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Book Review: The Ethics of Redistribution

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The Ethics of Redistribution by Bertrand de Jouvenel (Indianapolis: Liberty press, 1990) 118 pp.; $12 (h);$5 (p).

In the 20th century, governments increasingly have become great engines for the redistribution of wealth. Indeed, most of the activity of modern governments centers around taking from some and giving to others, regardless of whether or not those from whom the wealth is being taken wish it to occur. This has caused numerous economic side effects, not the least of which are tax evasion and avoidance. But it has also long been a key argument against such policies that higher and higher rates of taxation for wealth redistribution create significant disincentives to work, save and invest on the part of the productive members of the society. Why should I produce, or produce as much as I could, the argument goes, if I am not allowed to keep the fruits of my own labor?

The debate has, therefore, often been couched in terms of “equality vs. efficiency” and the optimal trade-off between these two goals. Almost forty years ago, the French political philosopher, Bertrand de Jouvenel, decided to ask some important questions. Suppose that income redistribution had no disincentive effects on people’s productive activities. Under those circumstances, would income equality through income redistribution be a desirable goal? Would there be an argument against it? His answers are offered in his book, The Ethics Of Redistribution, originally published in 1951, and, after being unavailable for many Years, recently reprinted by Liberty Fund of Indianapolis.

In principle, redistribution should be a simple matter. A decision is made concerning what is “an essential minimum” of income; then another decision is made concerning what is a “reasonable maximum” of income; and then the redistribution is put into effect. As de Jouvenel points out, however, the ideas of a “minimum” and a “maximum,” far from being objective concepts, are instead quite slippery notions.

Moreover, the proponents of income redistribution have always been too optimistic about the amount of “excessive wealth” available for such purposes. Inevitably, it has been found that the “maximum” has to be lowered more and more into the income brackets of the middle class to assure the “minimum” to be redistributed to the “needy.”

But this is still not the core problem with income redistribution, according to de Jouvenel. Income is not merely a means for physical maintenance of oneself and one’s family plus a few dollars for leisure activities. What we do with our income is an expression of ourselves, a statement about what we value, how we see ourselves, and what we wish and hope to be. And the way we use our income enables us to teach future generations about those things which are considered worthwhile in life. Income acquired above some notion of a “minimum” is also the way individuals have had the means to perform many activities “for free” that are considered the foundation of the social order, from community and church work, to support for the arts and humanities.

Deny an individual the honest income the has earned, even when it is above some hypothetically “reasonable maximum,” and you deny him the ability to formulate, and give expression to, his own purpose as a human being. And you deny him the capacity to make his voluntary contribution to the civilization and society in which he lives, as he sees best.

De Jouvenel argues that such contributions have been, and remain essential for a good society. This is demonstrated, he shows, by the common belief of most of those who advocate redistribution: since most people will no longer have the “independent means” to perform such social services and activities, the state must now perform them.

And there is a strong elitist element among redistribution advocates. They do not trust “the poor” to have the intelligence or wisdom to spend their income in “socially desirable ways.” The poor prefer to spend their money on beer rather than Beethoven. So, the state takes over that responsibility for them.

And it is in this that de Jouvenel sees the real significance of redistributional policies. What is redistributed is not wealth from the rich to the poor, but power from the people to the state. Individuals no longer plan their own lives, and use their own money, to fulfill those plans. Individuals no longer care for their own children, teach them how to live as human beings or guide them as to what to value and pursue in life. In terms of time, income and talent, individuals are now reluctant to contribute themselves to the society in which they live.

No, these are now in the hands of the state because, through taxation, the state has denied individuals the capacity to do them. The state plans our lives, cares for our children, and decides what should be supported in society as socially desirable and to what extent.

And as the state grows stronger, the individual grows weaker. We become weaker, not only in relation to the state, but also as human beings because we no longer exercise those qualities and habits of mind that only self-responsibility teaches and makes possible.

 

 

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    Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).