Arnold Kling  

An Instructional Video

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Reason TV walks through a series of thought experiments about income redistribution. It's pretty much libertarianism 101, likely to please those who agree and put off those who disagree.

One point that the video raises (perhaps the main point) is that the institution of the state changes the way people feel about coercion. Almost nobody would feel ok about personally coercing George to give money to Oliver. On the other hand, if we can put some layers between us and the coercion, we feel fine with it. The state works as a device to desensitize us to the commitment of evil acts.

Again, that is a proposition that hard-core libertarians can nod their heads to. But people who are not in that frame of mind probably won't be persuaded.


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CATEGORIES: Political Economy




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The author at The Liberal Order in a related article titled Does Right Become Wrong Because the Majority Agree writes:
    Old Republic Insurance Co., an insurer to banks of mortgage loans, is being sued by Bank of America for failing to compensate BofA for losses on mortgages that went bust. The insurance company argues that BofA lent to borrowers who... [Tracked on December 20, 2010 8:50 PM]
COMMENTS (19 to date)
John Thacker writes:

I had a (liberal) co-worker who was lamenting how a neighborhood he was interested in moving to had very strict HOA covenants on design, things like color of the house, no visible basketball goals, etc. He really thought it went too far.

I sympathized, and mentioned that I knew of some entire towns that had ordinances that strict, so you couldn't even find a more accommodating neighborhood in the town.

He then switched gears and explained that he really didn't have a problem with it if it was the whole town doing it because, hey, "they voted."

I found that thinking bizarre.

Lewis writes:

Does opposition to redistribution entail opposition to a flat-rate income tax as well? Or a consumption tax? We don't think of these as being redistributive, because they are less redistributive than a progressive income tax, but it's still the case that a flat-rate income tax will take more money from high earners and less money from low earners. If government services and public services are available to all, then these taxes will wind up redistributing wealth downwards.

It seems like the only forms of taxation that don't directly redistribute income are poll taxes.

Julien Couvreur writes:

Lewis, the point about the video is not whether the goal you have in mind is redistribution, whether it it is progressive or not, etc.

Rather the point of the video is to consider whether it is ok to use force on someone else to achieve your goal. Also, it raises the question of whether the answer changes as a larger number of people agree.

Carl writes:

@ John

You should tell your co-worker that, as a home owner, he is entitled to vote for HOA leadership.

Alex J. writes:

John Thacker: Transubstantiation.

When a person owns a gun for self defense, that's "violence", but when armed police come and send him to a prison where he will be shot for trying to escape that's "non-violence".

It's a miracle!

jb writes:

Reading enough Ezra Klein, I feel like I understand something about liberals which I didn't understand before: to wit: to some degree, they think of the government as extensions of their own identity.

In other words, a majority of economists work for the government. If you ask Ezra Klein who employees the majority of economists, he will say "We do"

Once I comprehended this, a lot of things fell into place - if Ezra considers the government to be, to some degree, an extension of himself, then no wonder he's so tolerant of governmental restrictions on economic liberty, and so unconcerned about governmental power grabs. If you think of the government as a conglomeration of the citizenry, then there's no way for power to be 'seized' by the government - it's like saying I stole power from myself.

I'm sure he understands the logical concepts of how the government is distinct and different from the individual voters, but I think, in his heart, he feels a very strong sense of ownership of government, strong enough that it simply wipes away any concern about misdeeds.

Mark Brady writes:

Lewis writes:

"Does opposition to redistribution entail opposition to a flat-rate income tax as well? Or a consumption tax? We don't think of these as being redistributive, because they are less redistributive than a progressive income tax, but it's still the case that a flat-rate income tax will take more money from high earners and less money from low earners. If government services and public services are available to all, then these taxes will wind up redistributing wealth downwards.

"It seems like the only forms of taxation that don't directly redistribute income are poll taxes."

1. All taxation is redistributive, not least to the benefit of the state bureaucracy that collects the taxes and allocates the proceeds.

2. One widely used argument for a proportional tax on income or wealth or, for that matter, expenditure or consumption is that wealthier households make more use of tax-financed public goods like police protection and defense than do poorer households. Thus, by this reasoning, it does not follow that "[i]f government services and public services are available to all, then these [proportional] taxes will wind up redistributing wealth downwards."

3. In both theory and practice, poll taxes do redistribute income. Consider the poll taxes that the British and French colonial administrations levied in order to increase the supply of native labor for foreign-owned mines and plantations. Forced to pay these poll taxes, which often took the form of "hut taxes" on native dwellings, natives would work for wages for the foreign employers. Of course, the ostensible justification was that the colonial powers were bringing law and order to native societies (the public good rationale for government) but the reality was that it served the interests of foreign owners who needed cheap labor to work in their mines and plantations.

Hyena writes:

I like my layers; what I dislike is collecting a debt from a heavily armed carpenter.

clg writes:

jb,

Thanks for your explanation. It actually helps bring some things into better focus for me.

fundamentalist writes:

Socialists (progressives) see the state as a reflection of the will of society, which is true. It is the will of the majority. And socialists see the will of the majority as sacred, except when it goes against them. The majority wants to take money from the minority wealthy and give it to themselves and the poor. What is that but tyranny of the majority? And how is that different from any other kind of tyranny?

We shouldn't be against any kind of redistribution. No one wants to live in a society that does not help the poor. But charity (private or state coerced) is nothing but increased consumption at the expense of investment. Less investment and more consumption means we all get poorer in the future. We have to live with a trade off between the two. It's basic production possibility frontier stuff. The question is whether to allow free people to decide how much to give of their own resources to the poor or whether the majority should decide how much the rich should give to everyone.

Mark Brady writes:

fundamentalist writes:

"Socialists (progressives) see the state as a reflection of the will of society, which is true."

Isn't that also in some sense true of most, if not all, conservatives, even though they may not want the state to pursue quite the same goals as socialists or progressives?

Robert Johnson writes:

"What is that but tyranny of the majority?"

And so is all collective action which doesn't include an opt-out. It calls into question the legitimacy of the very notion of government - at least, as it is practiced anywhere in the world.

Without the tyranny of the majority, how do concepts like crime and punishment fare? Do they even survive?

lawyerJD writes:

This post is sheer nonsense. Far more damage to humanity is done by banks siphoning retirement accounts and other financial institutional fraud than the "redistribution" mentioned in the post. In fact the wealthy rely on the redistribution as well (Police, infrastructure and other public goods). Most financial complex instruments are essentially a way of "desensitizing" bankers/financiers to sheer economic damage they cause to the 99.99 percent of society that doesn't participate in the same activities.

John Papola writes:

I find the arguments for “democracy” as justification for violence to be essentially thoughtless conservatism. It’s as if state violence is okay by the sole virtue that it is the status quo.

But one step further in the conversation with most strong advocates of statism reveal a contradictory disdain for democracy itself. Democracy, it turns out, is nothing but a front put up by progressive reformers who ultimately believe that wise experts can and should lord over us using their technocratic wisdom. This is why the Fed has so much support from the “left” (broadly defined). This is why progressive reformers like Tom Daschle use the Fed as a model for how healthcare should be run.

They couch this disgust for democracy in yet another marketing buzzword: “independence”. We need our technocratic overlords to be independent of “politics” because “politics” is corrupt and politicians are corrupt. This line makes many, including Michael Moore, sound downright libertarian. Only they aren’t, because they hold in their mind this bizarre contradiction that politicians are corrupt, but their appointees will be wise and just.

When pushed on these points, the inevitable response is “we need to get money out of politics”. This is utopian based on all recorded history. But lets pretend it can be done. The means to do this are profoundly undemocratic and must be instituted by a narrow, top-down agency who is, of course, “independent". And so we are right back where we started.

Progressive statism is a call for tyranny. It is an infantile belief system built on a web of contradictions and pitched using populism and fraud.

None of that is to say that progressive reformers have bad intentions. In many if not most cases, their intentions are good. They want to improve the world as they see it. But this is no yardstick against which to judge ideas. EVERYONE believes that their intentions are good and justified. Intentions are irrelevant. Intentions, again, are an infantile justification for actions.
Consequences are what matter.

That’s my piece.

John Thacker writes:
Most financial complex instruments are essentially a way of "desensitizing" bankers/financiers to sheer economic damage they cause to the 99.99 percent of society that doesn't participate in the same activities.

"LawyerJD," do you realize that many, if not most people feel the same way about lawyers, the law, and complex legalisms and regulations? (And similarly about politicians, bureaucrats, and complex regulations and legislation.)

R. Richard Schweitzer writes:

Largely overlooked in the "redistribution" chit-chat (seemingly concerned with incomes and "wealth") is the accelerating frequencency and amounts of redistribution of COSTS.

A prime example, of course, is the various "HealthCare" legislation, which has traded up (and out-broadened) from "cost-shifting" to compulsory cost transfers.

We may "run out of other people's money" (incomes)
to redistribute, but we are not likely to run out of costs to redistribute, especially in those sectors where costs are rising at arate greater then incomes.

Jacob Oost writes:
Reading enough Ezra Klein, I feel like I understand something about liberals which I didn't understand before: to wit: to some degree, they think of the government as extensions of their own identity.

Yes, yes, yes, exactly! This is key to understanding many liberals. They also see the government as an extension of society. They use the terms "society" and "community" interchangeably with "government" or "state," in fact they often avoid the words "government" or "state" for the more benign formers.

This is why it so steams their beans to see somebody like Sarah Palin or Dubya, you know, somebody who isn't "one of them," somebody who isn't an upper-middle-class faux intellectual with a useless humanities degree from some hoity-toity tweedville college.

To a certain extent, this is why Clinton and Obama have so angered many conservatives merely by being President: because they are CiC of the US military, which many conservatives see as sacred and to a certain extent and extension of themselves. (that's the last time I'll use "extent" or "extension" in this comment, so relax)

Jacob Oost writes:

lawyerjd, sure there is a lot of rent-seeking in the financial sector, but that's because the government has that sector so tightly regulated that it's mainly competition between oligarchs, rather than a truly competitive industry. IOW, it is a good example of how the government messes up what the free market would take care of by its competitive nature.

And how are police, courts, property rights, etc. "redistribution"? I can't imagine even an anarcho-libertarian calling those things redistribution.

Kalim Kassam writes:

Arnold, The way you've worded this post it seems like Reason TV created the video. But they've only linked to it from their blog. Credit should go to Tomasz Kaye.

@Jacob Oost, evidently you've never met Walter Block. I don't want to put words in his mouth, but I'm pretty sure he'd readily call tax-funded courts and police pinko redistribution.

More constructively for the discussion at hand, see his teacher (and the anarcho-capitalist) Murray Rothbard's Man Economy & State for the argument for why this is so. In Chapter 12 Section 7 Binary Intervention: The Government Budget he claims:

"Since taxation cannot really be uniform, the government in its budgetary process of tax-and-spend inevitably takes coercively from Peter to give to Paul (“Paul,” of course, including itself). In addition to distorting the allocation of resources, therefore, the budgetary process redistributes incomes or, rather, distributes in­comes."

In Chapter 12 Section 8.B Attempts at Neutral Taxation he makes it clear that what he is talking about in this chapter applies even to "a seemingly clear-cut case of pure service, police protec­tion".

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