On Kolm s Theory of Macrojustice

On Kolm s Theory of Macrojustice

Claude Gamel Michel Lubrano Editors On Kolm s Theory of Macrojustice A Pluridisciplinary Forum of Exchange 123

Editors Professor Claude Gamel GREQAM-IDEP Université Paul Cézanne Centre Forbin 15-19, allée Claude Forbin 13627 Aix-en-Provence Cedex 1 France claude.gamel@univ-cezanne.fr Professor Michel Lubrano GREQAM-CNRS Centre de la Vieille Charité 2 rue de la Charité 13236 Marseille Cedex 02 France michel.lubrano@univmed.fr ISBN 978-3-540-78376-3 e-isbn 978-3-540-78377-0 DOI 10.1007/978-3-540-78377-0 Springer Heidelberg Dordrecht London New York Library of Congress Control Number: 2010937679 c Springer-Verlag Berlin Heidelberg 2011 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: WMXDesign, GmbH Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)

Discourse ethics rests on the intuition that the application of the principle of universalization, properly understood, calls for a joint process of ideal role taking.[.....] Under the pragmatic presuppositions of an inclusive and non-coercive rational discourse among free and equal participants, everyone is required to take the perspective of everyone else, and thus projects herself into the understandings of self and world of all others; from this interlocking of perspectives there emerges an ideally extended we-perspective from which all can test in common whether they wish to make a controversial norm the basis of their shared practice; and this should include mutual criticism of the appropriateness of the languages in terms of which situations and needs are interpreted. In the course of successively undertaken abstractions, the core of generalizable interests can then emerge step by step. Jürgen Habermas (1995). Reconciliation through the public use of reason: Remarks on John Rawls s political liberalism. The Journal of Philosophy 92 (3), pp. 109 131.

Foreword This is a book about both economics and philosophy. It should be read by both economists and philosophers. As Serge-Christophe Kolm himself writes on page 38, the association of economics and philosophy... is not only a laudable (and probably too rare) aspect of scholarship: it is... simply unavoidable for making sense and progress. Indeed, he argues that we should make no distinction between the two fields. This is a book about a book: Kolm s Macrojustice, published in 2005. In philosophy, it is common for there to be books about books. In economics, it is rare. In part, this is because economists write books less frequently, and books play a smaller role in the economics profession. This is, in my view, much to be regretted. Original ideas in economics today are communicated scientifically through peer-reviewed journal articles. This is in many respects an admirable format, but in my view it has serious limitations. The analysis has to be presented in a circumscribed form, often without a full exploration of the underlying assumptions. Within the compass of an article, it is not usually possible to draw out the inter-connections with other branches of the literature or with other disciplines. In writing a book, an author has both the opportunity and the challenge of presenting ideas on a broader canvas. This challenge is one to which Serge- Christophe Kolm and the authors of this volume have risen magnificently. Macrojustice is a tour de force, giving centre place to the concept of equal labour income equalization (first developed by Kolm many years ago) and demonstrating its power and reach. The present volume brings together the author of Macrojustice and some of its first and most attentive readers in a highly productive interchange, which is essential complementary reading. In part, the absence of this kind of volume in economics reflects the fact that today s economists are less likely to read books. This brings me to a central issue. I have said that the book should be read by economists, but how can this be ensured? It is not just the format but also the subject matter that is unfashionable. As an undergraduate, I studied courses on vii

viii Foreword welfare economics, whose dull treatment of issues such as compensation tests would have been greatly enlivened by the present volume. But these courses are no longer taught, and the idea of economics as a moral science has been lost from sight. All that I can say is that the present volume offers a wonderful antidote. Every student should be required to read the Introduction. They will then be convinced as to why we should debate the theory of macrojustice. Tony Atkinson Nuffield College Oxford and London School of Economics

Contents 1 Why Should We Debate the Theory of Macrojustice?... 1 Claude Gamel and Michel Lubrano Part I The Macrojustice of Serge-Christophe Kolm 2 General Presentation... 35 Serge-Christophe Kolm 3 Economic Macrojustice: Fair Optimum Income Distribution, Taxation and Transfers... 69 Serge-Christophe Kolm Part II Philosophical Aspects of Macrojustice 4 ELIE and the Emotions Related to Social Recognition...133 Pierre Livet 5 Basic Income and ELIE Transfers: Argument for Compatibility Despite Divergence...145 Claude Gamel Part III Economic Analysis of Macrojustice 6 An Axiomatic Study of the ELIE Allocation Rule...189 François Maniquet 7 An Exploration of Incentive-Compatible ELIE...207 Laurent Simula and Alain Trannoy ix

x Part IV Combinations of ELIE with Other Targeted Transfers Contents 8 Is ELIE a Wasteful Minimum Income Scheme?...235 Erwin Ooghe and Erik Schokkaert 9 ELIE-Minating Poverty? Limits of the Mechanism and Potential Improvements...257 Alain Leroux and Justin Leroux Part V Econometric Evaluations of ELIE 10 The Redistributive Aspects of ELIE: A Simulation Approach...275 Michel Lubrano 11 The Trade-off Between Growth and Redistribution: ELIE in an Overlapping Generations Model...305 David de la Croix and Michel Lubrano Part VI Selective Comments by Serge-Christophe Kolm 12 Macrojustice in Normative Economics and Social Ethics...341 Serge-Christophe Kolm

Contributors David de la Croix IRES and CORE, Université catholique de Louvain, Louvain-la-Neuve, Belgium, david.delacroix@uclouvain.be Claude Gamel GREQAM-IDEP, Université Paul Cézanne, Centre Forbin, 15-19 allée Claude Forbin, 13627 Aix-en-Provence Cedex 1, France, claude.gamel@univ-cezanne.fr Serge-Christophe Kolm EHESS, CREM, 20 Rue Henri-Heine, 75016 Paris, France, serge.kolm@wanadoo.fr Alain Leroux GREQAM, Université Paul Cézanne, Centre Forbin, 15-19 allée C. Forbin, 13627 Aix-en-Provence Cedex 1, France, alain.leroux@univ-cezanne.fr Justin Leroux HEC Montréal, CIRANO and CIRPÉE, 3000 chemin de la Côte-Ste-Catherine, Montréal, QC H3T 2A7, Canada, justin.leroux@hec.ca Pierre Livet Université de Provence, CEPERC, 29 avenue Robert Schuman, 13621 Aix-en-Provence Cedex 1, France, Pierre.Livet@univ-provence.fr Michel Lubrano GREQAM and CNRS, Marseille, Centre de la Vieille Charité, 2 rue de la Charité, 13236 Marseille Cedex 02, France, michel.lubrano@univmed.fr François Maniquet CORE, Université catholique de Louvain, 34 Voie du Roman Pays, 1348 Louvain-la-Neuve, Belgium, francois.maniquet@uclouvain.be Erwin Ooghe Department of Economics, UCBrussels and KULeuven, Belgium, erwin.ooghe@econ.kuleuven.be Erik Schokkaert Department of Economics, KULeuven and CORE, UCLouvain, Louvain-la-Neuve, Belgium, erik.schokkaert@econ.kuleuven.be xi

xii Contributors Laurent Simula Uppsala University and Uppsala Center for Fiscal Studies, Department of Economics, 75120 Uppsala, Sweden, laurent.simula@nek.uu.se Alain Trannoy EHESS and IDEP-GREQAM, Centre de la Vieille Charité, 2 rue de la Charité, 13236 Marseille Cedex 02, France, alain.trannoy@univmed.fr