Ex Ante/Ex Post

Abstract

This paper was written for a conference on legal transitions. The central question in legal transitions is whether it is appropriate for the government to offset (through grandfathering, direct compensation or other mechanisms) the ex post changes in wealth occasioned by changes in legal rules. Put this way, the government's appropriate response to the risk of legal change is just an instance of the larger question whether (and when) the government ought to intervene to bail people out of the bad ex post consequences of their (ex ante) risky choices.

Over the past twenty years, a substantial literature has emerged in both philosophy and economics on this larger question. While economists have analyzed the case for ex post compensation primarily on welfarist grounds and philosophers primarily on egalitarian grounds, the two literatures have proceeded along strikingly similar lines, and converge on strikingly similar conclusions, albeit for their very different reasons: People should bear the consequences of their risky choices, subject to a limited exception when the risk in question is undesired but uninsurable. This convergence on an "ex ante" view of distributive justice results straightforwardly from the fact that the dominant strain in philosophy that has taken up this question over the past 20 years - so-called "luck egalitarianism" - is committed to the same strong ex ante perspective (for its very different reasons) as the rational expectations model of individual decision-making that dominates welfarist policy analysis.

This article examines the convergence on "ex ante" justice in economics and philosophy, and the normative and empirical assumptions on which it rests. It then considers various challenges to the sanctity of ex ante choice. It concludes that many of these challenges deserve to be taken more seriously than they have been, and would argue in at least some cases for "ex post" justice - for bailing people out of the bad consequences of their risky choices - on fairness as well as welfarist grounds. It concludes, however, that most legal transitions do not themselves present a compelling case for ex post justice on fairness or welfarist grounds.