Equality of opportunity ¢â¬â a follow-up to Don Arthur

The debate started by Don Arthur (Is bad Peter Saunders a neo-conservative?) has been very interesting and helpful (my particular thanks to Don for developing the distinction between the Hayek and Saunders positions). But as the subsequent discussion has branched out into equality of opportunity (which is the main focus of my interest as a social democrat and my recent Australia Institute paper), I want to clarify my position on some of the issues discussed.

Firstly, I agree with Peter Saunders that Australians do care a great deal about equality of opportunity and that if the community perception should grow that it is all a myth, it could undermine the legitimacy of the policy process. As Andrew Norton says, “it is about how the mass of people perceive their society and their own place in it”

Secondly, my definition of equality of opportunity is not synonymous with what Peter calls ‘meritocracy’

To Peter, a meritocratic society is one where “people’s incomes depend on how hard they work and how talented they are” (Policy Autumn 2004). All it requires is an absence of officially sanctioned or condoned discrimination, a ‘basic’ level of social security and impersonal markets which give equal weight to the individual preferences of consumers, workers and employers and where success is largely determined by an open competitive process.

By contrast, in my AI paper I define substantive equality of opportunity (SEOP) as a situation where everyone is able to develop their full potential irrespective of the original circumstances of their birth and childhood and where a person’s economic prospects are determined overwhelmingly by their own ability and character. This differs fundamentally from meritocracy in two ways.

One is that it takes a longer term perspective. Meritocracy is about ensuring the best person wins at any point in time. But SEOP is also concerned with risk factors and handicaps in early childhood and teenage years. While it too embraces meritocracy, it looks backward at the situation before the competition starts in the labour market (i.e. before the individuals get to the starting gate). That is, SEOP wants to ensure not only that selection for superior jobs is based on objective qualifications but also that all citizens have had an opportunity early in life to become qualified for these superior jobs. It thus looks at opportunities over a lifetime, not just at a point in time.

Another difference between meritocracy and SEOP is that in the former case governments are only expected to minimally intervene to deter overt or covert discrimination. By contrast, under SEOP, governments would be expected to actively intervene to ensure that as children, citizens are not unduly impeded by lack of parental wealth, status and power from achieving their full education potential and as adults, citizens are not impeded by location, inadequate access to training and skill-enhancement, poor access to health and housing or poor networking from achieving their full employment potential.

A policy framework built on SEOP would allow considerable earnings inequality in the market place (before taxes and transfers) because children inherit genes from their parents and grow up with different attitudes to risk and work. But the inequality would not be due to structural factors such as parental resources at birth or inequalities of access to important public services such as education, health care, housing and employment opportunities.

These structural barriers are very important. Some recent research on twins and on adopted children concludes that while heredity defines the limits of intelligence, experience largely determines whether these limits will be reached – and experience in early family environment is at least as important in predicting future intelligence and socio-emotional abilities (such as motivation, perseverance, tenacity and self-discipline) and hence future market success. It is these inequalities of family opportunities early in life, as well as of access to key public goods later in life, which SEOP programs seek to diminish as far as possible.

Thirdly, I accept that perfect equality of opportunity (whether in Peter’s narrow or my broad sense) is impossible to achieve. Indeed I say in my paper that “because of differences in inherited wealth, human aptitudes, luck and location advantages, there will always be some unavoidable differences in opportunities for upward mobility. Nor is full mobility necessarily optimal if it proves disruptive. Realistically therefore, Australia must expect to live with significant deviations from perfect equality of opportunity”.

So the only policy issue is how much closer governments should be trying to get to equality of opportunity. Peter Saunders says “we’ve done enough” (partly because of how he defines meritocracy). I say that there is much more to be done. My argument rests on two grounds. One is the evidence my AI paper assembled of existing inequalities of employment, education, health, housing and public transport in Australia. My second argument is that as the US has lower levels of income mobility than most other developed countries (especially the Nordic and smaller European countries) and as, on current policy trends, we are going down the US path, the outlook for Australian mobility is not reassuring.

But in the end it is all about one’s values.