A Brief Introduction to Fairness Analysis

Abstract

This paper provides a philosophical analysis of a fundamental force
in human social activities, and thus a fundamental parameter of any social
system including economic system, which is fairness. A brief
explanation, through a simple deconstruction of the meaning and role of
fairness in our everyday social life, about the nature and importance of
fairness analysis in social studies is provided. This writing could serve as an
introductory discussion to the cultural transition from empirical investigation
to rational analyses for social studies including economic studies.

Key words

Fairness,
Analysis, Dynamics, Social, Economics, Analytic, Transition

1.     
A
brief background

Human civilization is the outcome of three different types of
interactions: interactions among human beings, interactions between human
beings and inhuman objects, and interactions among inhuman objects. Even at the
age of super cloud computing, it is clear that the most meaningful part of
human civilization is created through interactions among human beings. Even for
those great master artists who produced their master pieces mainly through
their private personal work with inhuman objects, we could always identify the
connections with other human beings that have helped to bring those works to this
world. After all, human beings are social beings so that no one could live a
life without counting on interactions with others.

It is human interactions that introduce the meanings of morality,
politics, culture, folk tradition, and economy, for which we have established
the common moral standards, political knowledge and social political systems,
cultural expressions and traditional etiquette, as well as practical and
theoretical economic systems. Accordingly we have also developed correspondent
vocabularies for us to understand and judge historical and present personal and
social events, to explain why who and who did or do so and so at sometime and
somewhere, and to make guesses or predictions about what might happen in the
future. With the help of these vocabularies we have also created great works in
philosophy, literary and arts, and other social and cultural areas. However,
compared to scientific languages used in the natural domain, our vocabularies
in the social domain have so far failed to help us to comprehend the dynamic
causes behind the apparent social values. For example, we are all familiar with
the dark side of this world based on personal experiences, media news, and
literary stories, and we are all eager to learn how to fight against the social
dark side, we might even go further trying to understand how poverty or human
greedy and injustice produce the social dark side, but we normally would not
dig deeper to see how various factors including our own behavior contribute to
the cause of producing those dark side. This is not simply an issue of lack of
diligence or courage but more importantly is the consequence of lack of proper
vocabularies. More precisely, it is not because we don’t have the necessary
words or phrases in our vocabularies, but because our way of using the words
and phrases in our languages have not been organized to form the proper system
to handle the complicated social dynamics of this world. 

This would inevitably lead to the shallowness of human
understanding about our own society, which could be seen in the views and
comments about history as well as debates for the present and future. Why after
thousands years of cultural evolution our knowledge about our own
social nature is still limited to the surface level by our vocabularies?
One important reason for this is that we have been focusing our attention
to the relatively isolated colossal social behavior of collective or individual
entities instead of the interactions between those entities. For this reason,
what we are facing to in the social domain today is like what people in the
natural domain were facing to before Isaac Newton introduced the laws of forces[1]as the foundation of natural science about three
centuries ago. This lag of centuries between social science and
natural science is mainly due to the fact that we could not simply apply the
laws of natural forces in our understanding of social phenomena. We need
instead to find the counterpart of natural force in our social domain, which is
fairness as I would introduce in this writing. Obviously, this newly introduced
fundamental force (fairness) for us to understand the dynamics in the social
domain is nothing new or strange at all to all of us; however, it is not
something well understood by most people either.

Market
economy could be the best subject area for introducing fairness analysis
because of the central role of fairness in market economy. Market economy might
be considered by many as not only the most complicated but also the most
sophisticatedly developed field in the social domain. Not only is it closely
related to our everyday life but it also has helped to produce a multitude of
Nobel Prize laureates. Since market economy is a game driven by interest based
free wills, like in any other games played by people across the world around
history, fairness is not only admirable but also demanded by most players in
the game. Even those who do not respect the fair rights of others would also
demand not to be treated unfairly whenever they cannot control the game.
Therefore, the fundamental spirit of the game of market economy is fairness.
Ironically, if we examine how the concept of fairness is used in academic
literature or everyday life very carefully, we might find that the meaning of
fairness is far from clear to people around the world.

If we
attempt to anatomize any social standard of fairness, we might find that people
have been constructing their standard with many specific conditions for any specific
given subject. For example, a state-wise math test would be assumed to be fair
in the sense that no student would know the questions in advance and everyone
would be allowed the same length of time using similar tools to answer the
questions during the test, plus the environment for all would be roughly the same.
Those are the conditions on which the fairness of the test is constructed.
However, if we deconstruct the foundation of this fairness of test by looking
outside the isolated testing area and examining the fairness in the real life
open society, then we might find the test is not really as fair as people might
have imagined. First but not the last, no matter how carefully the questions
are selected, it could not possibly cover all the teaching patterns in all the
classes across the state, and thus some students might be more familiar with
the subjects than others simply because their teachers have given them more
exercises on the subjects by accident. There could be much more similar factors
which would make the test not fair as they seem to be. Would this type of unforeseeable
unfairness matter to the students? Of course it would, in this way or that way.
But since this kind of unfairness seems unavoidable, people would tend to
attribute it to something called luck.
Nonetheless, not all the unlucky things
are truly unavoidable. For example, if two test centers are located in two
different places, one is quiet but the other is noisy, and one is with
comfortable inner atmospheric condition but the other is freezing during the
winter, then even though people could still extend the meaning of luck to their locations, it might not be
the kind of luck that people cannot
change it.

An open
market system would be influenced by much more complicated factors than a
single test event discussed above, and thus fairness would play a much more
dynamic role and its impact upon whomever live and work in the economic system would
be much more serious; yet the meaning of fairness for market economy is not as
clear as most people might have thought either. Since fairness is not only the
assumed precondition of a market economy but also the goal of any formal
economic theory (at least in principle), the lack of understanding of fairness
would no doubt be manifested in theoretical endeavor on economic issues. While
scholars are struggling to promote more effective as well as fairer economic
solutions, they might actually help to create polarized and thus ineffective
market environment due to the lack of the understanding of fairness, which have
happened many times during the history.Therefore, a better
understanding of fairness is warranted in order for us to create a fairer
economic system. However, once we start to investigate the meaning of fairness
more carefully we would soon realize that fairness is not just a simple social
standard, but indeed a fundamental driving force behind all human social
activities, including economic activities. In order to acquire a full
appreciation of what fairness is, we need a dynamic analysis of interactions between
social elements (persons, organizations, and abstract cultures) in a way similar
to what natural scientists have been doing for the past few centuries, but (unfortunately)
without the handiness of a formal mathematical framework that natural
scientists could enjoy.

2.     
The
role of fairness

As we just
saw in that math test example, to get a better understanding of fairness might involve
a deconstruction of specific conditions in question and then bring in a full
scale social and cultural inquiry. On the other hand, however, judgment about
fairness always starts from very specific issues which might have immediate
consequences in real life, such as corporate promotion, social wealth distribution,
job opportunity decision, etc. More importantly, human awareness of issues of fairness
in various events of their life would cause some urges for them to say
something or do something for the change of what they might considered as
unfair; or even if they don’t feel the courage or don’t bother to take the
trouble to meddle in the unfair business of others, they would still choose to
do whatever considered to be fair to themselves whenever possible. From this we
could see the duality of fairness: fairness
as the result of actions and fairness as the driving force to actions.
Because of this duality, fairness functions as both a judge of the game of life
and a player in the game. More precisely, fairness is not simply a concept of
political or moral standard of a society but also a fundamental force of
everyday life similar to the natural force Newton studied three centuries ago[1].

When we
drive a car running on a highway, no matter how expensive the car is and how
powerful the engine is, as we know according to our modern scientific knowledge
that the car is always being pushed forward by the same friction force between
the tire and the ground; besides, what is moving along is a colossal assembly
of large quantity of tiny parts and each tiny part is being pushed (or dragged)
forward by the total force from its neighboring parts or is undergoing chemical
and electronic interactions. Similarly, even though there might be so called
great social powers or very marvelous moments in this world, if we keep
deconstructing the factors that build the social powers or create the big
moments, we might at least for most of the time end up with the very same
interactive forces between human beings, and those interactive forces are all
regulated by the same principle of fairness behind just like the interaction
between material parts are regulated by the same Newton’s laws at macroscopic
scale.

Owing to the
successful work of natural scientists for the past centuries, we could now
understand very well the full scale dynamic complicacy of material objects and
systems around us in natural world; and due to the solid theoretical foundation
of natural science, today when we enjoy our convenience of industrial artifacts
we could have high level confidence in the technology behind the production.
However, on the contrary, we don’t have the same level of confidence in the
data or the interpretation of data from economic studies. The main reason of
this is indeed neither because people don’t take economy as serious as natural
sciences nor because nowadays people don’t invest huge quantity of capital in
potent electronic means to gather and process economic data, but because it is
much more difficult to achieve the same technological maturity in the social
domain as in the natural domain.

About four
centuries ago before Galileo (or Stevinus) legendarily dropped two metal balls
down the Pisa Tower[2],
natural scientists were facing a very uncertain world similar to what we are
facing today when dealing with the social issues. But natural scientists have
overcome the uncertainty and constructed the scientific edifice since then.
There are two important means that have helped them to achieve this: one is the
experiment in controlled environment, another is the abstract analytical
thinking based upon knowledge of interacting forces between material objects.
The second one is even more important than the first one since without abstract
analysis, there would not be much meaningful controlled experiment.

We might
certainly blame the open nature of any realistic economic system for lacking
the controllability that natural scientists might enjoy in their labs. But on
the other hand we might also need to reexamine whether we have pushed our
analytical work far enough to help us better understand the social world as it
should be. As a matter of fact, in the domain of social sciences including
economics, so far throughout the history, the knowledge system has not been
properly reflecting the interactions between the basic units of the system---
human beings. Rather, social theories including economic theories have been
constructed on top of collective concepts like moral standards and legal rights
and penalties or inhuman numbers like market transaction data. For this reason
people are fundamentally depending upon common senses and empirical knowledge
to handle everyday social events without much abstract analysis about the
nuances of human interacting dynamics even though this dynamics would indeed
determine the development of the events. 

One typical
consequence of this lack of dynamic insight of social mechanisms in economic
studies is the obvious detachment of economic data from the cultural
environment from which those data are produced. Even though not too many
nowadays people would naively deny the influence of political cultural
development of a society upon its economic well being, scholars are not able to
relate them together in a sensitive way except for their personal judgment
based on some eye catching big events or some histogram variation trend. Financial
analysts forecast the possible rise and fall of market prices based on
statistics of historical data and foreseeable big social or technological
events without much knowledge about what kind of undergoing cultural movements
are causing tomorrow’s rise and fall. It is assumed to be the responsibility of
historians to dig out subtle cultural influence upon political and economic
status of real life afterward while nobody really knows or cares about whether
or how historians would do the job correctly. Therefore, it is not hard to see
the reason why supposedly sophisticated economic theories developed by elite
scholars in the field could lead to many economic crises in the past.

The fact
that the coarse-grained knowledge about underlining cultural forces has
hindered the development of more rational social theories including economic
theories could remind us that we are facing a similar challenge as people in
the age of Galileo were facing for studying nature: how to make a transition
from empirical world into an analytic world. The answer should be to bring
social sciences including economics down to the ground of interactive forces
between basic social units---human beings. Only in that level we might conduct
more sensitive bottom up investigations about human social system including
economic system in a way similar to what natural scientists have been doing
towards the inhuman world. In order to do so we need the help of fairness
analysis since fairness is the key to understanding the apparently dazzling interpersonal
forces. Even though we should not unrealistically expect that we might pull out
a highly analytical system for social sciences like the one for natural
sciences, we still could make changes, radical changes, in the study of social
problems including economic problems with the help of fairness analysis.

3.     
Fairness
analysis and the challenges

Fairness
analysis is a methodology or a philosophical way to examine human civilization
based upon interactions between human beings with the help of abstraction of
the force of fairness[3].
Because fairness analysis is aiming at the general nature of low end
interpersonal interactions, unlike any existing theories of social sciences, it
thus does not depend upon traditional moral standards or political norms; rather
it could be used to analyze or deconstruct existing cultural concepts and
social structural norms such as freedom, leadership and so on across cultural
and geopolitical boundaries. For example, it is a common assumption that free
market economy is fair. Someone might deduce furthermore based upon that
assumption that the bigger the market size would be the fairer the market would
be since the benefit of the mechanism of free competition could be fully
exploited with a bigger market. With that kind of mindset people would feel
very confused when they saw things like global financial crises happened during
past decades when the market was tremendously enlarged. But with fairness
analysis, we might look into the real market logic in more details by deconstructing
the presumption of fairness in free market economy. Once we do so we would then
realize that the fairness assumption that people made about the free market
economy was not much more sophisticated than the assumption people would make
in the math test example we discussed above. Through the fairness analysis we
might even discover some root cause of the global financial crisis: while it
would inevitably involve some unfair factors from the real life open world into
the assumed fair market system and those unfair factors would inevitably cause
real life economic crises if they are not properly curbed, people have just
ignored the existence of these unfair factors by assuming that the market was
fair because they were not aware of the importance of fairness analysis.

On the other
hand, even though fairness analysis would help social scholars to acquire a
dynamic insight of social systems such as economic systems, compared to natural
sciences, there are still two fundamental difficulties people would not be able
to overcome. 

The first difficulty
is the lack of controlled experimental environment as already mentioned before.
This is not only due to the complexion caused by the openness of any social
system, but also because of the uncertainty resulting from the responsive
nature of any intelligent system.Responsiveness of a system means it
would make a self-adjustment quickly in response to ongoing events. For
example, any published trick to teach people to buy good stocks at low prices
would soon be invalidated by itself if it is truly a good trick. Besides,
unlike natural scientists that are testing materials made of inanimate atoms or
observing caged white mice in a lab, social scholars are studying ensembles that
they themselves do fundamentally belong to. Ethics then should be one important
restraint for anyone who attempt to make social experiments without
sophisticated knowledge-based planning.

The second difficulty
is the lack of elegant mathematical framework. There are mainly two factors
responsible for this problem:

1) the
immeasurability of many abstractions involved in social activities. Unlike most
abstractions used in natural sciences such as mass, temperature and speed which
are measurable, many abstractions involved in social activities such as
passion, love, greedy are not measurable or at least not easy to measure. This
does not mean those abstractions do not make real senses. They do make real
senses just like mass, temperature and speed in natural sciences since all
people could not only clearly feel their own passion, love and greedy at
different levels in different time periods in life but also could clearly
perceive passion, love and greedy of different others at different time. But these
abstractions are simply not measurable as mass, temperature and speed is. Nonetheless,
in certain circumstances we might still find ways to measure social economic
activities with some abstraction that reflects the dynamics of human
interactions, and one good example is currency and prices measured by units of
currency. Because the dynamics of social activities are constructed on top of
non-measurable human wills, the values of abstractions (e.g. currency) used to gauge
social activities would often exhibit higher instability and lower predictability
than physical objects. For example, the face value of a bill is much more
volatile than the weight of the paper which is used to print that bill;

2) the nonlinear
discrete divergent nature of any social system including an economic system.
Even if we have found some way (e.g. stock prices) to measure the values of
social abstractions, it would be very hard for us to work out partial
differential equations to precisely calculate their variations (e.g. partial
differential equations of stock prices based upon all market data including
sales and production as well as stock history). Or even if we could arrive at some
type of equations with a selected set of abstract values for a very specific
subject the equations would most probably highly nonlinear and difficult to
solve due to the nonlinear nature of social (economic) activities.

The above mentioned two fundamental
difficulties would pose great challenges for any effort to rationalize economic
studies, but they are not sentences of capital punishment to our goal of
transition from the empirical world into an analytic world for social
(economic) studies. They just inform us of the limits of this transition we
might expect in the same way the laws of thermodynamics informed natural
scientists of the limits they should expect centuries ago. But we are still
very far away from those limits so that there are still many for us to achieve
before we need to worry much about the limits just like what natural scientists
have achieved during the past few centuries without the need to worry about the
limitation posed by thermodynamics. These challenges should only make us
smarter like what physical laws have made natural scientists smarter, not
restrain us from moving forward.

 

Being
aware of the difficulties of having controlled experimental environment or elegant
math systems, we should tune our mind toward more realistic and productive
efforts when attempting to analyze social economic systems. Fairness analysis
as a philosophical methodology is an ideal tool to examine social economic
systems without the need to set up a closed controlled environment or a grand
system of mathematical equations as you might find out once you start to look
into the issue as I have done in the past years[4].

4.     
Closing
words

While
more and more scholars are looking into advanced mathematical approaches or
numerical simulations by making use of the power of super computers to
investigate social issues including economics, many of them seem to have
ignored a basic fact that mathematical approaches needs abstracted parameters
or variables, which indeed would be results of more a philosophical work than a
statistical work for a not very well understood domain.

The
financial crises this world has faced in the past decade reminds us that studies
in economic field could serve as a good example that mathematical or
computational advantages could not replace the role of philosophical insight
when investigating social issues. As a matter of fact, even with all the
high-tech utilities employed in the economic field, human intelligence about
economy could hardly deemed as rational due to its fundamentally empirical
nature. The root cause for this backwardness is obviously not lack of data
processing technology or lack of fund but is lack of abstraction means to
analyze full scale social cultural systems. 

Since Adam
Smith first published his The Wealth of Nations[5]
more than two centuries ago fairness has always been the basic theme of
economics.What differentiate
classic economics, economic liberalism, Keynesian economics, socialism, or even
communism are their different interpretations about what is fair and what is
not. However, it might be a surprise to many that when supercomputing power
is extensively applied to do complicated calculations or simulations in the
economic field, the meaning of fairness is still far from clear to scholars
around the world. This might raise a question concerning any effort of the
computation: whether it is calculated to a fair market economy or calculated to
an unfair future.

This paper
provides an introduction to fairness analysis which would help us to
revolutionize our social cultural system on this globe since the application of
this philosophical methodology would impact our ways of looking at history,
politics, economy, and even literary writing. I have done some initiative work
on fairness analysis in the past years. But much more needs to be done if we
are aiming at a more rational social cultural system in the future.

 

 

 

References

---

[1] The Mathematical Principles of Natural Philosophy,
Isaac Newton, translated by Andrew Motte, published by Daniel Adee, 45 Liberty
Street, NY. 1846

 

[2] Drake, Stillman (1978). Galileo At Work.
Chicago: University of Chicago Press. 

 

[3] Chaotic Order: A Consequence of Economic Relativity,
Rongqing Dai, Complexity in Economics, ed. Marisa Faggini, Anna Parziale, 2014,
p.117

 

[4] On Fairness Analysis, Rongqing Dai, URL: http://fairlifebook.wordpress.com/

 

5 An
Inquiry into the Nature and Causes of the Wealth of Nations, by Adam Smith, London:
W. Strahan, 1776