In chapter 4, we studied Marx´s vision of distributive justice; however, there exist more theories about this topic supported by different authors. These theories answer two main questions: What should be a fair distribution? What variables are the ones that matter?
First of all I would like to talk about Utilitarianism. In the classical view, Utilitarianism relates income with utility, and utility with welfare. It seeks to maximize the social welfare function [max W= ΣUi], resulting in an egalitarian solution. (equal marginal utilities for all). However, equalizing utilities increases W as long as we assume that everyone has the same utility function and that this function grows at a decreasing rate; in other words, that it is concave. If the utility is linear, it´s not easy to know which is the fairest Pareto Optimal. In fact, distributing when the utility function is linear makes no sense. This theory takes for granted that everybody has the same utility function; but in practice, does this really happen?
The other approach of Utilitarianism does allow different utility functions. This theory seeks to equalize total utility of individuals [Ut1= Ut2], giving more to the one who generates less utility. Under this approach, utility is no longer maximized. But, could not this generate perverse incentives to pretend that one is worse than it really is?
For Rawls, the variable that matters are the basic goods. His theory is governed by the maxmin principle: maximize the assets of the least. [maxmin (bi)] Equality is sought, but inequality is justified if the goods are assigned to individual in worst conditions. The fairest distribution will be the one in which the individual in worse conditions is better. One critic is that the variable goods is very objective, it does not pay attention to the use of the goods. For example, you can assign a bicycle to the individual in the worst condition, but what happens if this individual does not have legs?
The last theory I would like to comment is Varian´s, the Theory of Fairness. In a competitive market, an agent receives in the margin exactly what it contributes to the company. That is, the price of labor depends on the marginal product; however, the total income depends on the initial endowment. These initial endowments cannot be solved by the market alone; this is why the state needs to intervene more, to guarantee an initial equality. The market assigns efficiently, but does it do it fairly? Varian argues that one must enter the game with equal circumstances and opportunities, with an “even floor”, if later in the market process someone wins more that does not matter anymore. In few words, the government must take charge of the initial allocations while the competitive market of the final allocations. However, a fair allocation like this implies that inheritances and gifts are not allowed. But how feasible is this in real life?