Ability to pay????

My initial hesitations while reading Posner's argument are quickly summed up by Hurley's annotation on page 71: "ability to pay???" I had a hard time following through with the rest of Posner's argument as I am skeptical about his assumption that ability to pay and willingness to pay are the same thing. This skepticism first came into play when Posner begins to outline the concept of value. He differentiates value from utility by saying, "the individual who would like very much to have some good but is unwilling or unable to pay anything for it-- perhaps because he is destitute-- does not value the good in the sense in which I am using the term 'value'" (61). He continues to casually gloss over the idea of ability to pay, as when discussing willingness to pay. He describes a justification for willingness to pay for a house: "I would not be willing to pay more than $75,000 for it, because that is all I could 'afford' to pay" (65).

This idea of ability to pay versus willingness to pay is critical to support his basic premises, and I'm not sure that he is convincing in the moral weight of equating the two, even in the wealth maximizing ethical system. For example, regarding the thief and necklace example, Posner states, "in actual-market terms the thief's unwillingness (based on inability) to pay for the necklace shows that the necklace is worth less to him than to the owner" (63). This may be true in actual market terms, but the based on inability factor of this deserves further analysis. The thief is most likely a man that does not have much wealth, and so his ability to pay may be capped, let's say at $500. Does this mean his willingness to pay is $500? Perhaps, according to Posner it is. But, hypothetically, if the thief was to somehow double his wealth, who is to say that he wouldn't be willing to pay $20,000 for this necklace then. These are very different values, and if we are to assume that they should be treated equally I believe it necessitates some further justification.

This is especially important because of Posner's discussion of rights. While illustrating the support for rights from wealth-maximization, Posner argues "the costs of the rectifying transaction can be avoided if the right is assigned at the outset to the user who values it the most" (71). If we are to adopt this system, the different between willingness to pay and ability to pay in terms of value becomes extremely important. If value is determined by equating willingness to pay with ability to pay, then if a wealthy person buys the rights to another individual's labor, how is that individual ever to obtain his rights? They can never labor to raise their ability to pay, even if their willingness to pay is more than the wealthy person's willingness to pay to keep controlling the labor. When willingness to pay means ability to pay, there is no clear way out of this dilemma, and Posner may have to provide a further argument for how his wealth-maximization system supports rights.