Designing out bad luck

People often underplay the role of luck in determining life outcomes. A fair society should respect the fact that people can 'earn' good or bad luck by making different choices, and that this has consequences. But it should also recognise that 'unearned' bad luck (and, to some extent, good luck) is not fair, and should take steps to prevent it or compensate for it. In particular, we should 'design out’ bad luck at birth as far as possible, so that every child has the same life chances regardless of the circumstances into which they are born (family income, social connections, and so on). We should also ensure that people are protected from bad luck throughout life, in areas such as social security, work and education, just as the NHS provides everyone with healthcare when they fall ill.

Debates about fairness rarely consider the role of luck in life. We propose a distinction between earned luck and unearned luck. Earned luck is not really luck but something that a person creates themselves. People can create good luck for themselves by seizing opportunities, taking the initiative and working hard. They can create bad luck for themselves by making bad choices. But unearned luck really is luck, because it is outside people’s control. Unearned luck happens to people in the course of their lives – they might win the lottery, or become terminally ill. But it is also the good or bad luck of the circumstances into which people are born. They can be born into a rich or poor country, area or family, in a period of prosperity or poverty, peace or war, with or without a disability; they can receive a good education, parental support, excellent healthcare, help finding work, great job opportunities, or none of the above.

Unless we do more to try to compensate people who have suffered excessive amounts of bad luck, we cannot reasonably claim that the system by which people are rewarded for their talent and effort is operating fairly and proportionately. We already have a popular national system to help people who suffer the bad luck of becoming ill – the National Health Service. The NHS treats people without asking whether they have fallen ill due to bad choices or due to circumstances beyond their control, and we should recognise that circumstances can often constrain or otherwise affect people’s choices, so it is hard to draw a clean distinction between earned and unearned bad luck. We also have a social security system to help people who need support because, for example, they cannot work, or lose their job, or do not have parents who can raise them. Neither are perfect; both are necessary and reflect a widely held belief that we need collective systems in place to protect people from the consequences of bad luck in life.

But we don’t have any measures in place to compensate people for bad luck at birth (which, by definition, is unearned). We don’t have the right economic and social structures to give everyone the chance to exercise their strengths from an equal starting point. We all know that the first 1,000 days of a child’s life are crucial, but we don’t intervene enough in the early years to give every child the same chances to succeed. Our focus on the idea that people are responsible for their own choices has blinded us to the fact that children cannot be held responsible for the circumstances in which they are born, and must be helped to overcome any barriers to their future success that they face as a result.

If we can ‘design out’ bad luck at birth as far as possible, then we can build a society in which choice and individual responsibility can be more fairly exercised, and in which equal opportunities to succeed mean that talent, effort and earned luck can be more fairly rewarded. We will never fully achieve this, but we can get much closer to it than we are now, building on examples of good practice from other countries. To quote Ha-Joon Chang: "We can accept the outcome of a competitive process as fair only when the participants have equality in basic capabilities; the fact that no one is allowed to have a head start does not make the race fair if some contestants have only one leg."

If we could do our best to design out bad luck at birth (and in childhood), we would be in a much better position than we are now when it comes to providing equal opportunities in adulthood. Needless to say, even if we built a society in which most people started life with similar opportunities, we would still need to provide additional support to many people (such as those with disabilities, as well as people who had not benefited from equal opportunities earlier in life). On top of that, we would need to ensure that everyone in society receives equal access to opportunities at every stage of their lives.

This would require open and competitive markets, fair admissions and recruitment processes, decent universal public services such as education and health, and a social security system to cope with unearned bad luck that occurs during life. And of course, it would require us not to discriminate on the basis of people’s race, gender, sexuality or religion.

Finally, we should aim for ‘relational equality’, where everyone is morally equal and has the opportunity to an active and influential role in society and to live a life of dignity and control, regardless of whether they are able and willing to achieve material wealth. And we should recognise that it benefits all of us to help people to overcome the consequences of bad luck, even ‘earned’ bad luck.

We call this approach ‘balanced fairness’, because we believe that it strikes the right balance between approaches that do not go far enough in equalising opportunities (such as libertarianism and ‘weak’ meritocracy) and those that go too far towards equal outcomes (such as ‘full’ egalitarianism). It recognises that a more (though not fully) equal society is a precondition to achieving real equality of opportunity.