Monday, July 7, 2008

Choice, Freedom, and Fairness

I like having options and enjoy being able to make my own choices about various things in life—what food I eat, who I associate with, how I spend my money, what jobs I want to work at. There are some people who don’t have the ability to make their own choices. They may live under a repressive government, be poor, disabled, or have some other restrictions placed on them. That doesn’t mean they don’t have any choices, it just means that they are more limited than what the rest of us have.

We are reminded, but not often enough, that failure to make a choice is actually making a choice. If you are faced with paying the house payment or paying for a new car and you elect to do neither because you can’t decide, you have made a choice.


“Freedom” is defined as the ability to make your own choices. If you aren’t allowed to make a choice, you don’t have freedom in that area of your life. In reality most of us have the freedom to make a “bad” choice that ends with a result that is too bad to even consider. In cases like that a person really does not have a choice. For example, you may have the choice of cursing out your boss, but the consequences are that you will lose your job.

Sometimes we abdicate our responsibility of choosing to someone else—like the Government. When we want the Government to take care of our medical care/insurance, for example, we give up a large part of our ability to choose. We instead ask the Government to choose for us. When we do that, many of us find that we do not agree with the choices that the Government makes for us. By abdicating our ability to make these choices, we have given away some of our freedom.

In many cases the Government will limit our ability to make choices (limiting our freedom) in the name of “fairness.” From a perspective of emotions, “fairness” sounds so simple and good to people. This is where we have lost focus in this country.

Fairness, to me, means the mutual agreement among all parties involved. This country was established on the idea that all people would have a fair, or equal opportunity, not a fair, or equal, outcome. Yet, some people, especially some in the Government, only see “fairness” resulting in equal outcomes. Even in cases when two parties agree on a contract (maybe a price for a good), the Government may restrict that choice in the spirit of “fairness,” saying that it is unfair to another supplier that the supplier you agreed to buy from was selling his goods or services for too little.

What may seem “unfair” in a single snapshot of time may actually be “fair” when looked at from a different perspective. For example, it may seem fair to take money from the rich in the form of taxes and give it to the poor in the form of many various credits, government programs and allowances. But, when viewed over the course of half a lifetime or more it may be easier to see how arbitrarily people may define what is fair.

Let’s take a look at an example case where we have two individuals (let’s call them Steve and Jim to keep track of them). Both of them graduate from high school together. They had the same grades, and they score very close to each other on the intelligent tests.

After high school, Steve decided to go to work at McDonalds to earn some money, which he spends on cars, beer, clothes and going out. Jim worked also, but he spent his money on tuition for college. While Steve was out on the lake in the boat that he bought on credit, Jim was taking night classes and working toward his degree. Both men had the same opportunities, but they made different choices. Steve chose to obtain immediate gratification by not only spending all that he was making, but also going into debt using credit cards. Jim took a longer view on things and decided to delay gratification and invest in himself.

A few years later Steve was still living the good life, but was several thousand dollars in debt. Jim now had a good job, but instead of buying new cars and a big house like Steve, he lived frugally and invested much of the money he was making into savings, IRAs, college funds for his kids and 401k’s. Again both men made the choices that suited them.

A few years later we see that the kids from both families are ready to go to college. Steve has no money to pay for them to go, whereas Jim is able to afford to send his kids to school. Steve scrambles to find ways to have other people pay for the education of his kids. In fact, some of the tax money that Jim is paying (Steve doesn’t make enough to pay taxes) goes to pay for college for Steve’s kids. Now the difference in incomes is starting to irk Steve. Why should Jim make so much money and he (Steve) is left with all of those bills?

Finally the kids are grown up. Jim’s kids have good jobs now, and are supporting themselves and families. But, a couple of Steve’s kids are back living with him since they can’t afford a place of their own. Steve’s family is in debt, so they can barely afford to pay the bills let alone continue to provide food and shelter for their grown kids (and grandkids?). Meanwhile, Jim is debt free and his college education is paying off. He is now making triple what Steve is. Not only has Jim’s standard of living increased dramatically over Steve’s, but he is maxing out his contributions to his retirement plans. Steve is bitter that things turned out the way they did. At this point Steve complains that it just isn’t fair that Jim is making all that money. (I wonder if Steve thought it was fair when he was boating and driving new cars and Jim was going to school and saving his money?) He complains that it’s wrong for Jim to make as much as he does. Sadly, Steve is in a majority of Americans who made bad long-range choices and are suffering financially, while Jim and a few others are living comfortably.

At this point, Steve’s definition of “fairness” has become has become skewed. They both had the same opportunity, yet through the choices that they both freely made, things ended up very differently for Steve and Jim. When people in various levels of government start agreeing with Steve, things get completely out of whack.

Most politicians give lip service to what is “good for the country (or state, county, or city). Instead, most of the time, their goal is to get elected. They look to satisfy the masses (voters) who, like Steve, are in debt, have smaller incomes, and are bitter about the way “life” has treated them. In the spirit of “fairness” they propose to simply take money from people like Jim and give it (after they take their cut) to people like Steve. How can anyone say that it is unfair to take money from someone who has so much and use some of it to help those who have so little? Given that instantaneous snapshot in time, that policy may seem very reasonable to many people. But the Government has now taken freedom from Jim, which is his ability to choose how to use money that he has earned.

Throughout their lives, both men had the same opportunities. They were free to make their own choices. In the beginning, Steve made choices that allowed him to live better than Jim for a few years. During those years no one, not even Jim, complained about the differences in lifestyles. No Government asked Steve to share his boat with Jim. But the choices they made turned out much differently in the long run. Steve’s life became difficult financially, but Jim’s became much easier. So how could it be unfair that Jim is successful and Steve is not? The answer is that it isn’t unfair. That is just the way it turned out based on each man’s decisions. Fairness lies not in the result, but with the opportunity.

Is this the concept of “fairness” that we want our Government to enforce? If so, what motivation do people have to think in the long term? Why not spend all you have (and more) now and then let the Government take from the rich and give it to you when you’ve reached the end of your rope? By not letting people fail in their choices, we cannot be “fair.” Life isn’t fair and Governments will not only go broke trying to make it so, but in the process they will create more inequity.