Redistribution

There is no faster way to make a Libertarian or Republican hyperventilate than by mentioning the word “redistribution.” Doing so will at best result in any one of them nearby flying into a blind, demented rage devoid of all reason and surroundings, causing them to slobber at the mouth probably to the point of foam as they scream incoherently in a volcanic rage beyond their control. (A very similar thing happens when the word “fair” is ever used in their presence. I’ve seen it.) They won’t even sound human any longer. They will sound like some kind of alien. A tortured animal from another world. Seizers almost always result in the end. At worst, hearing the word redistribution will cause a switch to flip in their head and drop anything they are holding and simply fling their body at you without any regard, resulting in a fist fight or them trying to kill you or gnaw your face off with their mouth. Just hearing the word redistribution to a member of the Economic right is  the same to them as seeing a family member die. Therefor it is important to know how to articulate just how integral redistribution is to a prosperous society, and how paying back into the system that allowed us all to prosper is actually the key to creating more wealth, not less, for everyone.

Reframing the argument is once again one of the most effective methods. Redistribution is really just another word for social insurance and investment against unknown risk in a market system, and for future prosperity through public goods and capital. Edward Kleinbard has some of the most compelling rebuttles to the objection of Redistribution ever see. First method of attack would be the Myth of Ownership route – to attack the premise of Pre-Tex income to begin with. Why should we accept the distribution of a market system rife with market failure as faultless to begin with? Second, prosperity and growth depend on public investments, which will always be redistributive in some measure.

Public Goods and Public Investment

Perfectly competitive markets do not yield perfectly equal outcomes. To the contrary, whether through luck or differences in native endowments, individuals’ outcomes vary all over the place. Those who for whatever reason enjoy great material rewards in the marketplace do not directly benefit in the short term from many of the complementary collective investments on which I focus, like public education—the rich can buy the goods directly. In turn, one cannot expect those who have few assets and little income today to fund those collective investments, because they do not have the money to invest, and in the absence of perfect markets cannot borrow to make these otherwise-compelling investments. Location 3183

As a practical matter, investment in complementary collective goods or collective insurance programs requires the mechanism of state coercion to take from the rich and invest in—not give to—the rest of America, in ways that ultimately redound to everyone’s benefit. In modern political discourse, this notion that we collectively should make highly productive investments in those without the resources to invest in themselves quickly is dismissed as “redistribution,” as if that label disposed of the matter, because “redistribution” in turn is viewed as the battle flag of “class warfare.”     The logical error should be obvious. Market triumphalists who have made “redistribution” into the battle hymn of the underclass treat social insurance and investment as a forcible and quickly consumed “gift” to the poor, like a Christmas goose (perhaps the one that laid the golden eggs?), when in fact the purported redistribution should be analyzed as money spent on economic programs (insurance or investment) with measurable short- and long-term economic returns. Those programs must be judged on the basis of those returns, while giving appropriate weight to the coerced nature of the investments. The market triumphalist view is profoundly non-economic, because it brooks no possibility of making investments with very high economic returns shared by society as a whole, whenever those investments are made through the mechanism of the state. Location 3188

This is exactly what we needed during the redistribution debate with Ginger that never took place. I was confident but cautious. We had to piece things together. Thus would have been beautiful. “Redistribution ” isn’t taking money from your wallet and handing it to a lazy person as a gift to be squandered on booze. It’s an investment into the society that allows you to measure your wealth to begin with, in a way that increases the welfare of everyone. You might be able to buy your own education, but we all are better off with less blight. Investments in those goods and policies that increase all of our welfare is the epitome of growth. Welfare programs are the biggest nuisance to the market fundamentalist. But enabling your labor pool into productivity is the quickest way to grow and economy. It’s a mystery why a starving man on the street makes us all better off when we could be empowered into a job.

One of the three great strategic errors of the progressive movement in America over the last several decades was to allow the highly charged term “redistribution” to creep from social science literature to common discourse, as if it were a neutral concept. It is anything but neutral, right from the “re-” in “redistribution,” which implicitly asserts a claim that the market outcomes reached in a world dominated by imperfect markets and random acts of fortune are imbued with a legitimacy that “redistribution” upsets. Location 3199

Our vocabulary here betrays us. You can see this if, when reading any article on fiscal policy, you substitute a term like “social investment” or “social insurance” for “redistribution”—the entire tenor of the passage changes. Location 3204

Economic growth is the product of investment in physical and human capital, new production technologies, and new products. Location 3225

A capitalist offered the opportunity to invest a few hundred dollars today in a machine that will yield thousands of dollars in profits for years to come would jump at the opportunity. But of course there is no market in human lives, nor should there be, and capitalists therefore cannot invest directly in the most productive and important generators of income in American society—its citizens (at least when those citizens are not yet in the workforce). In the absence of such a market, we as a nation are doomed to leave on the table the returns we collectively could reap by investing in the proper nutrition of our most vulnerable citizens—unless we acknowledge that government exists as the mechanism to enable all of us collectively to make just such investments. Government here complements private markets by offering forms of insurance and making completely sensible investments in areas that private markets do not and should not reach. Location 966

All that is required is to appreciate that the poorest Americans are still Americans—that we are part of one large community, one society. If that fact is truly internalized, then it is in our interests to make the investment, because doing so will increase our national welfare (and in this easy case our national income as well), even after taking into account the modest costs to us of implementing the program. Location 973

Note: These arguments rival even The Myth of Ownership in making the case that the alleviation of poverty is a public good.

And if the clear positive welfare returns to our country are insufficient to motivate us, if we must be assured that we personally will benefit from this collective investment, well even that is easy to demonstrate here. The modest costs of better prenatal and early childhood nutrition, for example, will lead not only to lower government safety net expenses later in life (which will mitigate future tax burdens), but also to higher national income, which in turn means higher demand for the goods and services that we or at worst our children will produce, and therefore higher incomes for us or our children. Location 976

Best passage in the book so far. Not only has the case been made, but he even meets the selfish conservatives on their own field. “Fine, even if you are a selfish prick who only cares about himself, then here is the case that even you will benefit directly.”

Behind the pious statements about what we can and cannot afford resides a darker picture, of smirking “haves” thinking that they can segregate themselves and their economic outcomes from the futures faced by large swaths of American society, and a Congress that has shown itself to be much more attuned to the opportuning of the affluent than to the needs of the poor. Location 989

The explicitly moral component of the book’s argumentation therefore comes down to this: when there is a clear economic case for collective investment or insurance through the instrument of government spending (net of considering the costs of government taxing) that will enhance the country’s welfare, ignoring that opportunity is profoundly immoral. We endanger our nation’s fiscal soul when we leave such opportunities on the table. Location 999

Education 

Realistically, educating a child takes far more than $100 a school year, but that is all that is asked of parents in public schools. The money comes in great proportion from taxpayers of a higher income level, even though without children. However, without education we have no meaningful society or economy to begin with, education is antecedent to any hope of a prosperous economy. But Education is highly redistributionary in nature.

Inequality 

Since we have such large disparities in income and wealth in the US, any hope for funding the public treasury will come from a tax system where payments from from those with money, since funding a government with taxes from people with no money will result in no government. While this is a Conservative dream (Except in the private sphere, where they can’t get enough government) as we see from the rest of this site and the real world, this is not plausible.