The Sensible Geek

A couple of months ago, I was flipping channels on the TV, and I came across as recorded lecture at the University of Washington.  The punch line of the lecture was “…leads to greater redistribution of wealth.”  And she (the lecturer) said it as if it’s a foregone conclusion that redistribution of wealth is a good thing.  But is it really?  I agree that if we want to claim to be a moral society, we must collectively possess a conscience.  But does it follow that we must provide for the needs of others in order to be moral?  And what are the long term implications of redistribution of wealth?

First of all, this lecturer spoke as if there were no valid contravening arguments to redistribution of wealth being a good thing.  Now, being the argumentative sort, the moment someone claims that their presupposition is the only valid position from which to craft an opinion, I immediately want to knock down their pedestal.  The lecturer’s comments were based around the notion that policies X, Y and Z are good because they result in greater redistribution of wealth.  Great, so there are policies that cause a certain effect — the problem is, she never discussed if or why that effect should be desired.  This same logic could be used to say “bombing Moscow is good because it will result in Thermonuclear War.”  Actions are only good if the results of such actions are good, so to continue with my example, if Thermonuclear War is bad (and I think most of use can agree on that point), then bombing Moscow is also bad.

It’s just irresponsible to to claim that the means are good without establishing why the ends are good.  To establish the “goodness” of something, one must also establish the “goodness” of the effects of that thing.  This lecturer’s comments amount to saying “this is good because I said so.”  Yeah, that’s convincing.

That’s the context upon which I want to raise a larger question: If, to be a moral society, we must have a social conscience, does it follow that we must provide for the needs of everyone in our society?  As usual, the answer to that question seems to be mostly dependent on your own perspective.  If you’re poor, then redistribution of wealth provides a benefit to you.  If you’re wealthy, however, redistribution of wealth harms you.  Supporters of this redistribution like to suggest that taking $10,000 from a person who makes $100,000 per year and giving it to someone who makes $20,000 per year, helps the poorer person to a greater degree than the degree to which it harms the wealthier person.  They justify it, saying things like “it’s only ten percent of the rich man’s income, but it increases the poor man’s income by 50%!”

There are two huge issues here.  First of all, redistribution supporters don’t want to answer this very simple question: “does a poor person have a right to a share of a rich person’s income, and if so, why?”  Frankly, I don’t think anyone has a right to anyone else’s property.  An individual has the right to offer goods or services, in exchange for payment, but they do not have a right to commandeer someone else’s property, simply because the other person has more property.  By this logic, if I own a half acre of land, and my neighbor owns 5 acres, I should have every right to claim part of his land as my own.  My neighbor bought his land with money.  In the same way, we each “buy” our income by spending time working.  If I don’t have a right to a portion of my neighbor’s land, why does a poor person have a right to a portion of a wealthy person’s income?

The second issue is an exercise in reductio ad absurdum, reduction to the absurd.  If it is a good thing for money to be redistributed from wealthier people to poorer people, then to maximize the “goodness” in our society, we ought to redistribute as much as possible.  Said differently, to maximize the “goodness” in our society, we must completely equalize income across the board.  The result is a society in which every member of society receives the same amount of money regardless of what they do.  In this example, a doctor, someone who went to college for at least 8 years, would bring in the same income as a high school dropout.  This makes no sense.  The expense of the higher education can be mitigated by the argument that college would be paid for by the government, but there is no mitigation for disparity in the investment of time required to complete medical school versus dropping out of high school.  The fact is that society places a higher value on the expertise of a doctor, as opposed to the expertise of a high school sophomore, and so it follows that a doctor ought to be paid more.

So what happens if we equalize all income?  Quite simply, if there is no return on the additional time investment required for higher paying jobs, then fewer people will make the investment into higher education.  If there is no additional income as an incentive to innovate, then fewer people seek out innovative ideas, resulting in stagnation in technological advancement.  In fact, if working harder does not return greater compensation, and if working less hard does not return less compensation, there is no incentive to work, and as a result fewer and fewer people will work.  As this continues, fewer and fewer people opt to work, decreasing overall national production, which decreases the equalized income that each citizen receives.  Less compensation results in even less incentive to become educated, innovate or work, and the downward spiral continues.  Ultimately the result is a society in which no one works at all, at which point, we all starve and die.

Now obviously, that’s the extreme.  But if we can demonstrate the extreme of a supposedly good thing is no longer good, then there exists some point at whch the net result of a good thing is less and less good, at some point becoming neutral, and ultimately turning into a negative effect.  The real question, therefore, is at what point does the “goodness” of wealth redistribution wear out?  This is a difficult question to answer, and it is frequently debated in the halls of power.

From an ideological perspective, it comes down to what you believe the purpose of government to be.  According to the preamble of the US Constitution, the purpose of government is to “…establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity…”  In my view, this means the purpose of government is to establish and enforce laws to justly govern the people (establish justice), protect the people from domestic (ensure domestic tranquility) and foreign threats (provide for the common defense), all of which “secure the blessings of liberty.”  The point of contention, therefore, comes with how we define what it means to “promote the general welfare.”  Redistributionists suggest that to promote the general welfare, the government is empowered to ensure every citizen’s needs are provided for.  To do this, the government needs money, which it takes from other citizens.  But again, to what extent?  If government exists to execute the wishes of a society (that’s the “for the people” part), then if the government wishes to provide for its citizens’ needs, then it would follow that society wishes to provide for its members’ needs.  If this is the case, then why does the government need to facilitate it?  If society really does wish to provide for everyone’s needs, then those who can afford to support others would do so, negating the need for government intervention.  Clearly this is not the case.  Therefore, if society does not deem it neccessary to provide for everyone’s needs (demonstrated by society’s failure to do so), and if the purpose of government is to execute the wishes of society, then by extension, it is NOT the government’s purpose to redistribute wealth for the purposes of providing for citizens’ needs.

From a practical perspective, any redistribution of wealth reduces incentive to work, innovate and become educated to some degree.  In an optimally functioning society, incentive to become educated, work, and innovate is maximized, providing for the long-term success of the society.  In order to maximize incentive, incentive-reducing policies should not be implemented.  By this reasoning, wealth redistributing policies should not be implemented to avoid stifling innovation.

So the bottom line is this: I agree that redistribution of wealth is a good thing, to some extent.

I just believe that extent is zero.

^Z

TheSensibleGeek Economics, Politics capitalism, redistribution of wealth, socialism, taxation, welfare