ABSTRACT
This chapter considers the claims of equality of welfare as an interpretation of treating people as equals, and considers the competing claims of equality of resources. It argues that an equal division of resources presupposes an economic market of some form, mainly as an analytical device but also, to a certain extent, as an actual political institution. The market character of the auction is not simply a convenient or ad hoc device for resolving technical problems that arise for equality of resources in very simple exercises like our desert island case. Insurance, so far as it is available, provides a link between brute and option luck, because the decision to buy or reject catastrophe insurance is a calculated gamble. The premium of someone who barely earns the average coverage amount would be less than the premium the insurance market would have fixed on a flat-rate basis, though the premium of someone who earns much more would be much greater.
