Definition

Making systems fairer is more important than making them suitable for individuals. Sometimes sacrifices are necessary to achieve broader goals.

Why Use It

Humans share a desire for fairness at any cost, and this need can be at odds with systems that work better when they seem less than fair.

An example might be seeing a colleague receive a promotion when you know you’ve done as good or better a job. The feeling you have doesn’t consider any other aspects of why they might have received the promotion.

As such, it’s easy to ascribe what fairness is for yourself, but deciding it for others is more error-prone.

When to Use It

The pursuit of absolute fairness can cause severe problems, and some systems should appear unfair as they will be more beneficial on average for all.

Society has defined unspoken rules of conduct that, when followed, result in what would be considered fair treatment. When folks do not adhere to the rules, their actions are labeled unfair.

An example of poor conduct is someone driving a car and cutting you off. Since people are not supposed to cut others off, their action is considered unfair.

How to Use It

Suppose you are making the rules for a system or redefining one; it’s more important to ensure balanced incentives and rewards than guaranteeing that one person is fairly treated.

Regardless of whether an option would make someone better off, humans frequently refuse propositions that seem unfair — misconstruing or confusing how the system works can lead to an unbalanced solution.

Keep in mind that a fair system will need to consider the human psyche.

How to Misuse It

While seeking fairness is a reasonable pursuit, weighing the individual and group’s outcomes can be tricky.

One interesting case that displays how individuals serve themselves instead of the community is the issue of privatized water. Today, our water infrastructure is in disrepair, and some areas have turned to for-profit companies to operate water utilities. But in developing a system that a few individuals profit from, the communities they serve are affected by increased costs, poor service, and little oversight. While privatizing water might have been compelling on the surface, it has created a less fair system for the community.

Next Step

If you’re building a new system, take the time necessary to balance things out.

And if you’re stuck inside a situation that seems unfair, life isn’t fair, and maybe that’s okay if the outcome is better for all of us.

Sometimes, the outcomes aren’t better for the community or society as a whole; in that case, be agents of change in the system.

Where it Came From

Immanuel Kant introduced the concept for the “categorical imperative” in 1785, which noted an unspoken pattern where humans require one another to follow certain behaviors. As long as everyone follows suit, the system works best for all. In 2003 Charlie Munger utilized this concept and expanded on it in several talks.