Here's What People Who Want To Hike Our Taxes And Redistribute Our Money Don't Get About Fairness

In the WSJ Jonah Lehrer discusses a bizarre ‘behavioural economics’ type experiment that to him suggests people like taxes:

The study began with 40 subjects blindly picking ping-pong balls from a hat. Half of the balls were labelled “rich,” while the other half were labelled “poor.” The rich subjects were immediately given $50, while the poor got nothing. Such is life: It’s rarely fair.

When people in the “rich” group were told that a poor stranger was given $20, their brains showed more reward activity than when they themselves were given an equivalent amount. In other words, they got extra pleasure from the gains of someone with less.

If life’s rewards were primarily arbitrary I agree that people would would be in favour of higher taxes. Success in life is a combination of luck, effort, and ability. One big difference between Conservatives and Liberals is relative weighting they see on luck and effort in our lives.

The Rawlsian Theory of Justice starts from the presumption that social status, intelligence, strength, even ambition, is exogenous, so rewards are all the luck of the draw. In that case, massive egalitarian redistribution would be preferred.

The problem, as Robert Nozick pointed out, is that people have preferences, and willingly pay to watch star athletes, or buy specific products (iPads), which then skew the distribution of income. To take away the rewards to such people and products will mean these services and products do not exist, which is a worse state of affairs, as demonstrated by people’s willingness to pay for these things in the initial state. Virtue and vice are basically defined by their statistical results to the actor, so these payoffs are not incidental but rather intrinsically related to what is called good and bad behaviour.

Nozick assumes effort is a function of reward; Rawls that painters, athletes, and inventors will be relatively unmoved by taxes and subsidies.

People like fairness, but this means different things depending on how rewards are created. It is fair to redistribute random bounties, not fair to redistribute wealth that motivated its creation. While one might think that if they had a mechanism to distinguish the two and tax accordingly this would be an improvement, the fact is taxes and state fees are created via a collective mechanism that is more about fortifying coalitions via patronage jobs on the one end and barriers to entry on the other. Thus, it is fairer in the real world to minimize the state Leviathon so these truly arbitrary allocations are minimized. For example, I’m sure many unskilled workers would prefer to have jobs at the Post Office, but these positions are primarily distributed independent of ability and effort.


This post previously appeared at Falkenblog >

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