Socio-economic System

It is said that there are two minimum requirements for people to live happily. The first is the ability to satisfy physiological needs such as appetite and desire for sleep. The second is to satisfy the desire for safety by ensuring physical and mental safety.

Only when these two requirements are satisfied will people be able to satisfy their other desires. According to Maslow’s Law, once these two basic requirements are satisfied people can begin to satisfy their social desires and desire for approval. These desires could be paraphrased as desires for equality and fairness, respectively. The former is a desire for simple equality, while the latter is a desire for equality in terms of results (gains), and may have greater value.

Have you ever been caught up in work or exams and lost sleep? Many of you may have been up all night for a day or two, but what if you’ve been sleepless for three days? If you’ve been up for two days, your body loses its ability to metabolize glucose and your immune system shuts down; and if you’ve been sleepless for three days, your whole body seems to shake uncontrollably, it becomes difficult to talk, and you may even hallucinate.

The same is true of appetite. It is said that globally 828 million people go to sleep hungry every night and more than 345 million people suffer from severe hunger. When the fundamental human needs for sleep and food are not satisfied, we no longer want to dress up or be recognized, let alone fulfill our dreams, and we can only think of satisfying our desire to survive.

In Maslow’s five-stage theory of desires, “physiological desires” for food, sleep and sex, and “safety desires” for physical and mental safety, are referred to as “material desires”. If these desires, which center on clothing, food, and housing, are not satisfied, more complex mental desires cannot be considered. Thus, material desires are defined as the basis of human happiness. This means that these basic desires need to be satisfied before we can think about our other desires, let alone the whole planet. Article 25 of the Constitution of Japan provides for “improving social welfare, security and public health” and a “minimum healthy and cultural life” as part of the right to life, and institutes mechanism to protect material desires so that people in Japan can build a peaceful and happy society without losing their reason.

I don’t think many people would disagree that society should achieve some form of fairness, but how can we achieve fairness among a diverse population? If we achieve fairness on one measure, logically we cannot achieve other measures of fairness at the same time. If we are to achieve a “fair society” our concept of fairness becomes very important. First, how should fairness be measured?

One way of thinking about the total amount of fairness in a society is to consider fairness in terms of the weight of each person, fairness in terms of the value of money, and fairness in terms of the incremental increase of each person’s happiness. Another way of thinking about fairness (common to democracy, capitalism, utilitarianism, etc.) is that a society should aim to maximize the total amount of money, happiness, etc., for each unit of the society while ensuring fairness.

The idea of maximizing the total amount of value created in society seems rational, but there are likely to be problems such as the failure to protect the interests of minorities in a democracy or to reduce the gap between rich and poor in a capitalist economic system. Maximizing the total amount of value alone does not address inequity of distribution, and it also ignores our diversity. It seems that if we are to solve inequality and other problems of inequity, we need to think on a scale that focuses on individual fairness while keeping diversity in mind.

So let’s look at the idea of fairness for individuals. The first thing that comes to mind is the fair distribution of happiness. While this may seem like the ultimate goal at first glance, happiness is inequitably distributed when there is persistent discrimination. For example, when persistent class discrimination is entrenched, this can result in obvious discrimination that can be left unaddressed if we only look at the fair distribution of happiness, because people in the lower classes feel the same amount of happiness about small improvements in their lives as more fortunate people feel about bigger improvements. Can this result, which gives a certain level of happiness to everybody (depending on how you look at it), be called a wonderful new world for us? When viewed as a practical measure to improve social equity, this idea has its problems.

If a psychological measure such as happiness cannot practically be used to assess social equity, what measure should be used to capture it? Given that we are inherently diverse, and that we are unable to change our assumptions on our own, equity must be measured using a whole bundle of measures that reflect diversity. On a slightly different note, should the focus be placed on equity of outcomes or equity of prerequisites to achieve outcomes? It is conceivable that those who have equity of prerequisites to achieve outcomes have greater freedom to make choices about their future, so it may be that the value of freedom to choose one’s own future should be considered here.

If freedom is in itself an important value, along with fairness, then many of you would think that the focus of fairness should be on the equity of prerequisites for outcomes, as this also enhances freedom (in a more extreme example, people may even want the freedom to be unhappy).

In light of the above, I feel that there is a certain rationality in the idea that we should achieve equity in prerequisites for outcomes—or, as Amartya Sen put it, the “fairness of freedom”—across a diverse bundle of measures that reflect the essential diversity of our society.

We have considered the idea that we as a society should achieve the “fairness of freedom”, which is a prerequisite for achieving results using a diverse bundle of measures that reflect our intrinsic diversity, but how exactly do we achieve this?

As individuals, we have preconditions such as innate and diverse talents, but we cannot choose those preconditions before we are born. Specifically, we are given a bundle of preconditions that are very diverse, including a variety of talents (for example, athletic, artistic and academic talents) as well as our gender, race, nationality, region, education, freedom to choose a career, social security system, and our parents’ financial strength; society must strive to achieve fairness while recognizing these diverse preconditions. Moreover, because we have the freedom to lead our own lives not all these preconditions are necessarily used; for example, many talents end up not being used to their fullest extent.

There are many preconditions that cannot be observed in modern society. On the other hand, as a result of us exercising our freedom, some relationships can only be observed in terms of their diverse outcomes. These preconditions cannot be observed at first glance, so their inequities seem undetectable. But by relying on a wealth of information about diverse outcomes and analyzing their fairness for bias, we may be able to detect and remedy inequities in the underlying preconditions.

One of the preconditions for the social and economic system in which we live is fairness. The right to know things is a major factor in this. This right to know leads to each person leading a good life and achieving self-fulfillment, for example by realizing what they want to do or recognizing their dreams. We need systems that give people an equal opportunity to know “what’s out there” and “what kind of jobs are out there” as they move forward through their long lives.

One such system is education. Japan has a Fundamental Law of Education, which defines the principles of education. The following shows Articles 3 and 4 of the Fundamental Law of Education.

“(The philosophy of lifelong learning)

Article 3: Every citizen must be able to learn at any opportunity and in any place throughout their lifetime, so that they can polish their personality and lead a fulfilling life. A society must be realized where the results of learning can be appropriately utilized.

(Equal educational opportunities)

Article 4: All citizens must be given equal opportunities to receive education according to their abilities, and must not be discriminated against in education on the basis of race, creed, gender, social status, economic position or family origin.

Fundamental Law of Education in Japan“

For example, let’s say you give some kids a book describing jobs from all over the world. Would the kids understand what jobs were out there? Do you think, “they’ll know that if they read the book, that’s a given”? What if, then, these were children who could not attend school and thus did not receive a minimum level of education allowing them to read and write? Perhaps they would never know what kind of jobs were out there.

If a minimum level of education, such as the ability to read and write, is not widespread, problems such as the inability to convey what one wants to say arise. Basic education thus needs to be equalized. It is highly desirable that children all over the world have equal access to education, but there are countries in the world where education is not widespread because of poverty. Some people may think, “even if you can’t go to school, you can still learn through the Internet”. However, there are many countries in the world where there are not enough schools and teachers, and where communication facilities and environments such as the internet are not available. On the other hand, there are countries where communication facilities and environments are in place but are not freely available. Each country has a different information strategy, and it is very difficult to solve this challenge right away. Even if it takes time, I think it is very important that we gradually increase opportunities for children around the world to “get to know the world” by promoting digital materials, narrowing the digital divide, and loosening regulations.

When we take a bird’s eye view of our activities in the socioeconomic system of the society we want to be in the future, we can see it as a situation where we are facing resource constraints due to the natural environment and other factors, and we are working toward some social goal under these constraints. On the one hand, as individuals, we seek to maximize freedom and happiness under resource constraints, but on the other hand, if we do not know where we are in the structure of society we may try to achieve some kind of fairness as a social goal so that we can be reasonably satisfied with whatever position we are in. Efficiency in the context of resource constraints is something that should be maximized as long as the fairness of society is preserved.

Furthermore, the extent to which we should consider social goals as members of society should also be expanded. Thinking about the future requires us to embrace the perspective of sustainability when considering everything from as human beings to the silent creatures, the earth and the natural environment, and not only the members of the present world but also the members of the future world.

Fortunately, we live in a world that is heavily influenced by technology, with big data and computational power allowing analysis of the drivers of precondition bias based on information about diversity outcomes. The fairness of preconditions, which has historically been considered only on a very limited scale (such as in relation to income and education levels), can be a powerful driver of improvement toward a more equitable society by the empirical analysis and evaluation of a wider variety of preconditions; for example, by causally inferring preconditions through supervised learning and evaluating social policies through reinforcement learning to maximize social welfare.

A market economy based on capitalism is an efficient mechanism in the sense that it maximizes resource efficiency through price determination, but when evaluated from the perspective of fairness, it becomes clear that capitalism discounts the imbalances mentioned above, and while information on the value of goods is efficiently distributed, anything other than that which can be converted into money is discounted as an externality. As a result, we face the following contemporary challenges:

• ・Growing inequality (requiring human security and fairness)
• ・The externalities of future generations (requiring consideration of future ethics and principles of sustainable development)
• ・Abandonment of anything but monetary value (requiring community, mutual aid, animal welfare, environmental enrichment, life centrism, and globalism)

These challenges are caused by the flow of value to social goals that accompany economic activities, and by the truncation of information about the distribution of goods.

When we buy goods, we cannot determine how much impact our economic activities have on social goals because we do not visualize how the goods impact social goals. As a result, even those of us who are inherently empathetic and reach out to the people in front of us may be mercilessly complicit in the destruction of equity because we are ignorant, and empathy is not encouraged by the global socioeconomic system.

Improving mechanisms to help guide an equitable society toward a just future will require us to make good use of our well-developed mechanisms for the efficient use of resources as an engine to enhance social equity and solve problems.

When fairness with regard to people, other organisms, and nature overall cannot be visualized globally, it is difficult to drive empathic consideration globally. To visualize the interplay of fractured value chains, it will be necessary for those involved in these value chains to drive awareness.

This will require the visualization of global value flows. It is conceivable that the value of people, organisms, and nature can be visualized through the value chain of goods. Here, we define the values that ensure fairness in terms of the prerequisites for producing the well-being of people, organisms, and nature, as follows.

Well-being of people: Ensuring human security by means of a wealth redistribution mechanism that balances reduced capabilities (a mechanism that ensures the fairness of freedom).

Well-being of organisms: Disclosure of information on animal welfare and environmental enrichment, and redistribution of the costs for the maintenance of the animal environment (a mechanism that ensures the protection of biological rights).

Well-being of nature: A framework that enables end-users to bear the costs of disclosure and restoration of the global environment (a mechanism that ensures responsibility is taken for nature and the rights of future generations).

By creating a system in which information on the value can be grasped by those of us at the end of economic activity chains, it is conceivable that we could drive a mechanism for the redistribution of value and the betterment of society.

A society that takes advantage the efficiency of the market economy while overcoming externalities and increasing the value of society can be summarized in terms of economic (efficiency) mechanisms that manage resource constraints, mechanisms that protect the balance between freedom and equality, and expansion of the diversity of stakeholders, as shown in Fig 3.