Robin Hanson at Overcoming Bias poses this provocative question in his latest post:
Many people say they favor redistribution from the rich to the poor because they feel sorry for the poor. The poor suffer from having too little money, and it doesn’t take much money to help them a lot. In contrast, the rich won’t miss that money much.
Such advocates also usually aren’t very interested in giving money to people who suffer because they are short, ugly, boring, clumsy, unpopular, etc. Yet a bit of money might go a long way to brighten these lives as well. Explanations offered for why folks sympathize with the poor but not the short etc. have long left me puzzled.
Hanson goes on to posit that we favor wealth distribution because of the Willie Sutton principle–we invent excuses to take stuff from rich people because that’s where the money is.
I won’t get into the morality of wealth distribution directly, but I am curious about why wealth is treated different from nearly other virtue.
For example, take beauty. We don’t tax beauty or call for disfiguring the comely. Nor do we provide free plastic surgery to the facially challenged.
Or how about healthcare? We don’t target equality of health; even those who favor a single-payer system are simply concerned with providing universal coverage.
It may be that wealth is treated differently because unlike most other characteristics, money is completely fungible (by definition and design). It is a relatively simple matter to rob Peter to pay Paul, whereas it’s more difficult to transplant Peter’s fine head of hair to Paul’s balding pate.
Yet I find this explanation wanting. In no other case do we find people muttering darkly about the fortunate. We don’t gripe that beautiful people run the world (though physical beauty is strongly correlated with success) or that the healthy are keeping all the vitality to themselves.
If I were a redistributionist (which I’m not), it seems to me that the goal should be similar to that for universal health care: To provide universal poverty insurance, not to establish an even distribution of wealth. I’ve dealt with this subject before as the miserly safety net.
One possible argument for redistribution is that the utility of wealth is non-linear; after a certain point (about $50K/year), money doesn’t buy happiness. But this can be handled via the safety net, and the happiness effects of money are dwarfed by the happiness of real achievement.
Another argument is that wealth causes jealousy and unhappiness as poor people compare their lot in life to that of rich people. But again, redistributing wealth treats the symptom, not the cause. Our focus should be on teaching people that money (beyond a certain point) does not buy happiness, and the energy spent on jealousy should be redirected to more meaningful and productive activities.
(On a side note, how ironic is it that the same folks who claim that money isn’t important or a motivator are so eager to turn around and hand it to the poor…if money is so bad for the rich, why is it good for anyone?)
What do you think? Why does the urge to redistribute wealth exist, and what should we do about it?