Conservatives and Fairness

Why the Tories are now the party of fairness
Daniel Finkelstein

The itch to reciprocate is hardwired in all of us. The Conservatives are trying to draw on this new understanding

I would like to offer you £5. You don’t have to do anything for it. It’s yours. A fiver, for nothing, take it or leave it. You would take it, wouldn’t you?

Not necessarily, it turns out. One of the most popular experiments in behavioural economics is something called the ultimatum game. One player is given a sum of money and asked to share it, giving some of their bounty to a second player. Player 2 can then choose — take the sum proffered, or leave it. If the deal is accepted, both players keep the share of the money they have agreed. But if Player 2 rejects the deal, then nobody gets anything.

The logic of the game seems simple. Whatever the offer, you would take it if you were Player 2. After all, why ever not? So if you are Player 1, you wouldn’t offer up much of your money. You don’t need to.

But the ultimatum game has been played many times and here’s what happens: if Player 2 is offered a miserly portion of the money — less than 30 per cent, say — he very often rejects it. He turns down money for nothing.

Conservatives have begun to use the word “fair”. A lot. It was one of the most frequently used words at the Tory conference along with “together”, and “Hurrah, they’ve chosen Ed Miliband”. And to some it sounded incongruous, like Mike Tyson entering a bar and ordering a Babycham. Incongruous, or simply insincere: a post-Tony Blair political land grab, trying to steal the language of the Left without really meaning it.

For years, a more natural Tory use of the word fair would come in the sentence “Well, life’s not fair”. A friend described working in No 10 in the 1980s and fishing out data for use by the Prime Minister that showed that people on supplementary benefit were in absolute terms slightly better off than in 1979. Whether they had fallen behind others was regarded as utterly irrelevant.

But the Tories learnt from the years of debate about fairness. Social studies and experience have shown that it isn’t just absolute prosperity that matters to people. Relative prosperity does too. It matters how you are doing compared with your neighbours.

The Conservatives, however, aren’t just passive recipients of the fairness idea. For while fairness has changed the Conservatives, the Conservatives can change fairness.

Conservatism is based on observation of human nature, of the way we act, of our achievements, our frailties and our failings. It is not an abstract doctrine, given to sweeping statements. But this means that as our understanding of human nature changes, so does Conservatism. And over the past 30 years, our understanding of human nature has changed a great deal.

In his influential book Natural Justice, the game theorist Ken Binmore expresses his exasperation at people who make great claims about what fairness is, pulling their definitions from the air. Professor Binmore argues that our sense of justice has its origin in human nature, and we can determine what is just and fair not by theorising but by observing how human beings, over centuries, have solved the problem of how to live together and how to iron out all the little disagreements between individuals.

The ultimatum game reveals that humans have an innate sense of fairness. In fact, neuroscientists have even identified a part of the brain that seems to be associated with it. Humans co-operate with each other because reciprocating favours proved a good evolutionary survival strategy. But in order for co-operation to work, favours have to be returned. So alongside our instinct to make friends and allies comes a keen sense about whether those allies are behaving fairly, whether they are giving back as good as they got.

In his party conference speech, David Cameron articulated the new Conservative understanding of fairness very well when he said that citizenship was not a transaction, it was a relationship. This is a complete explanation of the outcome of the ultimatum game. Participants assume that it is not a mere transaction — do it once, take the money, move on. They think of it as the beginning of a relationship, that they will be playing the game repeatedly. And they don’t want to get a reputation as an easy mark, or give the impression that a stingy offer from Player 1 was socially acceptable.

Thirty years ago, Conservatives would not have understood this sense of fairness. But now fairness is changing the Tories. Concern about the distributional effect of taxes and cuts, and the sense that those with the broadest shoulders should carry the greatest burden, owes something to the Liberal Democrats. But just as much to a new Conservative understanding.

But Tories can change fairness too. The Left has always had a rather rigid view of what is fair, one rooted in its old debates about financial equality, that doesn’t accord any better with human nature than the old right-wing view.

First, fairness is about process at least as much as outcome. Wildly different outcomes can result from a fair exchange of favours and a fair exchange is no robbery. Fairness is a sense, a feeling that is hard to measure. The idea that it is Victorian to distinguish between deserving and undeserving recipients of assistance is ridiculous. It is simply human to do so.

The claim of the tuition fees reform to be fair does not depend only on its treatment of less well-off students, but also on whether universities give students enough for their money. If it fails, it will fail because extra money did not procure a high-quality education. That wouldn’t be fair.

Conservatives also have a keener appreciation than the Left of the importance of loss aversion. Losing a pound you have is far more painful than being denied a pound you might gain in future. The Left often underestimates loss aversion, failing to appreciate that the strength of feeling excited by removing wealth and property from its owners may not be matched by the feelings of gratitude of those to whom the property is redistributed.

And Conservatives also understand that reciprocal relationships exist between generations, with favours passing from parent to child and back again. Inheritance tax offends voters’ sense of fairness, but the Left can never begin to see why. To a Tory, it’s obvious.

This debate about fairness — it’s not just a land grab; it’s not just about the coalition. It’s here to stay.

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