On fairness and inequality

In modern capitalist societies, a certain degree of inequality is necessary, and even welcome. But Will Hutton argues, in an interview with The Browser, that soaring rewards for the few at the top requires us to formulate a new social contract. When asked to give a critique of the capitalism we're living with now, he responded:

The apologists for today’s capitalism have a series of theories which at a high level of abstraction are about markets always working optimally. What sits behind those theories is a belief system that the way markets work, and the way life works, revolves very much around the principles of Darwinian natural selection. That capitalism is about survival of the fittest, and hunter-gatherers pursuing their own interests individualistically.

My critique is that this doesn’t describe the world of hunter-gatherers, doesn’t describe how Darwin conceived of natural selection, and more importantly doesn’t describe how actually a contemporary capitalism works and how it has an ongoing legitimacy. My argument is that capitalism delivers its best when it respects some very deeply held human views about the way reward and punishment should be distributed. It should be proportional, and it should have a profound relationship to effort and contribution – what David Miller, one of the authors of the books I have chosen, calls due desert.

(Video: In a keynote interview at Research 2011, Will Hutton, author of Them and Us, discusses how public opinion views the issue of fairness.)