One of the most difficult social policy issues concerns the redistribution of wealth. On one side, we have liberals presenting an argument based on human decency. It is morally repugnant to contemplate a society in which some people starve to death while others enjoy vast wealth. Conservatives argue the injustice of taking wealth away from those who work hard to earn it and giving it to those who have not earned it. These two basic arguments are both sound, and neither can be dismissed out of hand -- yet they also flatly contradict each other. How to resolve the contradiction?
In practice, we compromise in an ass-backwards kind of way. Conservatives agree that nobody should lack the basics of human survival (food, clothing, and shelter). Liberals agree that we can't confiscate everybody's money. Sadly, conservatives are all too quick to dismiss liberals as "bleeding hearts" or "socialists", while liberals are too quick to dismiss conservatives as "selfish".
However, I'd like to offer a third argument, one that should be able to work for both sides. I will argue that providing some degree of income redistribution is beneficial to all.
My starting point is the Gini Index, an economic measure of the distribution of wealth in a society. A Gini Index of 1.00 describes a society of maximum inequality: one person owns all the wealth in the society, and everybody else owns nothing. A Gini Index of 0.00 denotes a society of maximum equality: everybody owns the same amount of wealth. In the real world, Gini Indexes run from a high of about 0.50 to a low of about 0.25.
There are some interesting trends that can be seen in the distribution of Gini Indexes from around the world. In general, the most stable countries with low crime rates tend to have low Gini Indexes, while the most violent countries tend to have high Gini Indexes. There are lots of exceptions to this generalization, to be sure, but the basic trend seems solid. Moreover, it makes sense: in societies where everybody is equal, there's less motivation for property crimes, while in societies with a lot of inequality, it's all too easy for the lower classes to resent the upper classes, and to express that resentment through crime.
However, I think that actual mechanism at work is a sense of belonging to or identification with one's community. There's no question that the upper classes will have lots of this "community spirit" -- the community they live in rewards them richly. But the lower classes have little reason to feel like a part of a community that, in their view, treats them like second-class citizens. Sure, they may have the same legal and civil rights that the upper classes do, but the fact that they end up getting the short end of the stick rankles and undermines their confidence in the fairness of their society.
Now, it's easy to dismiss these thoughts as incorrect. "Those ingrates just don't appreciate how good they have it! If they'd just get off their fat asses and work for a living, they could be rich, too!" That's the argument offered by conservatives. Although it's possible to offer a reasonable refutation of that argument, I won't bother to, because it's unnecessary. It doesn't matter whether they're justified in their resentment. It doesn't matter if they're logically incorrect. It's what they believe and that's what motivates their actions. Try reasoning with a mugger.
"Well then", the conservative replies, "that's what we have jails for. If the poor want to delude themselves, that's fine, but they are still responsible for their actions and if they commit property crimes, they'll go to jail."
This logic is impeccable. But the economics stinks.
It costs money to run a criminal justice system. Money for police, courts, lawyers, and jails. Money that has to be paid out of taxes. And it costs even more for security: locks and fences and cameras and night watchmen and buildings without windows. Thus, the wealthy will be paying money for security no matter what happens. So the real issue is one of trade-offs. At what point is it cheaper to pay off the lower classes than to wall them off?
You might object that this is a cowardly solution. Real men don't buy peace -- they enforce it! If you really want to increase your tax bill, then follow that path. But if you just want to get on with life and cut your losses, there is a point at which it's cheaper to buy them off with welfare than to scare them off with police.
Here we come to the best argument against this line of reasoning: we don't know where that point is. We don't know if an extra dollar spent on police will yield twice as much security as an extra dollar spent on welfare -- or vice versa. This is interesting theory, but without numbers, it's hard to find any utility in it.
However, there are some indicators. The Gini Index of the USA is well above average -- and the USA has higher rates of street crime and higher costs for its criminal justice system than most of the countries with low Gini Indexes. The overall cost of crime in the USA is estimated by various sources to be somewhere between $500 billion and $1.7 trillion per year. The total cost of all welfare programs in this country -- including Social Security and Medicare -- runs to maybe $500 billion per year. If we spend more money on the latter, will the former costs go down by an amount equal to or greater than our increment in expenditures on welfare? I don't know. In fact, nobody can know -- it's simply too complicated to calculate. However, we do know that there are societies on this planet that spend a lot more of their GDP on welfare and also spend a lot less of their GDP on crime. It's certainly feasible.
I haven't proven that this idea will work. I have only demonstrated that there is a feasible alternative way of thinking about crime and income redistribution. We don't need to choose between being the stern punishing father, or the forgiving nurturing mother. We can instead buy social peace -- if the price is right.
Friday, February 22, 2008
An odd approach to income redistribution
Subscribe to:
Post Comments (Atom)
9 comments:
Actually, your approach to this argument is pretty common among liberals these days.
Personally, I think that since my ability to create wealth is considerably magnified by the fact that I happen to be in a Western liberal democracy rather than a 3rd world dictatorship, arguing about how much of it I have earned is rather irrelevant. Hence, the argument you present - that we should choose the level of wealth distribution pragmatically to maximise both my long-term wealth and everyone else's - takes precedence.
The right-wing idea of all taxation being oppression is really a rather Marxist one anyway - suggesting that I have a moral right to precisely the quantity of money the market chooses to pay for my work (rather than say, the amount I have left after taxes) is little different from the Marxist argument that the worker is the true source of all production (i.e. wealth), with the government taking the place of the perfidious capitalist fat-cats.
You seem to be setting yourself up in many of these posts as neither liberal or conversative, but you seem pretty solidly in the left-wing to me - perhaps simply because as they say, "reality has a well-known liberal bias".
I can certainly sympathize with the basic argument that the government should stay out of people's lives -- and their pocketbooks -- as much as possible. However, "as much as possible" is a useless term because it doesn't really define anything. It's a desideratum, but not a guideline. We still end up arguing over whether any given government expenditure is "necessary and proper".
That said, I believe that the Federal government is taking too big a chunk of the GDP. There's an awful lot of redistribution going on, and what with money going in all directions, it's really difficult to figure out who the winners and who the losers are. Nevertheless, I have a sneaking suspicion that, after 90 years of lobbying, tweaking, adjusting, and fiddling around with the tax laws and the budget, the biggest gainers are those with strong lobbying power. There's no question in my mind that we have a very unfair transfer of wealth from young people to old people, largely because old people vote in droves. That's democracy, but it's not right. So in general I'd like to cut back hard on ALL redistribution except that which truly reduces the Gini Index. Right now we're at 0.43. I'd like to see that brought down to 0.40. Someday I'd even like to see it go down to 0.35, but that will be hard to accomplish.
Yes, I know that I am best characterized as liberal, but there are two additional factors here: in the interests of fairness, I want to bend over backwards to treat conservative ideas with respect. Second, there are a number of areas in which I am decidedly not liberal. I favor nuclear power, free trade, and lower taxes. I'd prefer to see environmental problems tackled with a more market-oriented approach rather than a regulatory approach.
On the other hand, I'm pretty liberal on environmental issues, and I am strongly opposed to all this nonsense about the USA being a Christian nation. I don't like the death penalty (but only because it's so damned expensive, it's cheaper to just leave in jail for the rest of their lives). I am strongly opposed to military adventures, but I could unblinkingly unleash nuclear warfare if the situation demanded it. (Although it's hard to imagine a situation that truly demanded the use of nuclear weapons.) I grudgingly admit the overall benefit of invading Afghanistan -- but only if we follow through and stabilize that country, which we're not doing. I vehemently oppose torture and the incarceration of people in Guantanamo. Give 'em a fair trial and convict or acquit.
Certainly, if it was up to me the US would probably spend much, much less on the military and corporate subsidies (especially farm subsidies.) I suspect getting out of the War on Drugs would be a huge savings (to mention the Right Thing To Do), especially once you account for the effects of locking up large numbers of (mostly black) people. And I suspect that the top-down, standarized-test-driven approach to education is crippling the education system (not just in the US), and will hugely impair its ability to take advantage of new, technologically supported means of teaching. (I'm less worried about the wealth transfer from young to old, because most young people will eventually become old people, and old people need money - for healthcare, pensions, etc.)
My point is, I don't see a large left-wing ideological movement of the stereotypical tax-and-spend protectionist type that you seem to be describing as 'liberal'. I think the left-wing has largely moved beyond that.
I spent years searching the web for honest, rational right-wing blogs and websites to challenge my views. Like you, I even spent a week at Dean Esmay's blog, attracted by his claims of centrism. This ended during a discussion of a religious parody website - the host believed that the site was no better than a white supremacy site, and when I posted my first comment, suggesting that there was a difference between criticising or even ridiculing a religion, and calling for the extermination of its followers, Mr. Esmay quoted me on the front page and said I was no better than a white supremacist.
(Incidentally, this incident is one of the reasons I post under a pseudonym - the last thing I want is for an employer to Google me and discover such accusations, however unwarranted.)
After awhile, I simply concluded that there is no rational right-wing movement on the Internet. Politics in the West have simply already shifted further to the right than can be rationally supported. Anyone agitating to move it further is, at best, simply out of touch with reality. The only reason sane people vote Republican is habit or ignorance - an ignorance which has been carefully maintained by the entrenched interests you mention.
Or perhaps there's one other reason - The Authoritarians describes how right-wing political beliefs are correlated with a psychological makeup that features "...a high degree of submission to the established, legitimate authorities in their society, high levels of aggression in the name of their authorities, and a high level of conventionalism." I very much recommend this book. It's interesting to note that the neocon right-wing movement which has done so much damage in the US was founded mostly by ex-Trotskyites - presumably RWAs who'd been attracted to the left-wing for the authoritarianism rather than the socialism.
You said:
"I favor nuclear power, free trade, and lower taxes. I'd prefer to see environmental problems tackled with a more market-oriented approach rather than a regulatory approach."
But again, none of these positions amount to liberal heresy. Nuclear power is growing in popularity due to its low carbon output. Many liberals support free trade for the US, although not necessarily for 3rd-world countries (especially given the massive subsidies the US continues to give to its farm exports.) Everyone likes lower taxes until you ask what programs to cut (although the reality of the US's debt and deficit would seem to make tax cuts unwise at this point.) Many on the left support e.g. a cap and trade approach to carbon emissions (although whether this is market-oriented or regulatory is difficult to say - I see regulation as creating the conditions in which the market operates, and utterly inseperable from it. Certainly the market for mortgages in the US would have benefited from some regulation.)
Point being, I don't think you're going to find any rational, reasonable, informed right-wingers. The right-wing political movement simply isn't built on rationality at all. The last rational, informed right-winger I'd found finally gave up on the Republican party and started supporting the Democrats in 2005. I suppose he still considers himself right-wing, but until he's actually on the other side of an important political issue, it really doesn't matter. When I want civil (well, mostly), rational, informed discussion, I have it with people who are (de facto or de jure) left-wingers.
It really is a shame that there's no place where liberals and conservatives can engage in civil discussion. Of the various people who've dropped in, only one could be called conservative; the others have all been liberal. Does that mean that a random sample of people who come across this blog are liberal? Does it mean that only liberals are interested in civil discussion? I don't know. But I still want to encourage any conservative readers to come forward to discuss issues without the childish name-calling that so besmirches so many places of political discussion.
I really liked The Authoritarians. The points he makes are truly frightening. I take some comfort in the observation that not all conservatives are authoritarian.
Point being, I don't think you're going to find any rational, reasonable, informed right-wingers. The right-wing political movement simply isn't built on rationality at all.
That's the best conclusion I can draw from my experience. There is one exception: a retired political science professor I know. He's pretty conservative but he offers sound arguments for most of his beliefs, and he can be convinced by solid reasoning. He reversed his belief on global warming after I walked him through the evidence.
But I just haven't found anybody else like him. One thing that is striking is how the right-wing blogs seem to thrive on synchronized head-nodding. They don't seem to like discussion -- for the most part, they compete with each other to come up with clever ways of insulting liberals.
But again, if there are any conservatives reading this, please join us! You are most definitely welcome and the rules of this blog protect you against any slurs. Perhaps you can provide both skarl and me with a good counterexample!
"Conservatives agree that nobody should lack the basics of human survival (food, clothing, and shelter)."
Would that they did. The conservatives in power, the right-wing conservatives, believe that those who "lack the basics of human survival" only do so because they're lazy, or undisciplined, or whatever: the fault lies within, never without. Any help that society might extend is dangerous and to be avoided.
The liberals that I know don't ever talk about "confiscating everybody's money." They believe, as I do, in progressive taxation, i.e., higher tax rates for those with higher incomes. We used to have a progressive income tax, but not so much any more. The effective federal tax rate for the super-rich today is only slightly more than the rate for the moderately affluent middle class: in percentages, in the low 20s.
Conservatives aren't so much selfish as self-righteous. They believe that all their good fortune stems from their inherent virtue and hard work. Luck? Nobody ever heard of it.
George W. Bush, whose life was one failure after another, now occupies the White House. Is there the slightest possibility that this could have happened had he not been born a Bush?
Please; he'd be lucky to be managing a Kinko's.
"However, I'd like to offer a third argument, one that should be able to work for both sides. I will argue that providing some degree of income redistribution is beneficial to all."
Another argument with which conservatives totally disagree. The only benefit they see is to the recipient, who is almost certain to develop a dependence on this "redistribution" (unless, to use a current example, it happens to be going to the financial institutions whose total mismanagement and blindness created the subprime mortgage meltdown. In this case, of course, the redistribution is "in the national interest".) Funny how the national interest always seems to coincide with their interests.
Here is a thought, if one feels a part of the community that one labors in and is actually a part owner of that community...Pixar, FedEx, by getting stock in that same venture then money becomes secondary to a job well down, as the survival of the community is first and foremost due to the interdependence of each member of that community. This is not a Utopian idea, it is common sense.
Whether we want to admit it or not we are all interdependent and we are social creatures, no one person can do all the things needed to keep living alone.
So if by working at Pixar I put in large amounts of hours to see a product through then I am working for myself as well as my community, and it is this community that gives me the capital to pay for the house, the childrens college, and stock options because they consider me a resource, a part of the team, and knowing that these things are covered, I can pay full attention to my work.
This makes sense to me. In an acting workshop I saw a really incredible example of community.
The facilitator took a ball of yarn while we sat in a circle, and held on to the loose end passing the yarn to a random member in the circle. That person did the same until everyone in the circle held the yarn. She then asked that we make sure that none of the points of yarn in the middle were touching. When this was done she asked on of us to raise their arm as high as possible, and of a sudden more then half of the vectors were touching. This, for me, was a great example of how much one person's actions in a community can affect the whole.
A true communities sum of it's parts is greater than the whole. IMHO
BTW thanks for starting this forum
as I have always been able to discuss with a true conservative, things that a neoconservative would find disloyal speaking to a liberal about. Isn't that how we started this community.
km
km
How about looking at the definition of wealth? I happen to not be an American, I spent some time studying in the US and my wife is from there. Im a European and I guess per definition more "Lefty" than the average american Liberal.
From my perspective I count a major source of wealth as the ability to contribute to the community. This is the main resource which converts into money. Everyone values their ability to contribute, and guards their own positions fiercly. First once they are senior enough to not risk losing their position to newcomers will they allow new people in to become contributirs within their territory without a fight.
When the political systems develop there is a lot of people subconciously analyzing the risk that they will lose their ability to contribute, if they lose that ability they lose what they value. This is not directly related to their wallets, especially in a country like mine with a Gini Index between 25-29.
People start looking at money as a method rather than a goal. Like the gas in your car, you dont really need more than what it takes to get where you want. You know you cant buy your way to where you want to go, because if you try it will cost more than anyone can earn. (Since taxes scale exponentially with income.) So you have to figure out how to cheat somehow.
Well well, I know that if I didnt need to guard my contribution to society I would spend more time helping the "less contributing" people share mine which practically is Game Design in various projects.
The structure of wealth is based on money for some, but the amount of emergence increase in countries that are more leftish.
Maybe abstraction of political systems could make an appearance in "The march of Abstraction 2"?
:-)
Hey Chris, I just found your page. I'm a conservative guy and I'm pretty intrigued by your opinions. Right now, however, it's 2AM. So.. for now, thanks for your posts.
Welcome, Luis! Since we seem to have all liberals and no conservatives here, you have enormous scarcity value to us. I welcome your comments and look forward to having a productive discussion based on different points of view.
I'd also like to give you my personal guarantee that I will not permit any abusive behavior against you. This means more than merely enforcing my strict rules against personal attacks. I will also not permit the "gang pile-up" behavior that I see so often on blogs. One poor soul from the opposite side makes an objection, and finds himself assailed from all sides. That doesn't lead to a productive discussion. If I see something like that happening, I may just (to the limit of my broad-mindedness) jump in with a defense of your position.
Post a Comment