An odd approach to income redistribution

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.

Moral Equivalence

Moral equivalence

One of the oddest aspects of the conservative approach to foreign policy is its insistence upon the moral superiority of the USA. They place great weight on the notion that the USA is the good guy and its enemies are bad guys. They express deep contempt for what they call "the assumption of moral equivalence". They get quite emotional over this issue.

I don't deny the basic moral superiority of the US over many tyrannies in this world. There's no question that the USA is a better and nobler country than Mr. Kim's North Korea, Mr. Hussein's Iraq, or Mr. Putin's Russia. My objections are three:

1. That doesn't make us lily-white. While the USA has done many fine and noble things, it has also perpetrated some heinous crimes. We practiced ethnic cleansing against the Indians. We have broken treaties, tortured and murdered innocent people, invaded small nations for invidious reasons, and subverted legitimate governments whose foreign policy we oppose. We're still better than a lot of other countries, but we shouldn't get carried away polishing our halos.

2. That doesn't give us the right to commit crimes. Two wrongs don't make a right. The fact that Mr. Hussein killed a million Iraqis doesn't justify our killing a hundred thousand Iraqis.

3. But this is my most important objection: it's irrelevant. Every foreign policy decision we make must be decided on its own merits. It doesn't matter whether the shooter wears a white hat or a black hat; the only way to judge the shooting is by its actual results, not the moral worth of the shooter. If a policy decision is stupid, our virtue does not override its stupidity. Even if the murderer is a saint, it's still murder, and the past holiness of the saint does nothing to excuse the present iniquity of the murder.

Twenty years ago, my geopolitical game, Balance of Power, was criticized by conservatives because it didn't take into account the moral superiority of the USA over the USSR. Both sides had the same set of policy options: sending weapons to support governments or insurgencies, providing economic assistance to weak governments, and so forth. Both sides pursued their geopolitical goals using the same methods. And conservatives were indignant about this symmetry. They seemed to want the USA to have some special "Moral Superiority" magic wand that it could wave to make evil communists cringe in defeat. None of them ever articulated any suggestion as to how the fundamental moral superiority of the USA should be factored into a geopolitical simulation game. They just complained that I hadn't done so.

Another symptom of this is the refusal to compare the unintentional killing of innocents by friendly forces with the intentional killing of innocents by enemies. When American forces bomb a village in Afghanistan and kill innocent civilians, conservatives shrug their shoulders and dismiss these deaths as "collateral damage" -- excusable because it was unintentional. But they deceive themselves when they claim it was unintentional. The pilot who dropped the bomb didn't launch it accidentally; he had every intention of dropping that bomb on that village. His commanders intentionally ordered him to fly that mission. And their political masters intentionally ordered the military to carry out the operations that led to the killings. There was no accident here -- everything that happened was intentional.

It is true, of course, that none of the participants in the decision-making process desired to kill innocent civilians. They desired to kill evil terrorists, not innocent civilians. But that doesn't eliminate their moral culpability in the deaths of the innocents. Any reasonable person knows that, when you bomb a village, you will probably kill innocent people. The act does not constitute murder, because there was no desire to kill innocents. It does, however, constitute manslaughter: a disregard for the safety of other people that leads to their deaths. Of course, I don't blame the pilot, because he is obeying the lawful orders of his superiors. I blame the body politic that sent him on that mission. I blame the USA.

So yes, I acknowledge a distinction between terrorists and the USA: they are guilty of murder where we are guilty only of manslaughter. But conservatives insist that we are entirely innocent, that there is no blood on our hands. I disagree.