Equity: In Theory and Practice.

• Author: Kuenne, Robert E.

Among other stimuli, recent national and international policy developments are impelling economics, somewhat reluctantly, back toward its pre-Marshallian roots in political economy. The suitability of an economic mechanism for a given society, and the bounds within which it is permitted to function, are increasingly seen to be determined by the three E's: efficiency, equity and ethos. In its decision making, does it meet or approximate well-known Paretian or second-best criteria? Are the principles and processes of its distributive apparatus perceived to be "fair"? And is there a consensus that its structure and functioning conform to the society's ethos - the core of values, beliefs and institutions that shape the collective consciousness? Recent events, from the attempted social conversions in Eastern Europe to the domestic debate over health care reform, have forced economists to enlarge their almost exclusive concern with the first of these to include the latter two.

Professor Young's book is a welcome introduction to the commonalities of issues raised by these recent departures. It is a concise, clearly written explanation of the alternative principles of equity in practical and topical contexts, applied to such problems as the priorities for discharge from the armed forces under demobilization; the choice of recipients for scarce organ transplants; apportionment of a fixed number of legislative seats among political subdivisions on the basis of equal representation; the choice between proportional and progressive income taxation; division of the costs of multipurpose facilities among the several functions; and the division of inheritances among just claimants when assets fall short of the sum of their claims. A 41 page mathematical appendix provides formal derivations of theorems discussed informally in the text.

Young's concern is with what he calls "equity in the small" or "macro justice": solutions to everyday problems as distinguished from the goals of social philosophers seeking to establish basic principles for sharing the fruits of social cooperation. The latter are seeking the basis in justice for the assertion of claims, while Young begins his analyses by assuming that the demands of his claimants are valid in justice without probing further into the principles of validation. His theoretical orientation, therefore, approaches that of Intuitionism: the rejection of a belief in the existence of a broad set of deduced principles...