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February 14, 2005



Redistribution is a very crude omnium-gatherum concept. In particular, I don't think it captures the different feelings that the distributed-against will often have about the purposes to which the looted money is put. If you tax me and use that money in some efficient way to provide a good education for a child from a poor home, my reaction will be very different from my reaction to your taxing me and spending the proceeds on pointless bureaucracy or,indeed, on lousy schools.


What he said - another classic is tackling pensioner poverty versus general poverty. Most people (Randians aside) are more than willing to tackle many particular social ills through redistribution, but the constituency for generalised egalitarianism is much more limited.

Anyway Chris - I'm with you all the way on the analysis. As I've doubtless said many times before, if the Left (saying this as an outsider, but a friendly one) is to have a future it must get over its fetishisation of the welfare state. All this stuff should be grounds for consensus these days - we can fight over how much and where to redistribute (vs. how much to spend on defence, etc) when we've cleared away the accumulated gunk of public 'services'.


Consider other examples of government increasing inequality. Take the common agricultural policy (CAP) in Europe and similar schemes in other rich countries. In at least three ways this policy of protectionism and subsidies redistributes income from the poor to the rich, thus increasing poverty:

1. Between farm households and non-farm households: average farm household incomes in rich countries are higher than average household incomes. The opposite holds in developing countries. The CAP makes farmers in devoloped countries richer than average, in poor countries it makes farmers poorer.

2. Within the group of farmers in rich countries. Most aid goes to the largest and wealthiest farmers.

3. Between farmers in rich countries and farmers in poor countries, by depressing world prices and demand for agricultural products of poor countries.


Thanks for responding, Chris. I think we're more in agreement now - I would say that there *can be* and frequently *is* a trade-off between big government and redistribution - though, as you say, the government *could* raise both taxes and benefits. Your example of abolishing DTI and CAP and raising benefits with the proceeds is a good example of such a trade-off, and one I'd love to see. But some people seem to see benefits in particular as the key measure of how 'big' government is, so they might not agree that government has really got smaller in that case.

Robert Schwartz

"Progressive" taxes and incomes policies have been in place in most European and North American countries for a century or more now. It should not be very surprising that they have had almost no impact on the distribution of wealth nor income in these societies, as there was no reason to believe that they would, if there was any ability to change the prices of labor and goods.

More draconian measures were tried in the Soviet Union with very unsatisfactory results.

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