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?
I think many are confused with with this concept, because it is not "branded" clearly – perhaps by design.
Wealth (money) is a form of energy, and as such its movement is the subject to the third law of thermodynamics. So those who advocate "re-distribution of wealth" are mostly interested in it's entropy, since for many poor people, who's life is "brightened" there are a few quite wealthy people, who gain a lot more wealth and control from the process of re-distribution.
I'm surprised you didn't link to Harrison Bergeron.
Actually, beauty is surprisingly fungible. Most non-disfigured people can be "done up" to be quite attractive.
Johnny,
I meant to link to Harrison Bergeron, but I think the kids distracted me. Great example of why equality of outcome is a bad idea.
Anyone who reads that story is instinctively repulsed by the society described, yet the redistributionist approach is essentially identical, just restricted to wealth.
Foo,
Yes, makeup and surgery can work wonders. So why don't we provide an appearance safety net? Something to ask the redistributionists….
Some kinds of wealth rightly belong to all of us, and ought to be redistributed/socialized. Other kinds rightly belong to the individual or the corporation, and ought not to be touched at all by taxation.
But we've got it wrong about which is which, to my mind.
What ought to be privatized is that which the individual or the corporation creates. To my mind, that means not taxing wages or sales or buildings.
What ought to be socialized is that which the community creates, and that which nature provides. The two biggest categories are land value and natural resources.
Ought we to redistribute wealth that is from land value and natural resources? Absolutely!
Ought we to redistribute wealth which individuals or corporations have created after paying the community for land value and finite/scarce natural resources? Not!
You might take a look at Henry George's book "Progress and Poverty" for a very good discussion of the implications of getting this wrong, and of getting this right. See http://www.progressandpoverty.org/
You seem to be attacking a strawman. Progressives want a safety net for the poor, more or less as you propose. Is there anybody out there seriously proposing anything more than a miserly safety net?
It seems the only people who use the term "wealth redistribution" are those who oppose progressive taxation.
Could you provide some links to the "redistributionists" you refer to? Works of fiction and teenagers' blogs don't count.
Good post Chris
I believe the urge to distribute wealth is a in instinct.People Like to show they have wealth are the is noting better than to be seen giving money in public to the poor.This also brings Successful Public relations.They mostly Give to the poor because all they think about is money and if you have money everything is fine.People tend to avoid Boring or clumsy people.As for Beauty well,I know that if I ask My Health Service for Dentures they will refuse to pay for incisors They will Not pay and Say they are only for cosmetic purposes.
no. no. no.
The urge to redistribute wealth comes from most stupid peoples belief that if you got it, you stole it from someone to get it. These losers believe that it was 'luck' or theft or whatever else they can think of that completely negates the long hours, hard work, and expense most successful people have to go through in order to get anything at all.
When it's as simple for idiots (the vast majority) to believe you got your gains 'illegally', then it's easy for them to justify taking it from you and giving it to themselves.
(ask doctors and lawyers who have worked 2 jobs going to school full time and accruing $1-400,000 in school loans just to do what they do and make what they make if they worked for it or stole it… and then talk to anyone on the street and talk about how much that lawyer or doctor earns without talking about the years of school, 2 jobs, and huge debt and my point will be proven)
It's as simple as that.
Poor people are stupid.
(I'm stupid poor myself, but I'm not trying to take my money from anyone else – I'm trying to make it on my own.)
I heard a game-show host describe his job as the best on the planet, in that you get to give away other people's money, make people happy, and get to be the "face" people remember when they think of the money they got.
Too many politicians fall into this trap.
Another element is outsourcing charity. Nearly all redistributionists self-identify with the government – as long as it's run by Their Guy – so supporting policies that "help people" means you're doing it by proxy. The fact that it's usually other people's money makes it even better.
In terms of redistribution, ponder this fact:
According to the IRS, in 2006, the top 10% of taxpayers paid over 70% of the taxes.
In fact, the poorest 50% of the population paid 3% of the taxes.
Is it any wonder that some oppose progressive taxation?
Progressive taxation IS wealth redistribution.
Good post, ecafracsd
The reason to redistribute wealth is to ensure that everyone gets at least the basic necessities of life: food, water, a reasonable place to live, and perhaps also medical care. If anything, these should be provided for everyone, period. This should be a "base" you can't get under. So at least this much "wealth" should be provided — to everyone.
@Greg Y:
Then you redistribute it in a way that ensures the wealthy _lose_ wealth and control. (though not all of it.)
"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)"
Well I would not at all call most world-runners "beautiful". Just look at a government political chamber. Ehh… So we don't gripe, partially because there is nothing there to gripe about.
Also, as you mention, beauty is not very changeable, wealth is. In addition, our culture is hell-bent on materialism. So I suppose some may want it for less than noble reasons, i.e. money for money's sake — they want the materialistic aspects of it: more toys, etc. As for more "noble" reasons, I think that a rich person has an obligation to aid the poor and needy with his wealth. Perhaps other people think this as well, and so when they see this aid not being given, well…