Video Transcript: Equality of Opportunity

Hi, welcome back. In this video, we're going to discuss equality of opportunity.  Equality of opportunity says that a distribution is just if and only if it assigns  positions in society according to morally relevant criteria such as ability or merit,  and not according to morally arbitrary criteria such as gender or race. Right. So  make sure we need to make sure that we are giving equality of opportunity to  everyone. Right. People should get the position they deserve based on ability  and past performance. Right. This is what we need to be basing our hiring  decisions on solely. Right. Often used in business decisions regarding  employees, suppliers, and customers. Right. So now, are there problems with  equality opportunity? Let's look. Right, the ability, effort, merit, and desert are  often determined by factors that are arbitrary from a moral point of view. Right.  So, so, so let's look at the genetic lottery, family background, lucky decisions.  Right. How should benefits be distributed to positions? Usually, we answer the  answer is according to a marginal contribution. So let's take a look at marginal  contribution theory, right? So here you can see that we've got Jack and Jill, right, and they're creating a number of pins, like like a push pin, right? So so  productivity if if if if they're both creating heads and points to a pin, right? So  Jack will be able to complete nine pins in a day if he's specially specializing on  heads and and still creating one point. Whereas Jill, if she's creating nine points  in one head, she can only create together. They so they can create nine a piece. Together, they can create 18 a piece, right? But let's say Jack specialized in  creating heads only, and Jill specialized in creating points only, right? So now  they're able to increase their productivity to 90. This is called marginal  contribution. I specialize in this. You specialize in that. I can create these really  fast. You can create these really fast, and now we can merge our output  together and have a greater total cooperative production. Right. So, so  measuring marginal contribution. Right. Together, Jack and Jill, they'll produce  90 pins per day. Without Jill, Jack can only produce nine pins per day, right?  Jill's marginal contribution is 81 pins. Therefore, Jill deserves 81 pins. Without  Jack, Jill can only produce nine pins. Jack's marginal contribution is the same,  81 pins. So 81 plus 81 equals 162. However, there are only 90 pins, right? So,  so now we look at the marginal contribution of a firm. Remember, we want  marginal revenue to equal marginal costs, right? That means we are maximizing our profit potential, right? So now, if you look on the right-hand side of this chart, you'll see that in dark gray is the marginal revenue, and in light gray is the is the  marginal cost. Right, so so we want to find on this graph where the marginal  revenue and the marginal cost equal, and then therefore that will allow us to  derive the number of employees that we should keep on step, right? So we can  see that in 1, 2, and 3, 1 through 5, right? We are seeing that marginal revenue  is outweighing marginal cost, right? But we know from the theory of profit  maximization that that marginal revenue equals marginal cost, and this equals  profit maximization. So it looks to me like the number of six employees is the 

magic number that is going to show marginal revenue equals marginal cost,  right? So this is where we should be operating at with the number of employees, right, and our labor driver. So equality of welfare, welfare equality holds that a  distribution of property rights and resources is just if and only if it results in  everyone having the same level of welfare, right? So, so we want to obviously  stay well away from the welfare state, but but but it only holds true. Equality only holds true if everybody's on the same level, right? The problem is measuring  and comparing welfare. So so everybody has different tastes, right? And it  appears to say that we should justify the preferences of those who do not enjoy  inexpensive resources right. So so leveling down right. So we are bringing  everybody into an equal welfare state right. But my. Case may be different than  this other person's case, but now I have to level myself down because now we  can only have this certain amount of quality of product because we're all on the  same page, right? Well, no. Look, equality is great, right? But we need to make  sure that we are promoting free market economics. We need to make sure that  we're promoting free market capitalism to where we can pull ourselves out of  poverty, not worried about the welfare state and creating our own wealth. Right,  that is the point of the free market system.