The Libertarian Case for Redistribution

I'm going to take a shot at a short post today.  It's way outside my field, so it'll be short on detail and substance (and more likely to be wrong), but I'm hoping that makes it shorter.

I'm not libertarian, but I'll save my objections to the libertarian (and Libertarian) causes for another post.  However I have several close friends who are libertarian, and I'd like to make a case to them in favor of redistributing the hard-earned money from those who have more money to those who have less - by force from the government.  If you're not libertarian, or have no issue with the above-mentioned idea, you might still find this post interesting.  There are closet libertarians all over the place, and I think this is an important discussion to have - especially with libertarians.  Okay, I've reached my quota for the use of that word this post.  I'll try to avoid it from here on out.

To start with, I'd like to acknowledge some basic points that a certain political outlook might want us to take as given.  We might debate each point, or the finer details about when exceptions apply, but for the sake of persuasive power, let's not do any of that today.  Instead, let's accept the following:

  • Redistribution has long been promised (in the US and in other countries) to play a significant role in reducing poverty.  On one hand you could point to rising standards of living across the US and say people are better off than they were in the past.  I suspect much of this can be attributed to the fact that in 1969 there was no such thing as a smartphone (or hundreds of other more important examples), and now 50 years later you can get one on the cheap that has more processing power than the computers that got us to the moon.  Let's be generous and say the argument in favor of redistribution should not lean on a dream of utopian egalitarianism that past schemes failed to promote.
  • The rich pay more in taxes than anyone else.  Not only that, but they pay more taxes as a percentage of their income than anyone else - even when you factor in state, local, and sales taxes.  (I think; correct me if I'm wrong.)  Thus, all the bellyaching and complaining that rich people owe their wealth to the taxpayers who built the infrastructure their companies are based on is a lot of vicarious offense.  If people had to pay taxes proportional to their use of roads and services, it's the poor and middle-class who would owe money, not the rich.  The rich not only built their businesses, they built the roads too!  They don't "owe society" in some ephemeral way.
  • I don't see anything inherently immoral about rich people having money, such that we should take it from them if they get too much of it.  For one thing, who makes this determination?  If it's just "everyone who has less money than they do" that means half the population gets to decide that the other half has too much.  I don't think we can build a civil society on this kind of principle.  Sure, it's the "billionaires" today, but tomorrow it'll be the "top 1%", then the top 10%, then the top quintile, etc.  There's no inherently objective measure of what people "deserve" to have, nor is there a clearly moral case that it ought to be the government's role to enforce whatever arbitrary moral line we decide to draw.  And that's not including the question of whether government is capable of taking on that role without fundamentally changing its nature in unsettling ways.
I hope I've channeled my inner ... classical liberal there (I know that's a slightly different thing, but at least I didn't use the word).  You can assure yourself I'm not going to go back to the same tired arguments that haven't persuaded libe- ... my target audience in the past.  Instead, I'm going to argue that even they should support wealth redistribution programs for entirely self-interested reasons.

To get there, let's take a brief look at the revolutions of the past, be they the French, Spanish, Cuban, Mexican, Russian, Roman (from the Republic to Empire), etc.  One feature I see a lot in revolutions is envy of the poor and middle classes against the wealth of the rich.  And there are a lot more poor people than there are rich people.  If the poor and middle-class could unite in common cause, they could just vote to get the rich people's money from them.  The US system is set up as a republic - not a democracy - to guard against exactly that kind of collusion (though not just regarding wealth disparities, but for any minority group that a democratic majority might want to take advantage of).

It's a good thing we have that republic.  It gives the structure we need to continue a system of prosperity that requires things like the rule of law and a respect for property rights.  Indeed, that system is literally the only thing standing between the masses and the kind of wealth redistribution that might destructively transform society.

Looking back at the Roman Republic, this issue of inequality was constantly being brought up.  The rulers at the time pushed back against the demands of the people by distributing grain to everyone.  These grain giveaways would increase as people complained more and asked for more representation in government (usually in times of plenty brought about by the sacking of foreign kingdoms), and although the people never really stopped complaining there's a strong argument to be made that without these grain distributions the Roman Republic would have fallen to revolution long before Julius Caesar (or wherever you want to draw the line from republic to empire).

This is the reason to support redistribution.  Just like fiat currency is an illusion of value and banks are an illusion of stored wealth, the Republic is an illusion of protection.  If people stop trusting in their ability to trade in dollars or if they make a run on a bank (ignoring FDIC insurance) the institutions fall apart.  There's nothing behind them, other than the perpetuation of an illusion by way of social norms.

Likewise, a government that protects the minority against the whims of the majority is also an illusion.  We can write laws dictating that the speed limit on some road is 35 mph, but if everyone goes 40 mph the de facto speed limit is the one that counts.  If everyone decides to disobey a law it becomes impossible to enforce.  And if the people decide the current system isn't working for them they can stage a revolution.  (It likely won't go where they want it to go, but that's no bar against revolution when it comes.)

So why should the liberty-minded individual support the ratcheting redistribution schemes that are constantly layered on top of each other?  For the same reason the Roman Senate kept distributing the grain.  Because the price of a system that allows free enterprise wasn't just paid back in 1776.  It's a price you have to keep paying.  That doesn't mean you support all the utopian fantasies that keep getting pushed about how this next 'reform' is going to eliminate poverty.  But there's a difference between rejecting redistribution as altogether indefensible, and working within the system to ensure the ratcheting process doesn't move faster than the economic growth that would support it.

One consistent observation about the 'democratic' nations of the developed world is that they all tend to have some kind of social safety net.  The net is designed differently in each nation, but a common feature they all share is that they keep getting bigger over the decades.  Why is this?  Maybe it's not just the fashionable thing to do.  Maybe it's because nations that don't give some sop to the poor end up in violent revolution.  They're no longer counted among the "rich democracies", so nobody cares whether they have a safety net or not. 

There's the case in favor of redistribution.  It's not based on an egalitarian fantasy, debt to society, or an attempt to soak the rich.  It's based on a very old heuristic:

You have to pay the piper.  Or else...


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