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Technology
Department of Economics
Working Paper Series
Massachusetts
Institute of
SEXUAL HARASSMENT
IN THE WORKPLACE
Kaushik Basu
Working Paper 02-1
February 2002
Room E52- 251
50 Memorial Drive
Cambridge, MA 02142
This paper can be downloaded without charge from the
Social Science Research Network Paper Collection at
http://papers.ssrn.com/abstract id=xxxxx
1
^
Technology
Department of Economics
Working Paper Series
Massachusetts
Institute of
SEXUAL HARASSMENT IN THE WORKPLACE
Kaushik Basu
Working Paper 02- 1
February 2002
Room E52- 251
50 Memorial Drive
Cambridge, MA 02142
This paper can be downloaded without charge from the
Social Science Research Network Paper Collection at
http://papers.ssrn.com/abstract id=xxxxxx
February
SEXUAL HARASSMENT
An Economic
IN
7,
2002
THE WORKPLACE
Analysis with Implications for Worker Rights and Labor Standards Policy
Kaushik
Basil
Massachusetts Institute of Technology
MA 02142
Cambridge,
Email: kbasu(5),mit.edu
Fax: 617 253 1330
and
Department of Economics
Cornell University
NY
Ithaca,
14853
Abstract
Suppose a firm has a widespread reputation
it
follows the practice of telling workers that
be prepared for sexual harassment).
When
if
for sexually harassing
its
workers (or
they wish to work for the firm they must
worker
work
and
banning such
'contractual' sexual harassment? This paper argues that the answer is yes, and that we
can be both Paretian and ask for a ban. A general principle, called the large-numbers
accepted, there
argument,
is
is,
a
offers to
for such a firm
is
therefore, a Pareto improvement. Is there a case for
developed to justify
this
and
it
is
shown
that there are other areas,
occupational safety where this principle can be applied. That
preventing firms from exposing
is,
such as
may be a case for
even when each worker
there
its workers to excessive hazards
enough to want to submit to this. Hence, this argument provides a
general principle for deciding which market transactions ought to be banned as
obnoxious, instead of relying on ad /zoc judgments. The paper goes onto discuss how our
sexual harassment laws ought to be reformed so as to be more receptive to the needs of
finds the
pay
attractive
society.
I have gathered many intellectual debts and would like to, in
Alaka Basu, David Ellerman, Stanley Engerman, Gary Fields, Martha
Fineman, Rachel Kranton, Glenn Loury, Sam Lucas, Tapan Mitra, Prasanta Pattanaik, John Roemer,
Ekkehart Schlicht, Amartya Sen, S. Subramanian and Jorgen Weibull. The paper has also benefited from
presentations at the Harvard-MIT Economic Theory seminar, a conference in honor of Amartya Sen at
Bielefeld University and a seminar at the Institute on Race and Social Divisions at Boston University.
Acknowledgements:
In writing this paper
particular, thank Abhijit Baneijee,
SEXUAL HARASSMENT IN THE WORKPLACE:
A
Worker Rights and Labor Standards Policy
Theoretical Analysis with Implications for
1.
Commending
The Question
the initiative in Britain to legitimize prostitution, the Economist
"One reason why
(January
6,
moves
moral. In a liberal society, buying sex for
is
2001,
p. 18)
argues,
legitimate commercial transaction,
I
agree with this view, though
I
where
would
it
state
the
government should support these
money should be regarded
takes place between
a bit
it
contract or an action agreed to or undertaken
as a
two consenting
more elaborately and
by a group of consenting
adults."
generally:
A
adults and with
no
negative externality on any uninvolved 'outsider' ought not to be prohibited by
government. Let
me
call this the 'principle
of free contract'. This
is
one of the most
important basic principles that has guided economists in developing specific policy
recommendations. Thus when a landlord and a tenant agree
be low but the tenant must agree to vacate the apartment
that the rent will
(perhaps because the tenant
moves and
is
poor and wants
the landlord anticipates that he
where the apartment
would argue
to sign a contract
that
is
to save
on rent even
may suddenly have
to
if that
which says
short notice
at
means frequent
move back
to the city,
located and need the apartment for himself) most economists
government should not block such a transaction.
Economists have warned government
contract and to give in to
its
knee-jerk tendency to intervene in markets
well-being of the very people
cropped up repeatedly
that to disregard the principle
it
wants
in the writings
to help.
Appeals
is
of free
to hurt the
to this or similar principles
of John Stuart Mill
(see, for instance. Mill, 1848,
1859).
"As soon as any part of a person's conduct
interests
room
of others, society has jurisdiction over
for entertaining
it
affects prejudicially the
....
But there
(all
no
any such question when a person's conduct affects
the interests of no persons besides himself, or needs not affect
they like
is
them unless
the persons concerned being of full age, and the ordinary
amount of understanding).
In all such cases, there should be perfect
freedom, legal and social, to do the action and stand the consequences".
(Mill, 1859, p. 132).
With
the
the principle of free contract in the background, let us
problem of sexual harassment
in the
workplace.
Tomes have been
trying to define 'sexual harassment' but for our present purpose
treat this as a
case of unwanted sexual advance
instance, an employer, towards an employee.
engages
i^'
in sexual
made by
If,
is
written
enough
to
person of power, for
a
for instance, an
employer
life
generally miserable for her ("hostile environment")
she resists, then this would be a case of sexual harassment.
Can
At
first
sexual harassment be justified by an appeal to the principle of free contract?
blush, the answer seems to be an obvious "no" because harassment entails
The harassee
coercion.
precondition, that
does not get
But
it
coerced into something she does not want. So the
is
be a voluntary contract for the principle of free contract to uphold
this
does not have
to
happen with sexual harassment. To see
its
recruitment office that says,
sexually harass our workers. Please take this into account
Now, when
decision
"We pay
this consider a
well, but
when you apply
we
to our firm".
an employee sees this and then decides to work for this firm, the employment
becomes
a voluntary
seems therefore
contract.
It
harassed.
Of course,
does not make
it
at the
a case
one and so comes under the purview of the principle of free
that
time
cannot claim that he
is
government should not object when
when
she
is
like
it
this
when he
who
takes
money
it.
fi^om an
is
But
that
employer
has to work during long afternoon hours
being coerced to work.
see that this argument has a wider reach than might appear at
that the firm
employee
being harassed she does not like
of coercion, just as someone
do a day's work but does not
To
it,
fulfilled here.
firm that puts up a sign outside
to
it
consider
advances on an employee by threatening to block her promotion
quid pro quo") or make
if
'
now
first sight,
note
does not really have to put a notice up on the door. If it has a reputation for
sexual harassment so that
it is
known
to the
new employee
that this
is
part of her job
For a recent collection of essays on the subject, see LeMonchek and Sterba (2001). An excellent survey
of the subject, including discussion of alternative theoretical perspectives, occur in Crouch (2001). The
classic and influential work on the subject is MacKinnon (1979).
description,
can be argued that both parties (the employer and the employee) must be
it
better off if they choose to sign the contract;
to
and so
this
kind of sexual harassment seems
be protected under the principle of free contract.
Do we
One way
in
then not have any grounds for outlawing (contractual) sexual harassment?
which economists react
to this
and other contracts they do not
like is to
we
simply assert that these are exceptions, and then quickly change the topic. At times
try to
be
less arbitrary
by providing some ad hoc justification for the exception. John
Economy
Stuart Mill, in his Principles of Political
(1848), after
making
a persuasive
case for the principle of free contract, immediately recognized that there must be
exceptions to the principle.
He was
immediate poverty, may be willing
subsequently
come
to
be
known
(such as
when
it
is
become
is
was allowed,
it
Roman
law, self-sale
this
was
was not common
practiced in the early
who
This dilemma has
slavery', or 'waranteeism'
force) or enslavement at birth or in childhood
Roman
when
not necessary. In certain times and in
was possible
their
usually rooted in an initial act of coercion (such as
for a person to
was passed
color to "voluntarily select masters and
though
life.
some people, driven by
decreed that a child of a slave will be a slave, or
Louisiana, for instance, legislation
In
slaves for
problem of 'voluntary
away people by
sells his or her children), this is
slavery
to
as the
(Engerman, 1973). While slavery
taking prisoners or taking
troubled by the fact that
in
become
some
places,
where
choose to enslave oneself. In
1859 which "allowed" free persons of
slaves for life" (Ellerman, 1995, p. 73).
a legally recognized
practice,
poor parent
a
mode of becoming
a slave.
And even
manumission was both acceptable and widely
empire (Temin, 2001).
It is
therefore arguable that slaves
opted not to be manumitted were opting for voluntary slavery".
It
seems natural
that the question
would
arise
whether voluntary slavery should be
included in the class of voluntary contracts that individuals have a right to undertake.
From
A
the rest of Mill's analysis^
it
seemed
to follow that the
answer
to this
would be
yes.
slave's decision to purchase his own freedom occurs in Findlay (2001).
of Mill's concern pertains to individual decisions, such as a person's right to die. But this extends
naturally to matters of contract between two or more people, and raises the same philosophical question
model of the
Much
concerning the
state's
domain over decisions
the decision (Sunstein, 1997).
that
do not have a net negative
effect
on those uninvolved
in
4
But
that
was troubling
to Mill, as
it
would be
to
most of
term contracts - ones
in
prolonged period"
325) must not be allowed'.
The
(p.
which
a
trouble with such an
likely to threaten
many
So he argued
us.
that very long-
person commits to do "something forever or lor a
ad hoc exception
useful institutions. If we
is
that
were
it
is
too blunt an instrument, one
to take Mill's injunction against
very long-tenn contracts seriously, that would put an end to the ubiquitous 30-year
mortgage
for
buying houses. Poor people, for
take a long-maturity mortgage,
Moreover,
if the
whom the
would no longer be able
exemptions
to the principle
advice of economists to governments and
only
to
to
buy
a house
is
to
buy houses.
of free contract are too ad hoc, the
policymakers
to
way
in transition
economies and
Third World nations, that they should respect the principle of free contract, loses force.
These governments can justify
There
is
their violations
evidently a need to provide deeper analytical foundations for the
exceptions to the principle of free
problem
is
That
contract''.
is
what the present paper attempts. The
approached contextually, the context being that of sexual harassment.
construct an argument
employees and
punishable
of the principle on equally ad hoc grounds.
is
when
why
sexual harassment, even
therefore 'voluntary',
violated.
industrialized nations (and
I
am aware
may
that
when
it is
made
I
clear to prospective
deserve to be legally banned and considered
such harassment
many developing
ones).
What
is
is
already banned in most
however ill-founded
is
the
Faced with this question some writers have taken the logic to its natural limit and said yes. Nozick (1974)
an example of this but by no means the only one (see Ellerman, 1995, Chapter 3, for discussion). There
are others who have virtually taken this position but not explicitly, arguing that voluntary slavery is so rare
that we do not really need to take a position on this (see Epstein, 1985, p. 335, n. 7). There are others who
have taken the position that we should take the policymaker's values into account. Since the policymaker
may not like to see voluntary slavery, we may be Paretians and still ban it. The trouble with this argument
is that it could be used to justify any action that a policymaker wishes to undertake on the simple ground
that he wishes to undertake it. 1 would dismiss this by distinguishing between a policy maker's moral
judgement and his or her utility or happiness, and by taking account of only the latter in deciding what
constitutes a Pareto improvement.
'
Later, in On Liberty, Mill (1859) took a more sophisticated position on this arguing that the alienation of
individual freedom undermines civic and political equality and for that reason this should not be allowed.
Satz (2001) has recently argued for something similar, claiming that certain rights are necessary for
"democratic equality". However, these approaches take us beyond the Paretian framework, arguing for the
upholding of certain societal values that go beyond the valuation of the own welfares by individuals. This is
an avenue that 1 am however not allowing myself to take, easy though that would make my task.
* Several economists and other social scientists have been concerned about the conditions (if there be any)
under which voluntary contracts ought to be banned (see, for instance, Trebilcock, 1993; Kanbur, 2001)
is
reason for such a ban. The present paper
between
distinction
'individual' contracts
on a somewhat paradoxical claim
tries to
provide a reason based on a crucial
and a class of contracts. The argument
that for certain kinds
is
based
of contract (for instance, sexual
harassment) the welfare implications for allowing a single or a limited number of
may be very
even contrary, to allowing a
number of such
instances of
it
contracts.
shall call this the 'large-numbers argument' for limiting free contract^.
Though
I
It
I
start
different,
with sexual harassment, the idea
should be clarified that
my
is to
produce a general argument.
argument for exempting certain kinds of free
contract from protection under the principle of free contract
propositions alone.
is
not founded on positive
A full statement based on the large numbers argument is one which
has to be bolstered by a normative requirement, as explained
numbers argument can,
like all practical rules
intervene in markets
when
argument
that is
an alibi for intervention,
a serious
is
argument
that
government can
there are externalities can easily be misused since in reality
be used to justify virtually any intervention
into
As
of formulating policy, be misused.
any actions which do not have any
the large-numbers
Secondly, the large-
later.
Friedman and Friedman (1980) remark, the widely-used principle
there are hardly
'large'
we
if
we
externality.
upon so doing. Likewise
are bent
developed here. If we want
can do
so.
that tries to delineate
Hence, the principle can
to
misuse
it
for
and make
But that does not detract from the
it
fact that
it
one class of exceptions to the principle of free
contract.
The large-numbers argument has implications
It
that
go beyond sexual harassment.
provides a foundation for a variety of labor standards and labor rights policy in general.
One matter that has come up
a close
recently in the international labor standards debate and bears
resemblance to the sexual harassment problem discussed above
is
the practice,
followed by some developing nations, of requiring workers to forego their collectivebargaining rights and the right to join trade unions,
and a few have even
tried to formally
model
this
when
they choose to
(Neeman, 1999; Genicot, 2001
).
But
work
in
this still
an
remains an
unsettled issue.
One of the most important works, which
the moral status of sets of acts,
is
tries to distinguish
Parfit (1984).
He dubs
the
between the moral
common human
status
of single acts and
tendency to morally evaluate a
of acts on the basis of our judgement about each act contained in the set a mistake in "moral
this paper may be viewed as a formalization (in the context of economic
problems) of what Parfit attempted but never really 'proved'.
set
mathematics". In a sense
export processing zone. This
true ol" laborers opting to
is
work
Malaysia's electronics
in
export sector or in Mexico's 'maquiladora' free trade zones. Proponents of the 'social
clause' in the
WTO want this practice to be abolished because
basic right of the worker.
chooses to work
in
out,
may
be argued that
maternity leave. Usually,
way of thinking
we do
to basic occupational safety, that
when we make
women
workers should get
these arguments for workplace legislative
so hurriedly, saying a few things about externalities.
we
with principles that we, on other occasions, claim to adhere
that can
worker
a
about such policy conflicts.
probe deeply into such interventions precisely because
argument
when
of us feel that workers should not be exposed to excessive hazards, that
workers should have a right
interventions,
it
of a
to a denial
and so cannot be thought of as being exploited or compelled.
analysis in this paper provides a
Many
to
the other hand,
amounts
such a zone, the worker does so by comparing/ree/y with the
ahemative of staying
The
On
it
We
fear that they
to.
are afraid
may
The large-numbers
provides a foundation, a kind of litmus test, for such interventions.
be used to determine, which interventions are potentially
A crucial
element of this paper
is
that
it
and contracts
(for instance,
It is
a test
which
justifiable,
not.
constructs the argument for intervention
while maintaining the sanctity of the Pareto criterion'. There are people
certain practices
conflict
who
argue that
ones which lead workers to being exposed
to
excessive occupational hazards or involves a diminution of a person's dignity) should not
be allowed. The argument in
paper
this
is
however rooted more firmly
neoclassical economics, in particular, the Paretian paradigm. In other
in conventional
words
I
position that a person has the right to judge whether the hazard that he or she
to is being
more than made up by
The planner must not over-rule
not because of any behef that
exposed
the financial compensation he or she receives for this.
the individual's
all
take the
is
own
assessment of this.
I
take this line
policy interventions should be thus rooted, but to
demonstrate that some of these interventions can be justified even without venturing
beyond
the neoclassical framework.
In related fields, such as the study of conflict
between Paretianism and
liberty, the possibility
of
disregarding the Pareto criterion has been suggested and debated (Sen, 1970; Suzumura, 1983; Basu, 1984;
Sexual Harassment in Competitive Markets
2.
The
first
step in constructing the
kind of contract, which,
it
is
implemented a
when
'large'
it
is
argument
is to
note that there can be a certain
implemented once, has no negative
number of times, leave some
individuals
spillover, but
worse off This turns
when we make
out to be true for sexual harassment in competitive labor markets
when
the
eminently reasonable assumption that (1) the degree of aversion to harassment differs
across individuals and (2) the labor supply curve
is
upward
sloping. This result
call the
1
'harassment lemma' (Basu, 1999; 2000).
It
what
is
should be mentioned that there
is
nothing novel about
often referred to as "pecuniary externalities".
well-known, namely,
that, starting
this result. It is a
a special instance of what
It is
from a competitive equilibrium,
class of transactions or trade, then the
new
case of
if
we banned
is
a certain
equilibrium, even if it were Pareto sub-
optimal^, need not be Pareto inferior to the original equilibrium. Hence, if our only policy
choice was whether to have this ban or not, then on purely Paretian grounds
have no unequivocal answer.
combining
We will
this theoretical result
The reason why
I
in this case
manage
to get a policy
with a normative criterion that
formally derive the harassment
lemma
I
we would
conclusion by
spell out later.
is
therefore not because
of its novelty, but to draw attention to certain features of the result and in order to prepare
the ground for the use of the normative criterion. There
result is
well-known
understood, or so
I
in equilibrium analysis, its
will argue. In fact sections 3
theoretic scrutiny of whether and
is
another reason. While this
economic foundations are not welland 4 are devoted
to a formal
under what kinds of circumstances can
we
game-
realistically
claim that a collection of individual, desirable acts can be undesirable. Thus the
harassment lemma provides motivation for the next sections.
Since this
is
a competitive
model
all
agents are assumed to be price takers.
assume, without loss of generality, that there
production function
is
is
one employer (and so only one
firm).
given by
Gaertner, Pattanaik and Suzumura, 1992). In this paper the Pareto-inclusiveness of social welfare
judgments
is
adhered to
in all cases
except
when
the Pareto criterion
is
^e/f-contradictory.
I
shall
His
8
x =
where n
is
the
f'(n)>0. f'(n)<0,
f(n),
number otlaborers employed and
x
tlic
{])
amount of output produced.
Let us begin by considering the case where sexual harassment'"
that case
it
is
labor market,
reasonable to expect that two kinds of wages will
wn and wh, where wn
contract will receive and
wh
is
is
the
wage
the
wage
that a
that a
come
is
allowed.
In
to prevail in the
worker who signs a no-harassment
worker who
is
willing to submit to
harassment will receive.
Let 9 be the amount of benefit or 'perverse gratification', measured in output
units, that the
case where 6
true.
employer gets from being able
>
0, since the interesting issues
under the no-harassment contract (N-contract,
contract (H-contract) then his total payoff, n,
and only
Wh > Wn +
9, the
is
indifferent
N-contract
and nn under the harassment
is
given by:
wn - nH wh + nnQ
(2)
9
(3)
if
way, then the H-contract
will
it
this
in equilibrium.
check
If,
on the other hand,
example we will assume
So
let
that the
us assume that the market wages
that the firm's first order condition will
f (nN
Which
contracts. In fact under
preferable to him. If the inequality goes the other
be preferred. In
parameters are such that (3) holds
are such that (3) holds" and
H and N
between the two kinds of contracts.
is strictly
this is
in brief)
holds will the firm be willing to employ laborers under
employer
when
employer gets n^ employees
Wh = Wn +
(3) the
focus on the
if the
nH) = f(nN + uh) - Un
In solving this, note that if
We
concerning harassment arise
Hence, faced with the above market wages,
7i(nN,
each employee.
to harass
+ nn) = wn.
be given by
(4)
need not be, especially since the economy may have several competitive equilibria and a ban on
a certain kind of trade could merely deflect the
economy
to a different equilibrium.
worth reminding ourselves that what we are speaking of throughout is contractual or 'voluntary'
sexual harassment, that is, one where the fact that workers will be harassed is commonly known or is made
clear to prospective employees before they join work. And all references, henceforth, to 'sexual
harassment', are to be taken as references to 'contractual sexual harassment'.
It is shown below that this is not really an assumption but will turn out to be so in equilibrium.
It is
Hence
the firm will be willing to
employ any combination of N-contract workers
and H-contract workers as long as the numbers sum
now
Let us
workers
is
turn to
interval [0, P]. Let c(i)
means
that
nN + nn which
modeling the employees. Assume
given by the integer P.
>
to
faces are, respectively,
i,
i
that, for all
e
i, j
[0, P], if j
faced with the market wages,
wn and wh - c(i).
pain of harassment associated with that
i.
wn
<
i.
>
c(i)
then
will be assumed, with
i,
then c(j)
>
it
c(i).
and wh, the net wages she
Each worker
contract.
If c(j)
It
In other words, a 'net wage'
wage
of
be an element of the
to
denote the cost of harassment to worker
only a slight loss of generality,
For each worker
that the population
We shall think of each worker
employee] finds harassment more painful than
satisfy (4).''
is
a
wage minus
the
will take the job that
offers a higher net wage.
I
shall use s() to
a job with net
assumed
wage w,
that s'(w)
If the
>
denote each worker's supply curve of labor. If employee
the
amount of labor she
i
g
market wages are given by
[0,
is
given by s(w).
It
takes
will
be
0.
aggregate supply of labor. Define
worker
will supply
i
wn and wh,
v(c) as the inverse
it
is
now
easy to work out the
of the function
Note
c(i).
i(wh - wn)] will opt for the N-contract and every worker
i
that every
e (i(wh - wn),
P] will opt for the H-contract. Hence, the aggregate supply of workers seeking no-
harassment jobs
is
given by:
i(wh - wn)s(wn) =
And the
A
aggregate supply of workers seeking harassment jobs
is
given by:
p
Js(wH-c(i))di=B.
We are now in a position to fully characterize the labor market equilibrium.
Assume
is
such that
<
i(6)
<
P. This
assumption guarantees that there will be a
separating equilibrium (with (3) being true in
If
we had begun
it).
with a market with several employers
we
could have had an equilibrium
firms employ only no-harassment employees. Given our current concern
assume
that there
is
only one firm and
it
offers both kinds of contracts.
it is,
in
which some
however, harmless
to
in
(w*^,
,w*n)
an cc/uilihriuin
is
type of work (that
if,
given these wages,
demand
equals supply for each
with and without harassment). This translates into the following
is,
formal condition.
(wj^,w'^)
IS
an equilihriiim
if w'y^
w^
and
satisfy:
WH=WN+e
(5)
and
p
d(w;) = i(e)s(w;)+
js(w;+e-c(i))di,
(6)
1=1(6)
where
d(-) is the
inverse of f '(•)•
To understand
J(w^ ) =
since
/
(w^ ) =
'
supply of labor and
the fact that
(6) note that the left-hand
"aj
+
"//
derived by
is
w^ - wj!g =
9,
by
'
by equation
summing
(5).
Observe
all
The right-hand
demand
side
is
for labor,
the aggregate
is
indifferent
between the two
equals aggregate supply,
we know that
and H-contracts will be equal.
above equilibrium
of Wn (and not be harassed) and
the aggregate
and B, defined above, while making use of
demand
for both N-contracts
that in the
(4).
is
Since the employer
kinds of contract, as long as aggregate
demand and supply
A
term
all
laborers in [0, i(9)] will get paid a
laborers in [v(9), P] will get paid
wh
wage
(and be
harassed).
Let us
harassment.
profit
is
now
consider a labor market in which there
Then
if the
given by f(n) -
firm employs n workers and pays a
wn
Hence,
w
is
is
a law prohibiting sexual
wage of w
to
each worker,
its
and profit-maximization implies
f'(n)
Since there
is
=
w
no harassment, aggregate labor supply
(7)
is
equal to Ps(w).
an equilibrium in a regime where harassment
is
prohibited if and
only if
d(w*)
Now that we have
(that
is,
lemma,
=
Ps(w*).
characterized the labor-market equilibria for the two regimes
with and without an harassment law), to complete the proof of the harassment
it
is
enough
to
show
that
(8)
11
w;
w* >
Let us assume that this
is
not so. That
w*N
This impHes d(w*j^) < d(w*), since
f<
(9)
is:
>w*.
Hence,
0.
p
Js(Wn +e-c(i))-di<Ps(w*), by
i(e)s(w*N)+
(6)
and (8).
i=i(e)
Therefore,
p
Js(w; + e - c(i))
•
di
< [p - i(e)]s(w* ),
(10)
i=i(9)
> i(9)s(w*).
since v(9)s(w*f^)
Note
that, for all
>
j
i(9),
9 >
c(j).
Hence w*^ + 9 - c(j) > w*, and
s(w N + 9 - c( j)) > s(w
*
>
for all j
),
therefore
i(9).
This contradicts (10) and so proves that (9) must be true.
This implies that
if
we
begin with a regime
prohibited and then switch to one where there
belonging to
(9)
we know
[0, v(9)] will
be worse
that they will
off.
which sexual harassment
no such prohibition,
all
Their wages will change from
be worse off in the
find sexual harassment strongly painfiil
is
in
latter case.
would be
is
employees
w
In other words,
to w*^
and by
employees who
hurt in the labor market if harassment
were allowed.
It is
worth noting
exact set of people
we may
who
write [0,i(w*„
persons in
[0, v(9)] will
that [0, i(9)] are not the only people
will
be worse off is given by
- w')] =
[0,i(9)]vj[i(9),i(w*^
be worse off So
regime where harassment contract
net
wage of
w*^ -c(j). Since
classes of workers
who
are
c(j)
is
now
allowed,
> w*^ - w*,
w'^^
.
be worse off The
Since
w
We have already
[i(9), i(
would choose such
worse off in a regime
refuse to submit to harassment and
-w')].
will
- w*)]
[0, i(w|^
consider j e
j
who
-c(j) < w*
.
w*„
- w*)]
a contract
.
>
w'^
,
seen that
In a
and so get a
Hence, there are two
that permits harassment.
some among those who choose
All those
the harassment
who
12
contract (these are the people
who choose
who
efficient society,
it
is
to sign a
in a
Pareto
not the case that permitting harassment results in a society which
Now, begin from
agreement
from among the people
easy to see that permitting harassment results
it is
Pareto superior to one in which harassment
i,
painl'ul,
the harassment contract).
Hence, while
employee,
more
find harassment
a regime in
is
prohibited.
which harassment
harassment contract. That
that she will
be paid a certain
is
is,
is
not permitted, and allow one
she and the firm get into an
wage (presumably, one
that is
above the
'market' level) but must be willing to subject herself to sexual harassment. Since each
person
e
i
[0, P] is like
an atom
(Aumann, 1964). Hence,
this
in this
economy, what
i
does has no effect on others
one person signing an harassment contract must constitute
a Pareto improvement over a regime in
which sexual harassment
is
totally forbidden.
This establishes the harassment lemma. Allowing one employee to sign a
harassment contract leads
to a Pareto
in general does not lead to a Pareto
Hence,
if
harassment, but,
one
one
if
that prohibits
contradiction.
is
a
improvement but making harassment contracts
improvement.
committed Paretian, one cannot stop single
one has
to
acts
of sexual
choose between a law that permits harassment contracts and
harassment altogether, one
may choose
So what the harassment lemma establishes
the latter without running into a
is
that
we
can believe
Pareto principle and defend a legal ban on sexual harassment." This does not
we
already have a case for banning harassment, but simply that
instance,
''
legal
we need not,
in the
mean
that
in this
be committed to the principle of no government intervention.
Some may
contest this by equating Paretianism with a preference for any Pareto optimal state over a
Pareto sub-optimal one. Hence, one
may
argue that a regime with a ban on harassment
is
likely to be
Pareto sub-optimal and so be worse than a regime with no ban. However, this involves a faulty
which declares a state x to be preferred to state y if everybody in x is at
y and some people in x are better off. The fact that x is Pareto optimal and y is not
does not guarantee this. One may try to counter this by pointing out that a regime with no ban will be a
interpretation of Pareto's criterion,
least as well off as in
potential Pareto improvement over a regime with a legal ban on harassment, in the sense that those
gain can compensate the losers and
still
retain
some of their
improvement
is however not evident to me. If it is
system of taxation) compensate the losers, then we
improvement; we can appeal to Pareto improvement
gainers will not compensate the losers, then
that they
it
The
who
of a potential Pareto
the case that the gainers will (voluntarily or through a
do not need to invoke the criterion of potential Pareto
is
gains.
directly.
not clear
why
If
ethical appeal
on the other hand
it is
the case that the
there should be any comfort in the thought
can do so (see also Sen, 1970, Ch. 5). I shall therefore equate Paretianism with the criterion
y, then x must be socially preferred to y.
X Pareto dominates
that, if
13
This should
come
no surprise since by Hume's
as
propositions can never be deduced
need
to
Law we know
that
normative
we
from purely positive propositions. Hence,
combine the harassment lemma with some normative
will
priors in order to reach such
a conclusion.
To develop such
a normative criterion
individual preferences.'"* This
unwittingly,
we do
is
we need to
not an easy task but
(and actions following from them) as
'legitimate'.
is
we do
First note that
this quite often.
it
attach moral values to
helped by the fact
that,
speak of certain preferences
Thus we often say things
like: "Hillary
has the right to prefer Bill over George" or "Jack has the right to work as a mercenary".'^
What
germane
is
legitimate preferences.
my
to
analysis here
is
to
draw
shall say that a particular preference
I
has the right to that preference, while
On the
for having this preference.
recognizing that
between two kinds of
a distinction
is
he or she
maintainable
may
have
to
if a
person
pay a price
other hand, an inviolable preference will be defined as
a preference which not only does a person have the right to have, but he or she should not
have to pay a price for acting on the basis of that preference.
legitimate for
Immanuel
this in the sense
that
preference.
that
he
of a maintainable preference. That
to incur
is,
any financial
we do
birth";
not
loss as a
at
say that
we
the
"It is
typically
mean
same time claim
consequence of this
We recognize that he has the right to have this preference but also recognize
may have to pay some
On
town of his
to live his entire life in the
Immanuel should not have
When we
the other hand,
from work, we
(that
price for this.
when we say
most of us) mean
is,
inviolable preference.
Not only can
pay a price for having
this preference.
Sen (1972) has argued
that a father has the right to
that morality
this in the stronger sense
keep his child away
of this being an
the father have this preference, he should not have to
can be thought of as
a
meta-ordering - that
is,
an ordering over
all
possible preference orderings.
'
In the discourse
to 'actions'.
But
on
rights
we
typically
to the extent that
for that matter, not defensible,
it
we do
is
do not speak of a person as having
rights to 'preferences', but only
think of certain preferences as legitimate or morally defensible or,
not unnatural to extend the language of rights to preferences as well.
could have stated most of my argument in terms of rights to actions alone, but that would entail
convolutions, which seem to
me
to
be unnecessary.
I
14
There
no reason
is
of us will agree as
to believe tliat all
inviolable. This will differ across individuals
be a
lot
But
societies.
I
preferences are
expect there will also
of common ground.
Most of us,
harassed
those
and
to wliieli
seems
to
me, will agree
that one's preference not to be sexually
an inviolable preference. In any case the argument
is
who
it
in this
paper
is
meant
share this normative position.
The harassment lemma, coupled with
preference not
to
be harassed sexually
is
the normative
axiom
that a person's
inviolable, completes the case for a legal ban on
sexual harassment. The harassment lemma establishes that allowing free contract
harassment leaves people with strong aversion
be
to
in a
for
to
in
harassment worse off than they would
regime where harassment was legally banned. In other words, such people have
pay a price
for their preference.
If we are
harassment as an inviolable preference,
we
one has to pay a price for such aversion'
.
committed
are
to treating one's aversion to
committed
to
having a regime where no
This justifies having a law banning sexual
harassment.
It is
who
some
important to emphasize
banning sexual harassment
get harassed.
is
special features of the model. First, the case for
being justified here only partly by the suffering of those
The model draws
attention to the suffering of those
harassed and therefore do worse on the labor market.
It is
those
who
who do
refuse to be
not submit to
harassment and face an inferior labor market condition (along with some of the people
who
submit
to
harassment but would be better off in a world where no one had to face
such a choice) that provide the basis for legal action, according to the argument
developed here. In other words, though the ultimate policy action being recommended
the
same
as that
the basis of the
many
writers in the law and economics profession
recommendation
is
would recommend,
very different here. If we were to go further and
consider paying compensation to those
who
is
to
suffer because of sexual harassment in the
market, the recommendations stemming from this model would begin to diverge from
that
which comes from the law and economics
There
is,
preference.
literature.
some ambiguity about what it means "to have to pay a price" for having a particular
The ambiguity occurs when the set of available policies is arbitrary and one is free to consider
admittedly,
15
That
this is a
fields. Consider the
genuine
shift
of focus one can see by examining debates
problem of hazardous jobs. Should workers be allowed
such jobs (many workers
may prefer this
in other
to opt for
because they find their poverty more grueling
than the pain of such a job)? In answering or examining this question, the focus
invariably on the workers
paper on
who
is
take up such jobs. Cohen's (1987) thought-provoking
has precisely this focus.
this subject, for instance,
am
I
arguing that in
considering the general question of whether such jobs should be allowed or whether firms
should be compelled by law to take safety measures, a crucial constituency
workers
who
who do
currently have such jobs, but those
is
not the
not.
Secondly, what makes our model distinct from a model of prostitution
is
that the
sexual contract and labor market contract are here interlinked. If one could separately
contract for labor and sexual services, there
to providing sexual services to
would be no reason
be underpaid for
their labor services.
does not carry over to a case for banning prostitution, nor, as
banning trade
in
body
Some may
compelling
rule.
to expect persons averse
we
my
argument
shall presently see, for
parts.
balk at the use of this normative criterion that
But
Hence,
that is a criticism that
would hold
is
not founded in any
any policy
for
prescription.
Consider the standard economist's ploy of using externality as a reason for intervening in
the market.
Note
that the existence
of a negative externality associated with an action
does not automatically amount to a case for stopping that action. What the negative
externality does
to ensure that
is
society. In fact the
two worlds
that action are neither Pareto
room
to
that action
that are created
But
does not result in a Pareto inferior
by banning
dominant over the
for a possible intervention.
combine
banning
other.
The
is better.
And
and not banning
externality therefore
to justify the intervention
the observation of the externality with the use
deciding which of the two worlds
that action
we
cannot escape having
some normative
this is exactly
makes
what
I
have
criterion for
tried to
achieve here. The case against a legal intervention in the labor market that economists
make by
From
using the Pareto criterion alone gets destroyed by the large numbers argument.
there to actually
any imagined policy.
make
a caseybr intervention,
In this context,
however, we assume
we need more
that the only
normative
two policy options are
to
ban
16
ammunition.
do
in this
Tlie
section
subjective element ui this part
is
simply
to whittle
more limited zone, by separating out
and
a
paradoxical.
that the
all
I
have
tried to
the 'adhocness' of earlier arguments to a
a positive
It
normative prescription
component (which cannot be contested)
that
comes out of this model
is
somewhat
maintains that each single instance of sexual harassment results in a
Pareto improvement but a large
improvement. Hence,
it
unavoidable, in brief,
normative one.
Note
not,
down
is
must choose the
equilibrium theory.
if a
government has
latter.
It is
number of sexual harassments
This
to
is
not a Pareto
choose between permitting harassment or
last result is a bit
of a quirk of competitive general
not totally clear under what conditions
it
is
valid.
It is
therefore
worthwhile scrutinizing closely the kinds of settings where single acts affect social
welfare in directions contrary to what collectivities of such single acts do, a problem that
has been discussed
The next
of Parfit (1984) (see also Neeman, 1999).
in the classic study
sections attempt precisely this
by constructing game-theoretic models.
While game models lack some of the richness of competitive equilibrium models, they
have the advantage of being more transparent when
between single
two very
acts
and many
distinct routes
- one
acts.
I
will explore
that relies
it
comes
how
to
examining the conflict
the conflict can be explained via
on the properties of an
infinity
of decisions
(Section 3) and another on the intransitivity of indifference (Section 4).
3.
Acts and Rules
3.1 Introduction
A question that is central to my analysis but gets only cursory attention in
competitive equilibrium analysis
is this: Is it
possible, or
logically possible, that if a single pair (any pair, that
there
is
a Pareto improvement, but
when
harassment or not, and therefore the procedure
I
is)
more minimally,
at least
of individuals sign a contract
a class of pairs of people sign such contracts,
am describing
is
unambiguous.
we
17
do not have a Pareto improvement
if
the answer
is
we make
yes, can
(that
1988).
as
having a
My aim
'large'
in this
set of them can occur.
What
this
how
One
version needs
is
this conflict
individuals are
is
yes
if
we
worse
which
off)?
And
this is so?
conceive of the
(see Hildenbrand
and Kirman,
to provide a formal game-theoretic
between
version of this idea
that there
is
question
first
number of players or agents
and the next sections
understanding of why and
some
transparent the assumptions under
We know that the answer to the
economy
least
is, at
is
a series of individual actions
developed
be a countably
infinite
in subsections 3.2
and the
and
number of individuals
3.3.
(the set
of players does not have to have the power of the continuum). The assumption of an
infinity
of agents
is
of course
First, this is a fairly
theory (see
Aumann,
possible to
show
individuals
we have
unrealistic.
standard
way
1
can offer three remarks in response.
to describe a competitive
economy
in
economic
1964; Mas-Colell, Whinston and Green, 1995). Secondly,
same argument holds
that the
if instead
it is
of an infinite number of
an infinite number of possible contracts that a
finite
number of
individuals can potentially sign. Thirdly, and
most importantly, we can get a similar
result with a fully finite society
we
relations
provided that
which may not be representable by
allow individuals to have preference
a real-valued utility function. This
is
the
subject matter of the next section.
3.2
A
Simple
Game
The simplest way
to illustrate the different
sexual harassment contract and
formal game-theory model
ignore harassers in this
is
game
(ii)
allowing sexual harassment contracts in general, in a
to consider a
(or
game among
potential harassees. That
keep them in the background). Barring
will tell here is similar to that in Section 2.
formal
normative status of (i) allowing a
The important
difference
is
is,
we
this, the story I
that this
is
a
game model.
Suppose there
of generality assume
is
N
a countably infinite set,
is
N, of potential harassees. Without
the set of natural numbers.
Each harassee
or,
henceforth,
player has to decide whether to sign a sexual harassment contract (strategy 1) or not
loss
work
ITa player aeeepts a harassment contract,
()).'''
(strategy
knowing
for a tlrm
that the
Hence, a strategy tuple
Xi
e
{0,1
A
denote the
to
Given a strategy
an inllnite vector x =
=
=
Xi))
Next,
define player
The game
Property
1.
i's
payoff or
that
we
are looking for
whether or not j decides
For
all
i,
j
e N,
have the property
to
(the non-signers) will
Property
j
e
S,
Xj
2.
=
At
i
?^j,
To
:
A
I
is
=
x]
)
to
replaced with x.
denote a
.
Note
that
be worse
->
iR
to sign the
and for
off.
and
=
yj
be a mapping
,
must have the following properties:
all
1
and, for
sight Properties
game
harassment contract
this
has no
=
x g A,
U,(x/(Xj
1
0)).
numbers argument. That
is,
we
sign the contract then others
Formally,
eN
all
=
number of people
that if a 'large'
exists a set S
first
and
i
e
N
-
S,
such that
k e N-S, Xk = yu =
0,
if x,
y e
A
such
that, for all
then Ui(y) < Ui(x).
and 2 seem irreconcilable. However what follows
is
a
that satisfies both these properties.
elaborate further, strategy
Strategy
element
i'
to illustrate the large
There
description of a
her.
e N,
Formally,
i(?y).
Next we want the game
it
i
signs a harassment contract.
utility fiinction to
U,(x/(Xj=l))
want
all
of real numbers.
on player
externality
where, for
x.
we
9i is the set
First,
i
(xi, xo,...),
tuple x and a strategy x\,l will write x/(xi
Ui
where
that she is agreeing to
of all strategy tuples.
set
strategy tuple identical to x excepting that the
(x/(Xi
means
will sexually harass her at the workplace.
and the value of Xj denotes whether or not
}
shall use
is
employer
this
1
entails agreeing to
can mean two things, the distinction
work
is
for a firm
knowing
unimportant for
this
that the
game:
It
employer may harass
could represent
19
Let
^
,
h e
31
be such that
i
<h. Now,
for all
i
e N, define
+ g,(Xi),
if2]Xj=co
h + g,(x,),
if^^Xj <Qo
'
Uj as
follows:
u,(x) =
where
gi
=
{0,1
->
}
??
defined, then Properties
S Xj
<
easy to check that if players have payoff fiinctions, as just
It is
.
(11)
and 2 will be
1
Hence, (11) implies Property
00.
To
see
some of the
Consider the
satisfied'^:
must be
1
Next,
true.
function of a player
utility
let
S be the
set
as just defined
by
(i.e.
(1 1))
gi(l)>g,(0)
ifiisodd
gi(l)<gi(0)
ifiiseven.
and, in addition,
and
Now
suppose the players are made to play
unique Nash equilibrium (which happens to be
game. Clearly the game has a
this
strict),
where only and
all
odd-numbered
players accept jobs which expose them to sexual harassment.
What
are the welfare properties of this
Nash equilibrium? That depends on
parameters. In particular, the following proposition
The Nash equilibrium
in the
above game
is
is
the
easy to verify.
Pareto optimal if for every
I
that
is
an
odd number
now
Consider
"
"'
the
outcome
^+g,(l)>h +
in the
above game when there
now
i
now that
reversed.
for every
I
the inequality in (12)
equilibrium in a regime where there
sub-optimal but
it is
is
no
(12)
g,(0)
sexual harassment. Evidently, every player
is
will
is
a law that prohibits
get a utility of h
+
Then not only
the
legal prohibition
is
g,(0).
Suppose
Nash
on sexual harassment Pareto
Pareto dominated by a regime where sexual harassment
is
prohibited.
choosing to work for a firm
that
pays a lower
wage
but guarantees no harassment or
it
could denote being
unemployed.
'*
This game has some structural similarity
(1994),
to
what was described
as 'Escher's Waterfall'
and some x e
of all odd numbers; and
policy dilemmas that can arise in this game, consider the case
where the payoff functions are
i,
game
in
Basu
i
be an
Z
20
Hence,
it"
we were
deciding on whether to proliibit sexual harassment or not, by
using any social welfare criterion which happened to be Pareto inclusive,
prohibit sexual harassment.
one odd-numbered agent
improvement; but
if
we
Of course,
to sign a
if,
starting
harassment contract,
whenever such an exception resulted
up
which
prohibition. This
is
is
achieve a further Pareto
of the law
to allow for
improvement, we would end
in a Pareto
a paradoxical sounding result but
it is
germane
to the construction
of
and some other labor market practices, such as
to excessive hazards.
Judgment by
3.3
we would
we allowed
Pareto inferior to what would prevail in a regime of a total
a principle for banning sexual harassment
exposure
a prohibition,
started this 'opportunistic' adjustment
'exceptions'
in a state
from such
we would
Social Welfare Function
In the previous section
spoke of policy interventions and the Pareto
1
criterion,
without explicitly invoking the notion of a social welfare function (SWF). At one level,
this
SWF
causes no problem because there does exist a Pareto-inclusive
remarks made
some
The trouble
in section 3.2 are valid.
we
other reasonable axioms that
We know from earlier works
Akademi,
1
SWF to
expect an
soon as
(see, for
we
which
try to
I
possible sequences of welfare.
it
will
arise.
in section 3.2, note that {rj}jeN is a possible
e mj(A), for
Then
shall
example. Diamond, 1965; Segerberg and
axioms and under which the large numbers problem can
Tj
in
SWF that satisfies some minimal versions of these
be shown here that there does exist an
sequence of welfare as long as
the
and anonymity
976) that these axioms can easily run into inconsistencies. However,
Using the same motivation as
all
throw
In this section
satisfy.
SWF that satisfies the Pareto
investigate the possibility of using an
axioms.
arises as
for
a
all
J€N. Let
SWF, W,
is
a
be the collection of all
Q.
mapping
W:D^9^.
Given two
for
vectors, r
somej; and write r
>>
The next property
Property 3 (Pareto): For
and r',\ shall write r>r',
r', if r,
>
r,',
for all
r
'
g Q,
r
>
>r,'
,
for all
i.
states the standard Pareto
all r,
if r,
axiom.
r' implies
W(r) >
W
{r').
i,
and
r,
>
r,',
21
It is
easy to show that there exists a
Suppose
satisfying Property 3.
SWF
is
game
satisfying Properties
1
that individual utility functions are given
and 2 and
by
(1 1)
SWF
a
and the
defined as follows:
For
all
r e
J
O, W(r) =
SV^,, where 5g(0,1).
/=0
Hence,
we have
game and an
a
establishing the possibility of the large
One problem with
equally. Since person
person
1
's utility
numbers problem.
An SWF
should minimally require
is
and a permutation function,
=
r',(
Anonymity
utility
by 5(<1), a change
much
larger
not very attractive.
is
in
What
the property of finite anonymity.
S—>
;
is
Q are such that there exists a finite set S N
S, so that for all
jeN-S,
equivalent to Diamond's (1965)
When summing
generations".
a-j=
r) and for
all
ieS,
will do here
what
1
is
need
to pare
down
the Pareto
to sustain the large
Property 5 (Weak Pareto): For
such that for
ally'e S,
rj
=
The question we
Properties
1
and 2 and a
1
and r
for all
all
j
=
This has been
axiom
to
known
What
for a long time.
something more minimal
(essentially,
numbers argument) and then demonstrate existence.
r,
o,
r
'
e Q,
and
are interested in
SWF
axiom of "equal treatment
over infinite streams this assumption turns out to be very
strong, easily yielding impossibility results.
just
and 2's
1
treat all individually
),thenW(r; = W(r').
Finite
I
does not
with such interpersonal inequity
Property 4 (Finite Anonymity): If r, r'e
r,
by
multiplied
it
has a larger impact on social welfare than person 2's and
than person lOO's.
we
satisfying Properties 1-3, thereby
SWF just specified is that
the
's utility is
1
SWF
is
if r
for all
»
N
r or there exists a finite set S
'
/eN-S, n = r
'j
,
then W(r)
> W(r').
whether there exists a game satisfying
satisfying Properties 4
and
5.
Note
that the question
of the
22
existence of such a
the
is
game
that
game and
the existence of an
determines the domain, Q, of the
SWF
are connected by the fact that
SWF, The answer
to the
it
is
above question
yes.
To prove
defined by
this first
consider a
and, further
(1 1)
/
+
gi(0)
=
in
0,
/eN. Hence the domain of the SWF,
for all
satisfies Properties
1
and
proved
in
which the player's payoff function
l
+
g,(\)=Uh+ g,(0) =
Q=
{0, \,2,
Wliat remains to be proved
2.
2, 3}'^ satisfying Properties
result
let
game
4 and
5.
4}'^.
is
this
/?
is
+
gi(l)
=
3,
The game just described
that there exists a
The next lemma, which
Basu and Mitra (2002) establishes
2 and
is
SWF on
a direct corollary
{
1,
of a
and thereby completes the proof
of my claim.
Lemma
:
There exists a
(i.e., finite
What happens
to
3}'^
we
to the existence result if
full
->
9^,
we
strengthen the
which
4 and 5
safisfies Properties
strength Pareto
axiom (Property 3)?
It is
weak Pareto axiom
shown
was imposed by Diamond (1965). However,
be a consequence of the real-valuedness property of the
SWF we seek a social welfare relation, that
"socially as desirable as"),
which
is
is,
a binary relation, R,
in
Basu and Mitra
SWF to fulfill
get a non-existence result, even without requiring the
continuity property as
happens
1, 2,
anonymity and weak Pareto).
(Property 5) to the
(2002) that
SWF, W:{0,
any
the non-existence
SWF.
on
If instead
of a
Q (representing
complete, reflexive, and transitive, then the existence
problem disappears (Svensson, 1980). In other words, the well-known problem of
reconciling Pareto and
SWFs. Once we drop
mutually compatible.
Anonymity
that representability
we have
axiom
is
is,
requirement these axioms turn out to be
into the compatibility
undertaken
in
numbers argument,
some of the claims made by
however, established when the number of potential contracts
infinite.
of anonymity and
Basu and Mitra (2002).
established the technical validity of the large
thereby providing a formal foundafion to
this
because of the representability property of
A more detailed enquiry
different variants of the Pareto
In sum,
arises
is
Parfit (1984). All
assumed
to
be
23
Games
4.
It
contract
was demonstrated
may be
may however
different
with Quasi-Transitive Preference
in Section 3 that the
from the moral
status
moral status of each single act or
of a class of such acts or contracts.
object to this demonstration on the ground that
existence of an infinite
number of potential
it
contracts. Indeed
was based on
Some
the
some may consider the
realism of the economist's model of competitive general equilibrium to be suspect
because of the assumption that the action of each individual has no effect on market
variables, such as prices, but the action of a collection of individuals does
have an
effect.'"
It
will
be argued here
that the
problem of infinity
is
avoidable if we relax the
usual assumption of human preferences being transitive and allow individuals to have
quasi-transitive preference, instead.
if,
whenever he prefers x
The important aspect
that the latter
in
to
y and prefers y
which
transitivity
but prefer x to
it
is
also the case that he prefers x to
of preference
differs
may be
indifferent
from
z.
quasi-transitivity
transitive.
is
Hence, a person
between x and y and between y and z
z.
Though most
assumption.^**
to z,
does not require the indifference relation to be
with quasi-transitive preference
introspection
A person's preference is said to be 'quasi-transitive'
shows
social scientists are trained to believe otherwise, a
that the transitivity
Most people
will
of indifference
is
little
a remarkably unrealistic
be indifferent between a cup of coffee with
1
grain of
sugar and a cup of coffee with 2 grains of sugar; and, more generally between a cup with
n
grains and a cup with n
and n +
+
1
grains.
But they will not be indifferent between n grains
m grains, when m is sufficiently large.
Recognizing
this is a
good way
to reconcile
two standard assumptions of the
competitive market model, namely, that an individual's action does not affect another
person's welfare and that the actions of a collection of individuals
may well
effect the
welfare of someone not belonging to this collection.
For an interesting discussion of the philosophical basis of this assumption, especially
its
relation to
methodological individualism, see Arrow (1994). Philosophical objections to the use of infinity to model
'large number' was stressed to me by David Lewis (personal communication dated January 15, 1990).
24
I
however here use
shall
model but
the assumption otquasi-transilivity not in a competitive
game model.
in a
Return to Section 3.2 and
now assume,
way
of players
that the set
first,
the
all
to the definition
N
is
and
this is finite
endowed with preference
a utility function, individuals are
be the collection of all k-tuple of strategies. Hence,
Formally, every player
A
.
That
is,
cz
>-
A x A and
interpreted as 'player
i
notational simplicity
I
>-
(V x e A x
,
all
'i-variants'.
i
e
That
Now, we
Property
6.
N
is,
,
>-
let
x)
>-,.
,
e
>-
(xi,....,Xk)
endowed with
,
which may
It is
x>>-j
(x,y) e Dj if
N
Let #
A where
e
,
also be written as x
e {0,1}.
Xj
good
>-
of
= k and A
a binary preference relation
assumed throughout
y and y
us use Di c:
that, instead
y,
is
y on
to be
as strategy tuple y. For
denote the symmetric and asymmetric parts of
complete (Vx, y e
€ A,
are ready to
If (x,y)
is
shall, henceforth,
quasi-transitive (Vx, y, z
For
(x,y)
N
and second
relations.
finds strategy tuple x to be at least as
by, respectively, ~i and
reflexive
e
i
of a strategy tuple. But
AxA
and only
if
)-|
to
Vj
that, for all
A where
,
x
z implies x
t^
y,
>-,
x
z
i
>-
e
N
,
y or y
>-
is
>-
x) and
).
denote the set of all pairs (x,y) which are
;^ i, Xj
=
yj.
impose some properties on individual preferences.
e Dj and j ^
i,
then x
~j y.
This simply formalizes the standard assumption of no externality in competitive
markets. That
is,
whether or not
i
signs a harassment contract, person j {^
welfare change for herself Property 6
is
the counterpart of property
1
i)
in the
perceives no
absence of a
utility function.
Next consider:
'
There
is
a small literature that points this out.
See, for instance, Armstrong (1951),
Majumdar
(1958).
25
Property
Vme
,n},(x"',x'"^')e Dj, for
...
{1,
If
There exist an integer n >
7.
were
>-
transitivity
of
What
this
the
i
e
N and
{x', x^,..., x"^'} cz
some j g N-{i}, where x^ =0,
transitive Properties 6
makes
>-
1,
that if a large
is
such
that,
x™"' =1, and
and 7 would not be compatible; but the quasi-
two properties compatible
property 7 says
A
in
an obvious way.
number of people sign harassment
contracts
can cause a perceptible difference for the worse in the economic environment for
some
individuals
Section
i.
A
demonstration of this in a standard economic model occurred in
2.
Let us
now
commas
inverted
analyze the possible outcomes of this 'game'.
I
write 'game' within
to remind the reader that these are games with no payoff functions but
binary preference relations over the outcomes, where the preference relations are
reflexive, complete
and quasi-transitive. There
a substantial literature in economics on
is
aggregating quasi-transitive individual preferences (see, for instance, Sen and Pattanaik,
1969; Pattanaik, 1970; Fishbum, 1970). But there
is
very
little
on 'games' with quasi-
transitive individual preferences.
To
7
i
see the kind of results
is
true for
G
N
,
n=
if (x,y)
2.
G
we
can
get, consider the case
In addition to Properties 6
Dj,
and
In this 'game', the
Xj
=
1
,
y,
=
0,
then x
Nash equilibrium
is
and
>,
7,
where k = 3 and property
assume the following
is true:
For
all
y.
clearly given
by
(1,1,1).
However, we can
think of individual preferences compatible with Properties 6 and 7, which imply that each
individual prefers (0,0,0) to (1,1,1). Let us assume that this
Pareto dominates (1,1,1). Hence,
to
if a
is
government committed
the case.
Then
(0,0,0)
to the Pareto criterion has
choose between a law disallowing sexual harassment and no such law,
it
should opt for
having such a law.
Suppose such a law
Property 3) that (1,0,0)
and
(
1
,
1
,
1
) is
is
is
in place
and so the outcome
is
Pareto superior to (0,0,0); (1,1,0)
Pareto superior to
( 1
,
1
,0).
Hence,
this
(0,0,0).
is
It is
easy to see (by
Pareto superior to (1,0,0);
game has no Pareto optimal
26
outcome. Therefore, \vc no longer have a compelling case
improvement,
change
that if a
a I'arcto
is
must be allowed. By the Pareto improvement criterion we would never
it
reach a conclusion.
One way of overcoming
this
work with what may be described
ordering which
may be
is,
is
to override
consumer sovereignty and
as each consumer's 'subliminal preference', that
thought of as the
perceived preference, that
More
problem
'true'
the preference that
we have been
possible subliminal preferences that could have generated
S(
where
)
is
an ordering such
the asymmetric part of
is
Since
relations that
S(
)
implies that
we have been
that social decisions
and P
is
is
an
preference underlying a person's selftalking about
fomially, given a person's (self-perceived) preference relation,
= {R R
is,
is
that, for all X, y,
,
all this
time.
the set of
defined by
x
xPy},
y
the asymmetric part of R.
an ordering, the (self-perceived) preference
Now,
considering above cannot be subliminal.
if
we
maintain
ought to be based on individuals' subliminal preferences, then in the
above example the Pareto deadlock gets broken.
It is
now
easy to see that in the above
example, given individual preferences as described, the only outcome that cannot be
Pareto optimal under any subliminal preference triple (that
(1,1,1). If in addition
we
is,
for the three players)
prefer to treat players symmetrically, the
game being
is
fully
symmetric, the preferred outcome must be (0,0,0), justifying once again a ban on
harassment, even though consenting adults
contracts.
It is
may knowingly want
however, worth emphasizing that
sovereignty, that
is,
to sign
this entails over-ruling
harassment
consumer
the expression of individual preferences as perceived
by the
individuals themselves.
Finally, this
game
also illustrates the conflict
between act-consequentialism and
rule-consequentialism. Consider the above 3-player game, and assume that a moral agent,
committed
to
any Pareto-inclusive consequentialist ethic has
to
recommend each
player's
choice of action or strategy. If this moral agent were an act-consequentialist, he would
recommend
social
to
outcome
each agent seeking his advice that she choose action
will
be
1
over
Hence, the
(1,1,1).
However, suppose the moral agent, using the same moral principle
one but committed
0.
to rw/e-consequentialism,
as the
above
has to opt between the following two rules.
27
Rule
1:
Whenever
a person faces a choice
(action 1) and not signing
it
person faces a choice between action
he will opt for Rule
1
Since (0,0,0)
between signing a sexual harassment contract
(action 0), she should choose action 0. Rule 2:
1
and action
0,
she should choose action
Hence, the social outcome will be
.
transactions
no
is
noteworthy
that the
resort to deontological ethics as such
The
harassment.
economic
can lead to a
argument for banning certain voluntary
large
It is
arguments often
is
are.
Labor Standards and Obnoxious Markets
numbers argument, developed above, has ramifications beyond sexual
a general principle
activities
why we may want to ban
or tax certain kinds of
and voluntary exchanges.^' The standard justification used by
economists to prohibit certain activities
large
it
here founded in consequentialism (albeit rule consequentialism). There
5.
a
Clearly,
.
(0,0,0).
not only does rule-consequentialism differ from act-consequentialism but
It is
1
Pareto preferred to (1,1,1), the above example shows that
is strictly
Pareto-superior choice.
Whenever
numbers argument
is
one
is
The
to point to their negative externalities.
can be used in cases where there are no negative
that
externalities in the conventional sense.
The purpose of this section
argument
is to illustrate
other areas where the large numbers
applies. This should also help caution us
theoretical principle
is
prone to misuse
in practice.
where
it
does not apply.
externality as a justification for intervention. Since in reality there
which has no
So
is
virtually
externality, if we are looking for a pretext for intervention,
refer to the externality argument.
in devising policy
one has
A debate that has
to
Similar risks
one concerning labor standards and
we
of academic journals
rights.
Should
we
no
activity
can always
ahead for the large numbers argument.
combine theory with the
spilled out
standards? For instance, should
lie
Any
Take, for instance, the case of
we
criterion of reasonableness.
to
newspapers and magazines
legislate for
is
minimal labor
prohibit long hours of work? Should
we mandate
See Kanbur (2001 ) for a discussion of 'obnoxious markets', where, despite the exchange being voluntary,
is widespread social opinion against the exchange being allowed. One difference between his
there
28
that
workers must not be exposed
to
excessive hazards? (Jr should
matters between an employer and an employee? After
in
an hazardous environment because he finds the high
compensation, and the employer finds
why
all,
it"
wage
a
we
worker
to
leave these as
is
willing to
be adequate
worthwhile to pay the high wage,
it
work
it is
not clear
the Occupational Safety and Health Administration should stop this, specially since
this transaction
between worker
i
and employer] does not seem
to
have any obvious
negative externality on others.
In checking
there
whether the argument developed
in this
paper applies, note
first that
indeed an analogy between working in an hazardous environment and working in
is
an office where the employer sexually harasses one without seeking any quid pro quo
('hostile
environment', in legal parlance).
large
number of such
wage
structure,
one
this
contracts are allowed, then
which hurts some workers.
in Section 2, to
But
demonstrate
of the case
What we have
workers are allowed
who
because (as
It is
it
may
externality but if a
well cause changes in the market
easy to write a model, very similar to the
this.
alone does not complete the case for intervention. This merely shows
that the positive part
workers
A single contract has no
is
There
valid.
established (or,
more
to sign contracts to
is still
the normative part to consider.
precisely, can easily establish)
that if
expose themselves to excessive hazards, then
are strongly averse to facing such hazards will be
in Section 2)
is
some of these workers
will
now be
worse off This
forced to
work
is
in especially
low-paid jobs just to ensure no hazards and some workers will work for hazardous jobs
but prefer a regime where hazardous jobs are legally ruled out and so the average market
wage
in a
that
comes
to prevail is
market where there
is
somewhere
in the
middle of the range of wages that prevail
no such law and so wages vary depending on the jobs' hazard
tags.
The normative question now
crucially hinges
on whether
we
consider a person's
preference for not exposing himself to occupational hazards to be an inviolable
preference. Like any normative principle there
likely to
vary across societies and over time.
argument and mine seems
to
be
that
he
is
is
It is
no
right or
wrong answer
however arguable
willing to forego the Pareto principle in
to this. It is
that in the
some extreme
situations.
29
contemporary world most people would agree that a worker should have the right
prefer not to expose himself to very high levels of hazard and, moreover,
have
pay
to
It is
a price for
no one should
having such a preference.
not clear that a similar argument applies to
some of the other commonly-
discussed labor standards. In brief, the position being taken here
labor standards
to
which ought
to
is
be upheld by government, but not
that there are certain
the ones
all
commonly
recommended.
This does not necessarily
One may
standards are warranted.
Even though
actually
there
may
that globally-enforced international labor
legitimately have reservations against such a policy.'^^
exist an ideal set
empowering an
are unwanted.
mean
of such labor-standards intervention, the fact of
institution to carry this out is likely to
For one, unless such an
properly monitored (and,
at times,
institution
even then)
it
is
have ramifications which
democratically structured and
can be hijacked by powerful lobbies and
nations to serve their limited interest. In brief, the existence of an ideal intervention does
not automatically translate into a case for intervention.
There are
many
other areas where individuals and groups have argued for
government intervention. One such area concerns trade
man
in
who
needs a kidney and has the money to pay for
Turkey or India be allowed
exchange, but
them
this is
many
body
parts.
serious writers have
to a rich
This
it?'^^
recommended
person
is
it
in Israel or the U.S.,
a mutually advantageous
against allowing such trade.
does not appear that the argument developed
Even
Should a poor
parts.
is
to
offend
human
To
dignity
Munzer, 1994).
if
such trade
become worse off as
it is
kidney
body
an obnoxious market. To allow such a transaction
(see, for instance,
Yet
to sell his
in
is
allowed in general
is
it
a consequence. And, even if by
is
that
some people
in
not clear that a class of people
compromised
Hence, the large numbers argument does not apply to such
much poverty
paper applies to trade
some convoluted argument they
not evident that any of their individual preference
the fact of there being so
in this
trade.
feel
The
in the process.
indignity occurs in
compelled to
whereas 1 violate the Pareto principle only when it is logically impossible not
For the expression of such reservations, see Bhagwati (1995).
to
do
do,
so.
sell their
body
30
parts.
That people aetually
The
indignity.
indignity
body
sell their
may
cease to
parts
us in the face
hit
But they do not go away by virtue of this.
trade their
ban the
body
trade.
we
parts, then
If
sum,
In
if
inaiiii'estation oi'this
if
systemic
such trades are not allowed.
people are so poor that they need
to
should encourage policies to remove the poverty but not
people are not so poor and trade their body parts because they do not
adequately value them, then again there
In general
argument
mere
a
is
it
seems
to
me
is
(and this
no reason
law
for the
mere conjecture)
is
to
ban such a
that the large
sexual conduct, but not to prostitution, which entails a trade in sex alone;
work hazard (which
invariably
comes
work) but not
tied to
to
numbers
Hence,
will not apply unless there is an interlinked transaction involved.
applies to sexual harassment since this involves an interlinked contract for
trade.
it
work and
it
applies to
bungee jumping or
selling
kidneys.
6.
Legislating Against
Workplace Harassment
We are now in a position to return to the
against sexual harassment in the workplace.
sexual harassment even
when
this is
firm's reputation for harassment
is
subject that
We have
seen that there
so widely
known
that a
so being fully cognizant that she will be sexually harassed.
this
started out with: legislating
is
a case for banning
based on voluntary contract or happens when a
based on standard economics, founded
However,
I
in
worker joining the firm does
And
this
case for a ban can be
Paretianism and respect for individual freedom.
'economic perspective' on legislation comes with
its
own
suggestion for
the kind of law that ought to be used to control harassment in the workplace.
the subject matter of this section
Some of the
earliest
workplace took place
in the
—
to elaborate
on
and most progressive
United States; and
And
that is
this suggestion.
legislation
on sexual harassment
so, not surprisingly, the
has influenced legislation worldwide. The key to the
US
in the
American model
legislation is to
view sexual
harassment as a form of discrimination, to wit, gender discrimination. Title VII of the
Civil Rights Act of 1964 prohibits gender-based discrimination in the workplace.
^^
This
is
exactly the question raised (and
its
accompanying moral implications discussed)
in
Over
an absorbing
31
the years, influenced
courts have
in the
come
workplace.
to
US
by the pioneering work of Catherine Mackinnon (1979), the
view
this as the appropriate legislation to
A similar view is reinforced by the United
Opportunity Commission
(EEOC)
punish sexual harassment
States Equal
Employment
Guidelines, published in 1980 (see Lipper, 1992;
EEOC
Schultz, 1998; for discussions).
The main
emphasize
environment was a culpable form of sexual harassment.
While the
that a hostile sexual
EEOC
Guidelines
is
contribution of the
not binding on the federal courts,
shaping American case law. The celebrated Bundy
v.
it
has been influential in
Jackson case, 1981, for the
time recognized 'hostile environment' as sexual harassment and the
were
influential in this. In
Guidelines was to
EEOC Guidelines
Bundy, a female employee of the Department of Corrections,
Washington, D.C., was repeatedly invited by her supervisor and asked
to describe her
sexual experience. Another supervisor had invited her to a motel and to go with
the
Bahamas.
When
first
she complained about this to a senior manager, he took
it
him
to
lightly
saying that the feelings of the two supervisors were understandable. The court upheld
Bundy's charge
innuendo and implicit threats created an intimidating and
that the
hostile
atmosphere, and were unlawful, even though she had not suffered any tangible losses,
such as the withholding of salary increments or promotion. The court recognized that to
rule otherwise
would be
to give harassers the opportunity to harass
up
to the point just
short of firing or withholding benefits from the harassee.
The landmark case concerning sexual harassment was, however,
Savings Bank
v.
oi Meritor
Vinson in 1986. In this case, Vinson, a trainee-teller, was propositioned
repeatedly by Taylor, Vice President of Meritor Savings
After refiising
that
initially,
Bank and Branch Manager.
she agreed out of fear of losing her job, and was, over a period of
four years, subjected to repeated sexual relations, forcible rape and continuous minor
harassment. The court ruled in her favor, for the
first
time citing Title VII of the Civil
Rights Act and recognizing Taylor's behavior as a form of sex discrimination. In this
case and in an umpteen
essay
in the
New
number of cases
since then Title VII has
York Times Magazine: see Finkel (2001).
worked
well.
32
Other cmintrics have followed
siiif
.
Britain's
Sex Discrimination Act of 1975
closely parallels U.S.'s Title Vli. This act recognizes sex discrimination to
and recognizes
he
treats or
that discrimination
would
treat a
man.
occurs
In India,
if a
person treats a
woman
Ik-
unlawtul
less favorably than
thanks to feminist activism, sexual harassment
for the first time being recognized as unlawful
women
and some
is
arc bringing charges that
they would not have dared to even a few years ago (Taneja, 2001). Needless to add, there
is still
and a
a lot of silent suffering
lot
of ground to be broken. In India most of the
anti-
discrimination provisions occur in the nation's Constitution, which, according to
Nussbaum
(2001), "is a
more woman-friendly document
she rightly points out, "India
legal guarantees
have
little
has a serious problem in
no uniform
civil
is
a relatively anarchic nation
that,
civil
in
India
has
it
law being characterized by special provisions for
made
it
very hard to use civil law to punish sexual
is
to
use the criminal law, even
when
not be the most appropriate instrument. Interestingly, however, in India, thanks
to the progressive Constitution,
Britain, sexual harassment
I
where many admirable
while the nation has a uniform code of criminal law,
law code, the
harassment. The overwhelming tendency therefore
may
[...],
of the U.S.". But as
chance of being even minimally enforced". The law
different religious groups. This has
that
that that
is
and precedence
it
such as the U.S and
increasingly recognized as a form of sex discrimination.
would, however, like to argue that
discrimination, though
in other nations
this tying
up of sexual harassment with sex
has played an important role historically,
is
now becoming
hindrance. While there should be strong laws to prevent discrimination and strong laws to
prevent harassment,
if
it
became
the case that to establish harassment
invariably take the route of demonstrating that
would be unfortunate. And
In the U.S. there
is
there
is
it
was
evidence that this
a
we would have
form of discrimination, then
to
this
beginning to happen.
is
increasing evidence that there
is
a significant
amount of same-
sex harassment and in such cases the existing sexual harassment law does not provide
adequate protection to sufferers and,
collectively interpret the
says.
^''
A
The ambiguity
when
law according
in the
to
it
its
does,
law was so confusing
comprehensive account of sexual harassment law
it is
only because judges and lawyers
likely intent rather than
that in
what
it
actually
1998 the U.S. Supreme Court
in different nations
occurs in Husbands (1992).
33
ruled explicitly that Title VII should be viewed as including same-sex harassment and so
should provide protection to those subjected to same-sex harassment. This
is
because
"sexual harassment" should be considered "discrimination because of sex" and thus
it
did
not have to occur across the gender boundary.
This
still
leaves open the problem of the boss
who harasses both men and women
with equal vigor and thus does not harass anybody because of his or her sex^^. But even
apart from this there
time ago in the
is
another problem that was exemplified by the case reported
New York Times
openly-gay hotel employee,
who
(Abelson, 2001), concerning Mr. Medina Rene, an
lost his case against
MGM Grand Hotel in Las Vegas in
an appeal before the U.S. Court of Appeals of the Ninth Circuit. Mr. Rene, 48,
worked
there as a butler for
some
who had
two years was continuously harassed by co-workers, being
pinched and being subjected to inappropriate physical contact and horseplay. Mr. Rene's
complaint to the hotel seniors resulted in no action and so he took the matter to the court.
But the court ruled
orientation and so
According
that
Mr. Rene's harassment was not based on
was not covered under
to the
same
men's claims now account
for
his sex but
on his sexual
Title VII.'^^
New York Times
article,
reporting from
EEOC
13.5% of all sexual harassment charges. And
data,
clearly, the
coupling of sexual harassment with sex discrimination does not do a good job in
protecting people in such cases.
It is
^^
interesting to try to understand
granted these days
)
occurred in the
first
noted, are usually divided into two kinds
why the
coupling (which
is
taken so
latter,
for
place. Sexual harassment cases, as already
—those based on quid pro quo (when
are threatened to be withheld if sexual favors are not granted) and those based
environment. The
much
benefits
on
hostile
being more intangible, had historically been ignored and often
^^
See Paul (1990) and Epstein (1985) for discussion of this problem. For a sensitive account of cases that
do not fit comfortably into the categories for which Title VII was designed or at least originally deemed but
are nevertheless important, see
To be
Abrams
(1994).
considered a case covered under Title Vll the plaintiff
requirement. That
is,
the plaintiff has to
show
that
is
required to
fulfill
the "but for"
he or she would not have been treated the way he or she
was but for the plaintiffs sex.
As Paul (1990, p. 335) argues, the existing law "injects an ideological bias against men".
Here is Farley's (2001, p. 30) definition: "Sexual harassment is best described as unsolicited
nonreciprocal male behavior that asserts a woman's sex role over her function as worker". Clearly she takes
the gender roles for granted and this is by no means an uncommon practice.
34
left
As
sutTcrors with hardly any legal recourse.
above, there were often no clear injuries
in the
who
inflicted
could be punished^". That
is
v.
Jackson case, discussed
hold harassers culpable under
to
sexual harassment as a form of sex discrimination
ensuring that those
Bundy
became
the
To view
lort'^'.
avenue of choice
for
harassment by simply creating an hostile environment
when
the recognition that sexual harassment
is
a kind of sex
discrimination and therefore can take subtle, non-demonstrative forms, began to play an
important role. In England, for instance, before the Sexual Discrimination Act, came into
force, a victim of harassment
would have
to first resign
that cost as tangible evidence) bring a charge that could
It is
true that these deficiencies
needed
to
interpreting sexual harassment as discrimination
correcting this. But once hostile environment
it
is
should not be considered wrong per 5e, that
sexual harassment,
it
seems what
is
essential
is
be upheld
in court.
be corrected and the advantage of
was
that
provided an avenue for
it
recognized as a wrong,
is,
discrimination. Especially for countries that are
from her work, and then (using
even when
now
it is
is
not clear
of legislating against
law recognize both quid pro quo
harassment and hostile environment harassment as punishable. Further, there
to require this to
be punishable only when
its
why
not a case of sex
in the process
that the
it
is
no reason
occurrence can be shown to be a form of
sex discrimination. The coupling with sex discrimination was the scaffolding which
enabled us to construe better what constituted sexual harassment, but
function has been achieved there
scaffolding.
is
no reason
why we
now
that that
should persist in having the
The new law on sexual harassment should consider punishable not only
harassment that occurs from discrimination, but also non-discriminatory harassment.
What
the
legislate against
from being
pain
is
is
economic approach
workplace sexual harassment
inflicted
harassment suggests
is
to
on employees. The motivation
not important.
we may want to
this is
is
that the reason to
prevent the pain of sexual harassment
that leads the harasser to inflict this
We may want to have separate
motivated by discrimination, since
because
to sexual
legal provision for harassment that
such a pervasive phenomenon, and also
punish both the harassment and the discrimination. But
it
would
As Lipper (1992, p. 301) pointed out, in the past, "while a woman who had been physically assaulted, i.e.
grabbed, touched or kissed, might have prevailed under tort theories, one who had been the object of sexual
^'
jokes would be unlikely to be compensated for her resulting anguish".
35
be wrong and inadequate to confine the scope of bringing harassment charges only to
cases where the harassment
One may
is
prompted by discrimination.
'economic approach' by asking
try to critique the
moral status as say a moviegoer's pleasure
SWF as ingredients on the positive
depend on the nature of the SWF.
SWF
comparisons,
what happens
it
watching a new
The answer seems
side?
If
in
to
be
its
reason to scale up or
down
to
that
is
being suggested
Should both enter the
film.
to
me,
interestingly, to
then the answer
when we make
a person's utility
if the torturer's
he could.and did compensate the
be tortured rather than not, then
it
is
is
no.
A
interpersonal
depending on
mainspring. But that does not seem to be significant
considering Pareto improvements. In such a case,
was so much
SWF,
a utilitarian
is
entails interpersonal comparisons^', and
we may have
it
joy from torturing should be considered to have the same
that, for instance, a torturer's
utilitarian
if
when we
are
pleasure from torturing
tortured, so that the tortured preferred
not clear what moral basis one can have in
objecting to this. Watching acrobats perform dangerous feats, having foot-massage, and
at
times even watching a good comedy, can have similar features.
the activity
per
worthwhile.
large
se, but the total
Of course,
with
income differences
given that that
is
so, the
package of the
many such
that
activities,
one person
exchange
activity plus the
is
it
is
The performer
compensation
regrettable that there
in itself should not
there are not the inequities of this society, then this
this paper.
It is
that
would be
One may
at this stage
may be
such
be deemed wrong. If the banning of
new outcome, where
becomes another matter, and
entirely in keeping with
a special case of the large
is
able to compensate another for her pain, but
such exchanges can reasonably be expected to bring about a whole
may be justified. And
dislikes
what
is
the
ban
being advocated in
numbers argument.
consider the case
made
in
Superson's (1993) influential
paper for strengthening the 'sex discrimination' interpretation of sexual harassment. She
expresses dissatisfaction with the existing law, but a different kind of dissatisfaction from
the one expressed in this paper.
demeaning for
''
all
Her claim
is
that every instance
women: "The main problem
in
my view
is
of sexual harassment
is
that the law, reflecting the
See Juliano (1992) for a discussion of the history of the 'hostile environment' claim.
It entails, in fact, interpersonal comparisons of a very specific kind (see Sen, 1970).
36
view held by the general public,
attack
on the group of all women, not
One problem
vv'oman
is
to a black
all
my
is
all
that
is
all
immediate victim"
it
not clear
is
women, and
all
black
men
.
.
?
.
view some fonns of SH are related
is:
it
an
an attack on a single
And
be construed as a hurt to
it
is
if
is
to think
all
men,
of these as
predicated on her opinion (p.51):
and they
to violence,
whether or not they express hatred." This sentence
SH
what
moral beings?
all
My response
moral beings. Superson's case
definition of or a theory concerning
lor
(p. 49).
why
not on
|
based on some notion of identity, what happens
sexually attacked? Should
black gay men,
all
shared affront to
"In
just the
really intentionally
man who
gay
gay men,
is
see Sli [sexual harassment
with this argument
be viewed as an attack on
to
segmentation
this
tails to
may
SH. In either case,
all
express inferiority
be interpreted either as a
it
has weaknesses. If we define
many
as harassment that stems from a feeling of contempt towards the harassee, then
cases of harassment will escape notice of the law, just because they do not spring from
such a feeling.
If,
on the other hand,
we
the psychological basis of harassment, then
known
to harass
harassee.
The
it
is
not too persuasive. People have been
and stalk out of feelings of love and even 'worship' towards the
effect
on the harassee
is
however
the same, no matter
harassment, and so such behavior should be considered
What
affect others
is
interesting about her
who
this
further,
argument
are not directly in the line of
whereby one person's victimization
how
remark as a theory regarding
interpret Superson's
is
illegal.
the sense in
fire.
She
what prompts the
which harassment may
talks of social
affects others. In this paper
mechanisms
we have
already seen
can also happen through the workings of the market. In fact what
because in our model
this
sense that the harassment contract
can happen even when there
was
fi-eely
is
we saw
no victimization
goes
in the
accepted by both sides. This 'economic'
approach takes us to a new critique of existing sexual harassment laws.
It
helps us
understand that the existing interpretation of sexual harassment, which includes 'hostile
environment' and other subtle forms of 'atmospheric' oppression,
may not be
going far
enough. The existing legal provisions are not cognizant of the suffering of those
not harassed because they
may have
taken otherwise inferior jobs where there
assurance of no harassment. In a world where harassment
is
allowed,
is
who
the
many people
naturally take the precaution of such 'safe jobs', often at a perilous price.
are
will
They cannot
37
seek compensation under existing sexual harassment laws, because they are not harassed
physically or even environmentally. But they nevertheless pay a price
Hence, surprisingly, the economic approach takes
radical conclusion, a
more widespread
sexual harassment. Moreover,
it
us, in
.
some ways,
interpretation of what constitutes the
more
to a
harm of
gives us a uniform instrument for analyzing other kinds
of labor market problems, such as occupational
safety, child labor,
and labor
rights
and
standards in general, allowing us to check the validity of the case for intervention in each
of these cases
Let
law
me
in
terms of a
common
analytical yardstick.
end by commenting on a new problem
in this field.
Even
hampering the progress of
as efforts continue to strengthen the laws to protect
sexual harassment, there
legal provisions. This
that is
one problem
that is threatening to blunt
the use of the First
is
harassment cases. This
is
is
workers from
some of the
Amendment by defendants
a natural concomitant of considering hostile
existing
in sexual
environment as a
reason for bringing harassment charges. At times the hostile environment includes speech
acts,
such as sexually abusive remarks, or the display of sexually explicit material which
may
leave one particular group feeling uncomfortable in the workplace. In such cases,
initial effort
by defendants
to seek protection
dismissed by the courts. But
entertain
this is
behind the
First
Amendment were
changing rapidly with the courts beginning
more and more such defence and
this runs the risk
of weakening, in
to
effect, the
protection of individuals from hostile-environment harassment in the workplace
(Schauer, 2001). In 1991, in the Robinson
complaints of Robinson,
who worked
v.
Jacksonville Shipyards, Inc. case, one of the
as a welder,
was
from Playboy magazine, throughout the workplace. In
the display of nude pictures,
this
some
case the American Civil
Liberties Union, after a contentious debate, took a position in favor of the defendant on
^^
A matter,
of the law but needs reiteration and also some activism,
and prisons. The situation is dismal in virtually all nations poor and
rich. A person's act of entering into a prison is not a voluntary act (by no reasonable and intuitive notion of
voluntariness, that is); and once a person is in prison, the scope for self-protection is very limited. I have
which needs no
concerns sexual harassment
radical revision
—
in jails
thus far not discussed the issue of 'vicarious liability'— the employer's liability for the safety of the worker.
management ought
have an even greater responsibility for the safety of the
is that much limited. We need to make it much easier
for prisoners to bring charges against the /?n5on authority for sexual and other unfair harassment they may
suffer not only from prison guards but also fellow inmates. If the authorities are made to pay large liability
In prisons, the prison
to
prisoner, since the prisoner's scope for self-defense
38
grounds of tlie
First
Amendment, and
tliis
was one of the
some
took such a defense seriously. This has inspired
environment clause as
The way
hurt as
much
to
a direct attack
counter this hazard
as actions
and then
the workplace. This will involve
precedence for
this. --The First
been limited by court rulings;
where
some may
the line
is
drawn
is, first,
Amendment's
that
is,
is difficult
meant
harasser's motive, then
the intrusion of First
Amendment
7.
A question that that
is
somewhat
time and again,
of legally recognized
have
may even
shift
with the
with the drawing of a line and refuse
arisen,
is
and
of sexual harassment, irrespective of the
A Comment on
not trained in economics than to economists,
is
Playboy nude. So where the
arbitrary
to reconcile
to
is
of a general principle, since
to specify in terms
defense beyond that
bound
in
trouble with this kind of delimiting exercise
to prevent the hurt
we may have
'speech'; but there
literal interpretation has,
find a Modigliani painting as offensive as a
is
view the hostile
on what can be said or displayed
free speech already has plenty
The
the court
words and pictures can
to recognize that
some curtailment of free
delineation occurs will invariably be
times. But if the law
legal thinkers to
when
Amendment^\
First
to delineate limits
restrictions (Fish 1994; Basu, 2000).
that
on the
early occasions
line.
Coercion
more
readily in the
minds of those
whether when a worker signs on the
dotted line of an employment contract in which the employer retains the right to sexually
harass the worker, he/she does so 'voluntarily'. In section 2
where employers
are allowed to harass
the time of employment.
contracts
would come
We
saw
workers as long as
that in such an
economy,
we
considered the case
this is
made
typically,
into existence— those that involve sexual
clear to
them
at
two kinds of labor
harassment and those that
pay a lower wage but guarantee that there will be no harassment. Workers
who need
compensations to those who suffer sexual harassment in prisons, then such acts will decrease. This is a
problem of great urgency since the rights of the prisoners are so egregiously violated in most societies.
" Schauer (2001, p. points out that one reason Robinson became such a pivotal case is because it
6)
involved Playboy and "if there is anything that prompts a reflexive reaction that the First Amendment is
involved, it is Playboy. It is hyperbole to suggest that the First Amendment would be raised as a defense
but not much."
[...] a rolled up copy of Playboy was used to commit battery
—
if
39
money
badly, for instance, those
who
are poor and are single mothers,
may
up the
take
former kind of jobs. That was described as a voluntary contract on the part of two
consenting adults
is
—
the
employer and the employee. The question
whether that description, namely, the 'voluntariness' part of
I
have argued elsewhere (Basu, 2000) that what
makes
contentious than mainstream economics
it
is
it,
that
is
now being
raised
is right.
voluntary choice
is
more
out to be. In particular, there are
choices which, on the face of it, look voluntary but are really coercive. The main route
through which
happens
this
is
when one
reservation payoff; and the analysis
is
reservation returns. If a landlord can
agent has
some
control over the other's
predicated on society's view of a person's
somehow make
a
rightfiil
worker be worse off for not
accepting his job offer than he otherwise would have been, then this could be a form of
coercion. In India,
when government used
to
run food-for-work programs, some
landlords had lobbied to stop these programs because they raised the worker's reservation
utility
and so enabled them
sufficiently high. Steinfeld
to turn
down
wages were
and Engerman (1998) have argued persuasively^'*
landlords did lobby and use political
taxes, to
the landlord's offer unless the
economy methods,
like the imposition
how
of arbitrary
keep the workers' alternative incomes low, so as to make them more amenable
to accepting the landlords' offer.
circumstances
may
I
would argue
that an offer accepted
under such
reasonably be described as coercive and not voluntary.
In the case of
my
sexual-harassment examples too, harassment contracts get
accepted by workers because the alternatives are so poor. However, there
is
no obvious
reason to think that the alternatives are made so poor through anybody's or any group's
conscious lobbying or activity. Hence, while
adversely, there seems to be
little
it is
true that such contracts affect
reason to call these contracts 'coercive'.
In any case, in the present context, this debate
Whether or not
there
and which voluntary,
is
is
of no more than semantic value.
agreement about which contracts are
this
workers
debate has
little
to
be described as coercive
operational significance if the reader
is
persuaded that the kinds of labor market contracts that the present paper argues should be
banned are indeed the kinds
that should
be banned.
Quiggin and Chambers (2000) have formally modeled arguments of this kind.
40
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