be if everyone else did not exist. But given all the possibilities of preferences individuals might have for resources, society simply couldn’t afford to do that. There may be some people with radical ideals for whom no amount of compensation will make up for not being able to live in a society with their preferred economic system. The highest sustainable basic income may be the least-cost alternative. Even a generous basic income would not make such a person better off than he would be if the others did not exist, but if he chooses not to work then at least society is not benefiting at his expense and so they are not exploiting him.[6]
Nozick (1974) argues that the post-trade opportunities provided by the capitalist system are so much better than anything possible under any other social arrangement, that there is no need to compensate anyone. If the post-trade opportunities offered to individuals by society are so much better than anything individuals could achieve on their own, why is it necessary to make individual’s pre-trade starting point so much worse than it would be if individual’s lived on their own? An unconditional basic income of at least subsistence level is a check on society’s claim that all individuals benefit from contributing to social cooperation, and thus it is necessary to limit the possibility that society will exploit its least advantaged individuals. Without a UBI, the least-advantaged individual must accept whatever job society offers with whatever pay and whatever working conditions. She essentially has no self-ownership, not merely by circumstance but because society has appropriated all the resources she needs to be self-sufficient without compensating the individual for that loss.
An essential misconception in the writings of proponents the obligation to work, such as Van Donselaar (1997, etc.), Stewart White (), and others, is that they think of the economic system as a cooperative enterprise that benefits everyone. Any economic system is one possible type of social arrangement that benefits primarily people who like that arrangement better than any other possible arrangement. The belief that everyone can be better off with one type of arrangement than every other is absurd. Any system benefits some the expense of others. A good system benefits the greatest possible number and harms the least, but to ensure that it does so, participation in the economic system must be voluntary and those who do not benefit (or who do not perceive that they benefit) must be compensated unconditionally. These two propositions (voluntary participation and compensation) point inevitably at an unconditional basic income. Participation is voluntary if people choose it over unconditional compensation.
Part 4: Extending UBI beyond the least advantaged
One could argue that there should be an unconditional income only for those with the least advantages. Using the Donselaarian standard of exploitation, it is not how much money a person is capable of making that makes him advantaged, it is how much he would enjoy some other social arrangement (those with the most expensive tastes). Somewhere there may be a well-off lawyer who would be much happier in a surfer’s utopia. If so, and if his work benefits his employer or his clients, he is the victim of Donselaarian exploitation, and can claim a work an income that is not conditional on a work requirement. However, certainly there are many people who do not prefer some other social arrangement to the current arrangement, but who might prefer living off a basic income to working for society. Does an unconditional basic income allow this group to exploit others even as it prevents some others from being exploited? There are three positive reasons to favor a universal, unconditional basic income.
First, the least advantaged person has an option available to him that the next-least person wants but does not have, the next-least advantaged person becomes the least advantaged. The essential problem involves different preference orders over three alternatives: 1) a Job, 2) living off UBI without any employment or participation (abbreviated as UBI), and 3) he best opportunity under some other social arrangement that has been made impossible by the appropriation of resources by society (abbreviated as Other). Examine the six possible orders of preferences:
1 Other > UBI > Job
2 Other > Job > UBI
3 Job > UBI > Other
4 Job > Other > UBI
5 UBI > Job > Other
6 UBI > Other > Job
1 UBI is partial compensation from lost opportunities. She will not work if UBI exists, but will not be as well off as she would have been had society not existed.
2 UBI is not enough to prevent his being exploited by society. She will work and be exploited.
3 She will work and will not be exploited by society.
4 He will work and will not be exploited by society.
5 Even though she prefers a job to the options she has lost due to the appropriation of resources by society, she prefers UBI even more and so will not work. This is a Donselaarian exploiter. The only way she could stop exploiting society would be to get a job. But as long as she places some value on the assets that are not available to her, she does not abuse her rights.
6 Even though she prefers her missing options to a job, she likes UBI even better. Although she (like 5) has been overpaid for what her lost other options and exploits society, taking a job would make her the victim of exploitation. The only way for her to stop being an exploiter without becoming exploited would be for her to insist on receiving a lower UBI payment. (She could give the excess to charity but only so long as she does not enjoy giving money to charity.)
UBI does not affect the exploitation status of people with preference orders 3 and 4.[7] UBI may help or harm people with preference order 2, but it does not make the difference change the fact that they are exploited by society. They may or may not be net recipients of UBI, and they may or may not benefit from the added bargaining leverage UBI affords them, and thus it would be quite hasty to enforce a social obligation in the name of helping this person. There may be no way society can stop exploiting such a person without either disappearing or allowing him to exploit them. UBI gives such a person all the options society is capable of giving him without exploiting anyone else. People with preference orders 1 and 6 seem to be the most deserving of UBI—1 is under-compensated and 6 is overcompensated for losing their other options—but both prefer their other options to the options offered them in the industrial labor market. Preference order 5 seems to be the problem: She prefers working under current social arrangements to any other social arrangement but she prefers UBI to working.
The argument that 5 deserves a UBI is that if we give a basic income to 1 and 6, and free them from any work requirement, 5 becomes the least advantaged person in society. 1 and 6 have a privilege that she wants but is denied. I have argued elsewhere (Widerquist 1999) that enforcing a work requirement for some and releasing others violates reciprocity. It seems intuitively unfair to say to 1 and 6, that because their job prospects are so bad, they will be held to no work requirement, while saying to 5 that she must meet any work requirement at all. Thus, the universal nature of basic income is justified by the lexigraphic principle. 1 and 6 cannot be fully compensated for their losses without making them better off than 5,[8] and thus the right must be extended to him as well. The right is, of course, extended to 2, 3, and 4 as well, but they simply do not want it.
Second, allowing the least advantaged person to live without contributing without allowing another the same option could make the least advantaged the unwitting exploiter of the next-least advantaged. Return to the example in which work is a cooperative enterprise (as in part 3) and Crazy, Lazy, Hippie exist together. Suppose that the land-use arrangements of the cooperative enterprise benefit Lazy but not Hippie. Hippie is awarded an income without a work requirement, but Lazy is not. Lazy’s contribution to the cooperative enterprise arguably benefits Hippie more than Lazy benefits from the use of land that Hippie would rather see preserved. Thus, Hippie exploits Lazy. But if Hippie is held to a work requirement, and is forced to contribute to a social arrangement that makes him worse off than he would be if Crazy did not exist, Crazy exploits Hippie. If we release both Lazy and Hippie from the work requirement, Lazy exploits Crazy. Thus, we have an exploitation paradox (Widerquist 2001a), if any Pareto-optimal economic arrangement allows someone to be being exploited by someone. Which is better? Again, leximin. If it is impossible to create a Pareto-optimal distribution that is free of Donselaarian exploitation, then it seems reasonable to make sure that the least-advantaged are also the least exploited. Only a universal, unconditional basic income, that frees everyone from being forced to do anything, can make the least advantaged the least exploited.
Third, an obligation to work can allow those with more desirable jobs to exploit those with less desirable. Imagine Natasha has the following preferences over the following alternatives: She prefers the best job in society to UBI, UBI to the worst job in society, and the worst job in society to his best option in any other society. Natasha can only get the worst job in society. Prince Andre has the best job in society. Suppose UBI is the highest sustainable UBI and the worst job in society is leximined, so that it is impossible for society to make this job any closer in desirability to the best job in society without making it a worse job, but even so, Natasha still prefers UBI to the worst job in society. Suppose if Prince Andre didn’t exist Natasha could take his job, and if Natasha didn’t exist Prince Andre would be worse off. Thus Andre exploits on a one-on-one basis Natasha even if Natasha is not exploited by society as a whole. We can’t make her exploitation any less while holding her to a work requirement, but we can release her from her work requirement. We can hold Natasha to the requirement to accept the best job in society (whatever she deems that to be) if it ever becomes available, but such a work requirement is rather like no work requirement. It seems rather strange in a lexographic setting, in which we would desire to make the least advantaged better off but cannot, that we would take away any options that might make the least advantaged better off on the fear that the least advantaged will exploit the more advantaged.
Part 5: Conclusion
To summarize, there is no logical connection between Donselaar’s definition of exploitation and the social obligation to work: Forcing people to work will not eliminate Donselaarian exploitation, it could punish people who are not Donselaarian exploiters, and it could actually cause Donselaarian exploitation. Thus, there is no assurance that a world with a social obligation to work will have less exploitation than a world without a work requirement, and a world with a work-requirement will make the least-advantaged the most likely to be exploited.
The arguments in this paper show that the concept of Donselaarian exploitation lends little support for a social obligation to work. But it does not show how Donselaarian exploitation can be eliminated. It has merely suggested that the best way to leximin exploitation would be a universal basic income. If the dangers are that either the poor might exploit the rich or the rich exploit the poor, perhaps it would be best to make sure that the least advantaged are also the least likely to be exploited. It is hard to believe that the least-advantaged worker could be better off in any other society than one with an unconditional basic income, which both acts as a subsidy for low-wage jobs and gives the worker the right to decline employment, and therefore the right to negotiated the terms of that employment. Even if society tries to be generous in the terms it lays down while holding the least-advantaged to a social obligation to work, it does not change the fact that the terms are set by society and that the individual has no choice but to accept them. If the primary goal is to maximize the freedom and self-ownership of the least advantaged, a basic income is the only reasonable option.
Bibliography
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Figure 1, Land Desired by
Crazy: If there were no one
else
on the island, Crazy would work all 4 units of land (signified by the
vertical
stripes).
Figure
2, Land Use of Lazy (or Hippie): If he were alone on the island, Lazy (or
Hippie)
would work only 1 unit of land (signified by the horizontal stripes) and
would level
the other 3 units vacant. To Hippie the vacant land would be a nature
reserve;
to Lazy it would be just unused land.
Figure
3: Equal distribution of land without trade.
Crazy’s land
Lazy’s
unused land (or Hippie’s nature reserve)
Land
Lazy (or Hippie) works
Figure 4, A Lockean distribution of
land: Lazy (or Hippie) works
1
unit of land; Crazy works 3 units.
Crazy’s
land
Lazy’s
land (or Hippie’s)
Figure 5, One possible distribution of land
without
Donselaarian exploitation: Crazy (or Hippie) works 3.5 units of land, 0.5 units are kept
undeveloped as a nature reserve.
Land
worked by Crazy (or Hippie)
Hippie’s
Nature reserve