Justice and self-interest

No. 29, 26 April 2006

by Guy Yeomans

The New Scientist magazine published on 5 Nov 2005 has an interesting article that complements a recent sermon I preached on ‘Mammon’:

Classical economic reasoning is typically based on the assumption that people are exclusively motivated by material self-interest. But in careful experiments researchers are finding that many people seem to care about the fairness and justice, as well as their own greedy interests.

Two decades ago, economist Werner Guth devised a simple game to explore human sharing behaviour. In his ‘Ultimatum Game’, an experimenter gives a person a sum of money on condition they share it with a second person. The first player makes an offer – any amount is possible – which the second either accepts or rejects. If the offer is accepted, both players get their money. But if it is rejected, neither gets anything.

Self-interest should lead the second player to accept any offer, no matter how small. But researchers have found that people across cultures [and ages, including children] care about more than self-interest. Typically, most people will reject less than 20%, while many ‘first players’ will offer half of the money. That is, most people care strongly about fairness.

Over recent decades, while the poor have definitely got richer, the gap between rich and poor has increased. For example, in the 1960s, CEOs of major companies averaged about 20 times the income of their lowest paid workers – that figure is now closer to 200 times!

The research indicates that when there is such inequality, even when the poor receive more than they had before, resentment builds and can result in anger or depression causing those affected to ‘drop out’, refuse to co-operate or become violent. That is one cause of political revolutions.

Interestingly, the abovementioned article also revealed a similar experiment with monkeys who also demonstrated a sense of fairness to others and became angry food was distributed unequally.

I agree with Sydney Morning Herald economics writer Ross Gittins that the free market economy has been a great boon to progress and one should be cautious about replacing it, given the abject failure of communist and socialist models.

But it does raise serious questions governments seem to ignore – surely if monkeys can work out what fairness is, we should expect our politicians, who are paid more than peanuts, to work it out too! How about writing to one and expressing your view on this?

Rev Guy Yeomans is pastor of St Ives Baptist Church, Sydney, and has an active interest in Ignatian spirituality. He is a former state Liberal MP.

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