Robert E. Goodin (1989) – Theories of Compensation

By Aart van Gils

Today, we discussed Robert E. Goodin’s (1989) “Theories of Compensation”. The paper was chosen by Josh, who was so kind to introduce the paper and its key points to us. There were several interesting points made in the discussion, but for the sake of clarity and brevity only the most significant will be mentioned.

First, Goodin distinguishes between two types of compensation, namely “means-replacing-compensation” (compensation1) and “ends-displacing-compensation” (compensation2), and he argues for the superiority of compensation1 over compensation2. Some worries were raised regarding this supposed superiority of compensation1. To name one in particular, there was the worry that the value of certain ends seems to derive in great part from the particular means that someone may use in order to achieve his or her end. Therefore, solely compensating people such that they would be able to achieve the same end, without considering whether the particular compensatory means provided were similar enough to the original means, seemed problematic.

In Goodin’s defence, however, it was pointed out that this objection relied on blurring the distinction between means and ends, and that if certain means were considered as necessary and/or invaluable, it seemed hard not to slot them under the heading of ‘ends’, which would require compensation. But Goodin could accept this point by broadening compensation2 and claim that this is how we compensate for the necessary and/or invaluable aims.

Second, Goodin seemed to waver between two different understandings of a Pareto improvement in an interpersonal distribution. Put simply, it was unclear whether Goodin’s view strictly required that people were in fact compensated for their losses or whether ‘virtual’ compensation (i.e. that the total gains would theoretically outweigh the total losses) would be sufficient.

It was acknowledged that Goodin’s view could be improved by a stricter definition of Pareto improvement. However, it was eventually agreed that this point was not part of the main argument and so, if necessary, Goodin could easily concede this point all the way, if pressed on it.

Third and final, there was disagreement regarding the strength of Goodin’s conclusion. The conclusion seemed to be that even if individuals were to have legitimate complaints for not being (sufficiently/appropriately) compensated, then it might be that the policy could nevertheless be adopted. The worry here was that a second level of compensation was introduced, meaning that besides the question of how people might be compensated for their losses, there was the option that the impersonal gains of a particular policy could outweigh the losses done to several individuals.

There was unanimous agreement that Goodin had more work to do here and that his conclusion moved too quickly from one step to the other. But again, in his defence, it was pointed out that actually Goodin had made the correct move by arguing for the permissibility of public policies, even if these policies would have the effect that some people would suffer losses which could not be compensated. To set compensation as a requirement on public policy, disallowing it when compensation was impossible or insufficient, would lead to an implausibly restrictive and/or conservative attitude in political decision-making.

All in all, Goodin’s “Theories of Compensation” raised several interesting issues, ranging from the theoretical distinction between different types of compensation to the practical application to several concrete cases. We thank everyone who was there for contributing to a very fruitful discussion, and we thank Josh in particular for bringing this interesting article to our attention.