In Defense of Redistribution

Trent is standing astride the corpse of statist socialism, metaphorically beating his chest, and a lot of our commenters seem to agree with him.

I think his joy is premature (and somewhat misplaced); so what I want to do is defend redistributive liberalism here. There are two flavors of redistribution. One redistributes income and wealth; usually through transfer payments, social programs, or other kinds of infrastructure paid for disproportionately by the well-off and used by all. The other is defensive; it means to limit the concentrations of wealth and power.

It is about keeping those who have from using what they have to take from those who don’t.

I believe these are important for two reasons.

One is a matter of morality, aesthetics, essentially of taste, and as we all know, de gustibus, non disputandum est (there’s no accounting for taste). I prefer to live in a world where the conditions of the poor are meliorated. I think it’s just and good. The response to that is ‘well, spend your own money!’, and right now I’m not going to dispute that (although I believe it’s quite disputable).

The other is very practical and cold-hearted, and is something I hope to convince you to take seriously; to have the kind of political organization we have…where we grant legitimacy to an abstract body of laws and procedure…there needs to be a rough equality of power.

There will never be a true equality of power; every effort to make it so has collapsed into madness (The Terror, Pol Pot). But one unique feature of the American system – and one of the keys to it’s greatness is the ability of the small to stand up to the strong. This is important for many reasons; one of the most important is that it ties the small and powerless to the system with ties of legitimacy.
My correspondence with Bill, from Rational Expectations, helped get this started.

Here are a few quotes from his emails to me:

First, what’s the problem with wealth concentration? Bill Gates didn’t get rich by making me or any other of his customers worse off.

I think there’s a huge difference between an agricultural society in which a handful of families own all the land and everyone else is a peasant on the one hand and a society in which there’s significant mobility *within* the income distribution. The key is whether people have access to education and credit markets and are free to enter into any business or occupation of their choosing.

And I started realizing that he feels the way a lot of the people who read and comment on this blog (and not a few of those who write for it) do.

I feel differently.

As noted above, my feelings aren’t based entirely – or even largely – on some deep moral values. They are based on a look at the founding principles of this country, and on what people have discussed and believe that makes a polity work.

Jefferson put it well:

“There is a natural aristocracy among men. The grounds of this are virtue and talents… There is also an artificial aristocracy founded on wealth and birth, without either virtue or talents; for with these it would belong to the first class… The artificial aristocracy is a mischievous ingredient in government, and provision should be made to prevent its ascendency.” –Thomas Jefferson to John Adams

“With the laborers of England generally, does not the moral coercion of want subject their will as despotically to that of their employer, as the physical constraint does the soldier, the seaman, or the slave?” –Thomas Jefferson to Thomas Cooper

“I do not believe with the Rochefoucaults and the Montaignes that fourteen out of fifteen men are rogues. I believe a great abatement from that proportion may be made in favor of general honesty. But I have always found that rogues would be uppermost, and I do not know that the proportion is too strong for the higher orders and for those who, rising above the swinish multitude, always contrive to nestle themselves into the places of power and profit. These rogues set out with stealing the people’s good opinion, and then steal from them the right of withdrawing it, by contriving laws and associations against the power of the people themselves.” –Thomas Jefferson to Mann Page

And much of the Federalist Papers is about the fear that an aristocracy of wealth hand power would rise up and destroy the fragile republic.

(and that the mobs would vote themselves wealth and power, to be sure)

There is a critical level of diffusion of power that has made the American model work. Not too diffuse, for there we get the demos, and ultimately the mob; and not too concentrated, for there we begin to stratify as those with privilege erect barriers to make sure that they can keep it.

My biggest concern is that we are near a tipping point where that delicate balance will be at risk. I, and others like me, want to shove the pendulum back the other way.

Like some, Mitch Ratcliffe as an example, I’m looking for a way to pull power away from the corporate and financial elites without handing it to the political/administrative elites. I don’t want a choice between Dickens’ and Orwell’s Londons – between Oliver Twist and 1984.

I intend to make another one. If I can’t find it, I’ll help create it.

17 thoughts on “In Defense of Redistribution”

  1. Very good post. A point I think is important is that even people who are violently opposed to redistributing income in principle actually support it in practice. For example if the entire public education system was scrapped and replaced with school vouchers, something conservatives presumably would support, it would be clear that the function of such vouchers would be nothing more and nothing less than the coercive redistribution of income from one group of citizens to another group, in order to achieve societal goals decided by the government to be in the public interest.

    Let’s see if the teacher’s unions try that one out for their next anti-vouchers ad.

  2. And the current government school monopoly isn’t forcible redistribution? Vouchers would eliminate a concentration of power while keeping the existing redistribution in place. The societal goals currently being imposed are as much those of the NEA (part owners of the Democratic Party) as those of the government, but that doesn’t make vouchers any less a means of increasing freedom.

  3. And how to resolve the notion that, post welfare reform, the poor appear no worse off and actually seem to be getting richer? How to explain the studies showing pockets of middle class in the ghettos of the last few decades? How to explain why these pockets didn’t appear until now?

    Does redistribution actually support the rich and powerful by developing an “entitlement society”, which by its very nature keeps the status quo?

    Doesn’t any government system quickly become bureaucratic and wedded to the status quo?

    Doesn’t any government agency *manage* problems, instead of *solving* them? (If they actually solve the problem they lose their budget and raison d’etre.)

    The best way to ensure a turnover of power is to argue for free markets to remain in place, with little bureaucracy to ensure its stability. Walmart may be powerful now, but in a free market the only thing we can count on is continual productive change. This ensures that, unless it performs spectacularly, in 2 generations Walmart will be where Kmart is today, and in 4 generations it will be where Woolworth’s is today.

  4. Redistribution; yes, but limited. Old Welfare failed because it didn’t encourage enough behavior change in the able but lazy/ irresponsible.

    Better alternative: National service corps. Guaranteed job for all US citizen residents, 90% pay of an enlisted person, 6 month-minimum enlistment — with UCMJ (Uniform Code of Military Justice), or some other more restrictive code of behavior. Voluntary — but phase out all other gov’t support programs.

    Corporations ARE a problem, with too much political influence — but mostly because the politicians have too much power.
    A) add a minimum corp tax of 1% of Total Revenue (not profit). Corps “losing money” still pay 1%. Lot’s of tax dodges look less attractive.
    B) MORE direct democracy in FUNDING gov’t.
    Every IRS 1040 (long; mid) form should include a one page list of the largest 50 line items in the prior year’s budget, and the amount given.
    Every voter gets 100% to vote/allocate; eg 2% for all, or 4 x 25%, or any percentage to any line items. Total less than or equal to 100% is accepted. More than 100% is normalized to 100%.

    Then congress will have LESS money/ power to play around with, directly — PLUS the yearly tax vote %s can be increasingly reflected in other budgetary battles.

  5. The real potential problem is with “artificial” aristocracy; that is, an aristocracy which gains and maintains power in society without producing concomittant (sp) value for that society. Those aristocracies are, for the most part, overturned or modified over time through some combination of revolt, forced internal reform, or force external reform (the neighbors are fed up). The mistake many liberals make is to equate “artificial” aristocracy with the “meritocracy” that naturally arises in free societies with open markets and societal mobility. You make a useful distinction between offensive and defensive redistribution but I’m not sure that even defensive redistribution contributes much to the general welfare, except in very rare, and therefore atypical, instances. Anti-trust law seems like a pretty good example of defensive redistribution but it’s application rarely makes much sense and it is subject, like all things where the government is involved, to political manipulation.

    Another problem with redistribution is that it absolves individuals from any moral responsibility for the conditions in which other individuals live. “Aww, let the government do it. They bite off enough of my paycheck anyway.” Increased government involvement in ameliorating societal conditions deemed wrong or substandard serves to blunt the moral sensibilities of the individuals composing that society. That’s not to say that government should do absolutely nothing, as a libertarian might argue, but it must be very careful and any actions should be taken by the appropriate governmental unit to keep the process at the most local level (syntax) that is feasible.

  6. AL,

    You make some good points but I think that you really have not taken the primary conservative argument – that redistributionist policies can easily devolve into tyranny – head on. Now, there *are* some weakness in the argument but there is a grain of truth as well.

    There is an obvious allure to the idea that government power be used to guide income flows so they are more “fair” or so they otherwise meet social goals. But the allure rests on a certain degree of abstraction from the truth of markets and of the means by which wealth is produced. When an individual or team guides a company through the challenges necessary to create genuine wealth, there is almost always a great deal of hard work, risk, and discipline required. That is, it requires a certain degree of personal virtue – as it is typically understood in Western culture – to be able to *create* wealth (note that I do not argue that such virtue is required to defraud).

    The bureaucrat or legislator – who is unlikely to be familiar with the mechanics of wealth production – will scarcely acknowledge such virtues and will certainly find them too abstract to guide action. Indeed, from the lofty position of the legislator seeking the “social good,” any attempt to point out the work and discipline involved in creating wealth will appear selfish or even reactionary.

    Historically speaking, the vast majority of cultures occupying human history have demonstrated an outright hostility for those who would, by dint of their commercial efforts, place themselves above their fellows. Power has almost always been gained, held, and lost in battle and political intrigue – not in commerce and wealth creation. Throughout most of history, commercial enterprises have seldom grown larger than what a single family could manage (for more on Warrior vs. Commercial cultures, see Jane Jacobs’ brilliant “Systems of Survival”).

    Subcultures and racial groups that have historically been most adept at commercial success (the Jews in Europe, the Ibo in Nigeria, and Han Chinese throughout Southest Asia) have been subject to some of the most brutal repression in history (See Sowell’s Race and Culture).

    As Steven Pinker points out in his recent book “The Blank Slate,” the cognitive foundations for a capitalist understanding of economic activity seem to be largely missing from the human brain. It is only through the somewhat tortuous application of logic (rather than gut-level common sense) that we see the benefit of free commerce between independent, powerful organizations (small-scale barter, on the other hand, seems quite natural to us).

    It is only with the rise of Mercantilism and, later, Capitalism, that explicit efforts to encourage *private* wealth creation have flourished. This is a radical idea and one that by no means has gone unopposed. Within our own society this continuing opposition manifests itself in screaming headlines every time a business entity is found to have stuffed the channels to inflate its profits or an executive is found to have purchased gold-plated geegaws with company money. *Of course you can’t trust these people,* we reason implicitly, they are *businessmen.* They are out to scrape the money out of the pockets of the poor!

    Such zero-sum thinking is very human, very natural and dead wrong from a macro-social perspective. The problem for an explicitly redistributionist policy is that any government implementing such a policy – and the electorate that benefits from such policies – are almost guaranteed to fall prey to such biases. Perhaps the most flagrently tyrannical examples of this very human impulse were China’s “Great Leap Forward” and the Soviet Union’s collectivization of agriculture.

    To counteract these forces and protect their own interests, businesses put together powerful mechanisms for self-defense (lobbyists, Chambers of Commerce, political contributions, etc.) Of course, human nature will not be denied: many people find the very existance of these political lobbying groups as evidence of a horrendous problem. Are they not simply a means for the rich and powerful to “buy off” the government of the people?

    As a conservative, I would argue that a free, democratic society cannot afford to demonize the acquisition of private wealth. Indeed, business *must* argue its case before government because “the people” – understood as those who do not have the appetite for creating wealth on their own – would surely tear apart the collected private wealth of society in an orgy of envious retribution if there were not a counterbalance against them…just as they have repeatedly and predictably throughout the history of humankind.

    To return more directly to your point: we should indeed remain on guard against efforts to turn wealth directly into political power. However, it is a mistake to assume that an unequal distribution of private wealth is, per se, evidence of a social problem. In particular, I would point out that your quote of Jefferson’s to Mann Page should be taken at full value: the issue for Jefferson is not the acquisition of wealth per se but the use of the tools of state to maintain this position artificially. This is a negative cause – an insistence that we prevent the government from colluding with such attempts. It is a far cry for arguing the positive case that government must be in the business of standing astride the flow of commerce in our society and divvying up the results.

    The wealthy business interests among us do not oppose social spending per se and the vast majority do indeed see the virtue in programs such as Social Security and Medicaid. However, we also see what happens when such programs run amok (such as has happened in New York State). We explicitly do not believe that such programs are a panacea for the poor and have little tolerance for those who would take the fruits of our labor while simultaneously slapping us down for having the temerity to generate such wealth to begin with.

    Best regards,

    Wild Monk

  7. Jefferson’s description of the “artificial aristocracy founded on wealth and birth, without either virtue or talents” made me think instantly of the Kennedy clan, a collection of mediocrities who trade on nothing but the presumption that the accident of birth has qualified them for public office. You, undoubtedly, are more likely to think of GWB. Perhaps we can both agree on “Pinch” Sulzberger.

    The serious point is that an intrusive government–and that is inevitably what a redistributive state will be–offers as many if not more opportunities for the perpetuation of artificial aristocracy as does a market economy.

  8. Triticale: “And the current government school monopoly isn’t forcible redistribution?”

    It isn’t, at least not in the way AL means. If you mean “redistribution from poor people to teachers’ unions,” what you’re really talking about here is not redistribution per se but privilege in its classic political sense. The teachers as medieval guild, if you will.

    I’d say AL is broadly right about redistribution being connected to legitimacy, and there are precedents for societies (incl. Sparta) that have been destroyed by a creeping concentration of power and wealth that eventually do create something like an entrenched aristocracy and sap their vitality. America isn’t there yet, but AL isn’t crazy to be concerned either.

    That said, to create a serious alternative means dealing with fundamental aspects of the conservative critique of government as the mechanism, from “public choice” economics that sees the state and its agencies and revenue maximizers instead of neutral agents, to the issue of information/interest disparity (direct recipients of largesse more interested in keeping it regardless, than indirect contributors are of taking it away), etc. Some steps have been made via books like Gaebler and Osborne’s “Reinventing Government,” but liberal policy still has a ways to go before it can face its opponents from a firm foundation.

    Ironically, American conservatives and liberals mirror image each other domestically and abroad. Domestically, conservatives have effectively dissolved large chunks of the belief base upon which liberal policy rests. What they don’t yet have is a compelling alternative that’s fully fleshed out. The electorate is starting to see some attractive solutions from them, but the Right is still working that through. Until it’s clearer, there will be polarization and also a trust deficit on these issues.

    Liberals have done much of the same vis-a-vis foreign policy, dissolving large chunks of the belief base upon which conservative policies rest. They’ve barely begun the serious solution stage, however, and so both the polarization and the trust deficit approach stratospheric (20-40%) levels.

    Because of that, and because they believe themselves to be on more defensible theoretical ground, the Right’s reaction has been to work at rebuilding the belief base. They may yet succeed. Ironically, if this happened it would probably HELP the Democrats, as the focus of competition would then shift strongly to domestic differences. Can the Right build a strong, compelling social vision before it destroys the Left’s international vision and tilts the playing field back to domestic issues? Stay tuned.

    Trent’s probably right that the Democrats are toast in 2004, therefore, but much can happen between now and then and so more qualification and less chest-thumping would be wise. The broader issue of the Democrats’ long term future is more mixed, and depends on a number of variables. Wilderness status of the type the Republicans faced from the New Deal to the late 70s is indeed a very possible fate. It is not a certain one, however, and a liberal movement that faced its weaknesses squarely and got rid of the extremes could also ride some favourable demographic trends and become a solid majority again.

    AL intends to do his bit to make that happen.

  9. “It is about keeping those who have from using what they have to take from those who don’t.”

    I agree with that statement, but I think we would have different solutions.

    The way to prevent entrenchment is to have no barriers to entry. That means more laissez-faire, not less. I’d guess in Europe with all their regulations, that there is less social mobility than here. We do not want to allow the rich to use the apparatus of the state to maintain their position, and the best way to do that is to be reflexively free market!

  10. “It is about keeping those who have from using what they have to take from those who don’t.”

    I also agree with this statement, and even what is proposed by Mark, but I’d like to take it one step further. I will argue that one of the things that has helped prevent an entrenched aristocracy has been the much maligned estate tax, which presents the wealthy with a simple choice: Give it to the Govenment, or give it away.

    Here is a radical proposal: Increase the estate tax (with an inflation indexed amount allowed to be tranferred to your children) to the point where you can do away entirely with income tax.

    I think that most (small l) libertairians would accept the compromise of paying all of your taxes at the end of your life, rather than taking a small chunk throughout.

    And that would provide a huge growth boon to the economy. Now, there’s a position bound to generate some fireworks.

  11. JK, so the first such step to the left facing its weaknesses squarely and getting rid of the extremes is to… defend redistribution?

    Not by utilitarian arguments, but by touchy-feely hand-wringing over some rogue aristocracy? Class warfare II: in the post-scarcity era, the rich don’t actively kill us or enslave us any longer, but they sure do make us FEEL bad, what with their driving Hummers and getting needless plastic surgery. Plus they get to boss us around at work. It’s not FAIR! Let’s USE those FEELINGS to support our politics!

    Smells like the same-old same-old to me, winds of stagnation.

    If you want to face the weakness square in the face, ask yourself why the biggest redistribution plan ever conceived in this country led to two decades of lower economic growth — and the return to that growth in the last decade has been the best thing to happen to the poor since… I dunno, since those wallets with chains attached were invented.

  12. Redistribution is a core facet of the liberal-left argument, Undertoad. In fairness, there’s an historical/civilizational case for it that goes well beyond feelings. Facing the weaknesses pointed out by the neoconservative critiques of liberalism is what must be done in order to create a more defensible postition re: redistribution, and that will probably mean a new set of systems around it and limits upon it.

    A.L. is starting with a defense of the core as something that still has some value. Because it still has some value, and because the “legitimacy” he talks about has political consequences, he’s saying (I think) that predictions of the Dems’ demise may be premature. I’m inclined to agree. Still, as I pointed out above, true success must go further or they’ll remain vulnerable on social policy too. Can’t expect A.L. to lay out the whole alternative all by himself in one blog post, though.

  13. Joe Katzman writes:

    In fairness, there’s an historical/civilizational case for it that goes well beyond feelings. Facing the weaknesses pointed out by the neoconservative critiques of liberalism is what must be done in order to create a more defensible postition re: redistribution, and that will probably mean a new set of systems around it and limits upon it.

    All but the most radical libertarian support some redistribution of wealth. Those of us on the Right just want it to be done in a way that minimizes some weighted sum of the amount of statism necessary and the perverse incentives created by redistribution.

    For instance, most of us on the Right support public FUNDING of education, but certainly not the public PROVISION of education the way it is today. It benefits teachers’ unions and the educational bureaucracy. What was meant as a policy to level the playing field has morphed into into a government program that seeks only to redistribute wealth to teachers’ unions.

  14. Any government spending is, in effect, a redistribution of wealth from the general taxpaying citizenry to some combination of a subset of said citizenry and public or private organizations. Criticizing the provision of education funds as primarily benefitting teachers’ unions may be valid, but not necessarily more so than criticizing no-bid contracts awarded to private companies that are run by close associates of the current Administration. As Mark points out, the issue is more the provision of funds than the funding itself, but if you’re going to look at how government expenditures redistribute wealth, it’s only fair to look at all the expenditures.

  15. clue –

    I’ll extend that to note that you also have to look at tax preferences, regulatory policy, etc., etc., all of which have substantial redistributive effects (not necessarly progressive…)


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