top | item 12463668

An Analysis of Motivations for Income Redistribution [pdf]

41 points| jackgavigan | 9 years ago |www1.cmc.edu | reply

76 comments

order
[+] hasbroslasher|9 years ago|reply
Of course desire for redistribution is motivated by self-interest! Why should laypeople starve while an ever tinier class of people continues to own and profit from the world? The irony of the "they just want free shit" people is the sad truth that the wealthy are constantly acting out of political self-interest as well, just that their interests are lessening the government's interference with their finances.

The irony I always see in these scenarios is affluent people's short term memory about history - the invading barbarians, the destruction of the aristocrats' temples, the brutal dictatorships that gained hold from popular outrage about the bourgeois. There's an easy way to prevent this kind of thing, and it's by fostering a society where people can't get angry enough (or powerful enough) to do something totally stupid. A second American revolution seems unlikely as of today, but our current political landscape is telling about how royally broken the world is soon to become.

[+] DougWebb|9 years ago|reply
I don't think a second American revolution is unlikely; I think it's inevitable if conditions don't change. I don't think it'll happen today, but eventually it will. Your historical examples are spot-on; every civilization in history that survives long enough eventually has all of its wealth and power vested in the hands of a small elite, and then there is a revolution that destroyed the civilization. The only long-term survivors seem to be the civilizations with strong gifting economies, or where the overall civilization is so poor that there's very little difference in wealth between the poorest member and the ruler.

Those who oppose Income Redistribution seem to think all of their wealth is going to be taken away. Very few advocates actually want that. I think most of the issues of wealth inequality could be solved if the wealthy were just a little less wealthy, and got richer a little more slowly, than they currently do. They'd still be quite wealthy, and probably wouldn't even notice the difference as far as their lifestyle and security. But everyone else would feel a lot more secure and have more opportunities, and that's what will prevent the revolution.

[+] ArkyBeagle|9 years ago|reply
My position continues to be that - because of the marginal value of a "dollar" - redistribution is justifiable. Even Hayek considered being open-minded about having certain goods be considered sufficiently public goods as to be treated as public goods.

If we consider monetary velocity as a public good, then doing things to support it is... supportable.

The problem may be how we go about this.

It is just that it may not actually be possible, unless someone can show a method whereby it can be done without corrupting the agents who execute it and corrupting those who receive it.

Not having governments interfere with their finances is perfectly respectable position. It's positively rude to ask how much someone makes. SFAIK, the various versions of the income tax were designed to be fairly rude. They were, of course, initially targeted only at those with very high incomes, then we got frog-boiled into everyone having to be subject to them.

Tax rents. Not income. Then, perhaps there will be less pain.

[+] TACIXAT|9 years ago|reply
I have a decent income (s.t. it would be measurably reduced in an income redistribution situation) and I want it for self-interest reasons as well. I would be taxed more, sure, but I wouldn't have to worry about someone robbing me because they are starving. If we could improve the stability of society by giving the less fortunate a little off the top, that is really in line with my interests.
[+] meanduck|9 years ago|reply
Lets say we have total population P, fraction of rich q. Total wealth W, fraction of wealth possessed by rich x. Lets say we take txW and give to poor.

Share/poor : txW/P(1-q)

Fractional increase in wealth of a poor (FI) : ( txW/P(1-q) ) / ( W(1-x)/P(1-q) ) = tx/(1-x).

We assumed all poor have same wealth.

Some quick values for (t = .1 = 10%) (x, FI) (10%, 1.11%) (15%, 1.275%) (25%, 3.33%) (50%, 10%) (75%, 30%) (90%, 90%)

Lets say 1%er have 25% of all wealth then poor will see 7.5x3.33 ~ 25% increase in wealth if 75% of rich wealth is taken.

Conclusion: everyone loses in a revolution.

[+] dax1928|9 years ago|reply
Some people have pride in needing less. I have always been paranoid that I overstay my welcome, or that I'm too needy. I obsess over efficiency, and strive to require less to function than the others around me. I seek to be a provider, not a consumer - that sort of reputation is an ideal (especially here in the South) and proves that I am stronger. It is a constant competition that ultimately enable my species (specifically the environment in which it dwells) to have more resources to work with.

Do not fall victim to envy and anger at the "one-percent". They have great responsibility, and there will exist a balance if they do not properly manage their resources (not necessarily in the form of redistribution). Just find the humor in the silly things money buys that only offer the utility of announcing wealth.

[+] tjic|9 years ago|reply
"People like free shit."

How hard is that?

The abstract says it in a bit more formal academic tones: " The findings suggest that for most people, the motivation for redistribution is financial self-interest".

But put it to a vote to pretty much any group of people, at any time, in any place, and they'd prefer to steal from their neighbors than they would to work themselves.

The trick of civilization is curb this impulse, thus allowing the generation of positive sum games.

As Milton Friedman once said (and apologies for butchering this; it's from memory): the wonder of capitalism is that it's the only system that restrains the capitalists.

...by which he means that every society has rapacious take-no-prisoners people.

The trick is to channel that into METAPHORIC rape and take-no-prisoners, and away from the literal implementation.

[+] fnlkewnf|9 years ago|reply
That's a really nice Randian narrative you've got there, but the reality is that we're trapped in a demand-limited economic state and it's slowly getting worse. At some point you have to stop coddling the wealthy with more and more handouts, and undo the damage.
[+] chjohasbrouck|9 years ago|reply
Another interesting way to look at this is to look at what level of income equality people are advocating for, on a macro scale.

Most people making arguments against income inequality in the US seem to want income to be more equal down to and including themselves, but never very far below themselves. They want it to be equal within the US, but I have a hard time believing they'd be as excited to extend that same income equality worldwide. Doing so would see even the poorest Americans taking a massive cut in lifestyle and living at a level of poverty most people in this country have never seen or experienced.

[+] greydius|9 years ago|reply
People do like free shit. This is why the wealthy like being wealthy. They get to live comfortable lives while their money earns them more money.
[+] BeetleB|9 years ago|reply
Your comment seems to imply that the people in favor of income redistribution are the ones that think that way.

But so do those who are against redistribution. I've yet to meet a person who was against redistribution, as well as against certain benefits they get from tax money (police force, etc).

Taxpayer provided services is income redistribution. Some people's incomes are being used to provide other people services.

Everyone wants free shit. That's why your comment is a bit of a non-statement. It's similar to saying "Everyone likes food". Or "Everyone likes money." It doesn't explain anything.

[+] ArkyBeagle|9 years ago|reply
"People like free shit" is puerile. Most people don't steal. It's quite a jump to go from being basically honest to being a thief.

I think that "tax rents" is the method whereby this can be done, if it can be done at all.

[+] Eridrus|9 years ago|reply
I think it's an interesting theory, but I don't find myself very convinced.

Competing hypothesis: People's motivations are less driven by self-interest when the discussion is an abstract one and more driven by self-interest when there are real losses and gains to be had. It still has a self-interest component, but now the claim is that it is those who do not want redistribution acting out of self interest. Self-interest is clearly a component here, but singling it out as a motivation for wanting redistribution makes for certain specific arguments.

I'm also not sure how transferable the results around distribution in a game are for questions with societal implications; I know these sorts of experiments are common in psychology, but I wonder if the limited scope of this game means people are more willing to take everything they've earned since many of the reasons to support redistribution do not exist in a game setting, e.g. real suffering, not wanting violent revolution, etc.

[+] n-exploit|9 years ago|reply
I'd be interested in seeing a study on the distribution of philanthropic efforts among the wealthy between domestic and international causes.

I fall on the side of wanting the government "out of my pockets" because I question the overall effectiveness of domestic programmes in helping "the poor". I may be ignorant, but like to think that international causes do a better job of decreasing wealth inequality by supporting those at the very lowest end of the spectrum in third world countries. Call me an asshole, but understanding that no system is perfect, because America has one of the better social/government systems in favor of economic mobility, government use of taxpayer dollars for domestic programs targeting income redistribution should be limited. While I do think that there are worthwhile programmes that support the poor domestically, my position on income redistribution can be more easily understood when looking at wealth inequality at a global scale.

[+] jellicle|9 years ago|reply
The current economic system is heavily redistributive. It works very strongly to redistribute wealth and income from those who have little to those who have a lot. The main function of two whole branches of government is maintaining the wealth of people who have a lot.

What people are advocating for is less income redistribution to the top.

It is worth noting that if you ask the public how wealth is distributed currently, and how it should be, the U.S. public desires a sort of socialist utopia, more equal than Sweden: http://www.people.hbs.edu/mnorton/norton%20ariely.pdf

Note that people prefer that socialist utopia regardless of their personal wealth and regardless of their political orientation. EVERYONE prefers that. There is complete Democrat-Republican rich-poor consensus that the United States would be better off if it were much more equal.

In the U.S. at least, and probably elsewhere, most of the opposition to social welfare policies is rooted in racism. The best way to derail any proposed social welfare idea is to talk about all the black people that will be helped by it. This opposition has nothing do with how the individual will be affected by the proposed policies in a monetary sense.

[+] andrewclunn|9 years ago|reply
Needs a follow up where people are playing for their whole families and the ones making less for some reason have more kids. In other words, trying to extrapolate from this to larger societal class conflicts misses a whole slew of other issues.
[+] Mendenhall|9 years ago|reply
So in earnings known and earnings unknown, both groups predominately looked after their own self interests. Thats always the predominate factor in groups.
[+] grb423|9 years ago|reply
If I get a check for X and my cardiologist gets a check for X as well why would anyone put in the work to become a cardiologist? For his love of mankind? For social status? Serious question. Didn't the 20th-century Marxists try this?
[+] AnimalMuppet|9 years ago|reply
You get a check for X. The cardiologist gets a check for X, and also gets the income from working as a cardiologist. He/she then pays taxes on that income, which leaves him/her on net probably at least somewhat worse off than today, but still better off than you, who only get a check for X. It's that "better off" part that motivates the cardiologist.
[+] undersuit|9 years ago|reply
Because there is a good chance that X is going to be less than what either you or the cardiologist already make, but it may be more than what a janitor does make. So the cardiologist and you keep working, and the janitor has an incentive to quit performing a mindless job... and maybe become a cardiologist.
[+] chickenfries|9 years ago|reply
What is this "Majority of calls" you refer to in the title? Why not use the title of the paper?

If anything, they found that calls against redistribution of income are most likely motivated by self interest.

[+] sctb|9 years ago|reply
We updated the title from “Majority of calls for income redistribution are motivated by self-interest”, which was editorialized.
[+] randcraw|9 years ago|reply
I was going to make the same observation. But I see the headline has been changed, so now the point is moot.