Stumbling and Mumbling

Redistribution

chris dillow
Publish date: Tue, 08 Oct 2013, 02:04 PM
chris dillow
0 2,773
An extremist, not a fanatic

We tend to think that the left supports redistribution of wealth and income whilst the "right" - classical liberals if not David Cameron - opposes it. This is not true. Many rightists favour redistribution, and not merely to bankers and bosses, simply because pretty much any policy intervention is redistributive.

I'm prompted to say this by the launch of the much-derided Help to Buy scheme. This redistributes wealth from future home-owners - who'll buy at a higher price - to present-day ones,who'll see their house prices rise.

Similarly, the proposed tax break for married couples is redistributive. For a given level of tax, it means higher taxes on singletons. We could justifiably call the married tax allowance a tax on widows.

To take a different example, HS2 - if it goes ahead - will also redistribute wealth. It means higher wealth for those who own houses in those areas that benefit from better transport links, and lower wealth for home-owners who suffer noise and less pleasant country views.

Or take planning regulations. A relaxation of planning laws to permit easier housebuilding would redistribute away from nimbys towards housebuilding companies and would-be home-owners who could more easily afford to buy.

I don't say all this to support or oppose such policies - merely to note that they are redistributive.

Now, libertarians might object that such redistributions are the effect of meddlesome government. In their ideal polity, we'd simply have secure property rights and no redistribution. I'm not sure. In a minimal state, we'd still have technical change. And this itself creates de facto rights. For example, in the 19th century mid-west, the invention of barbed wire (pdf) allowed land-owners to enclose large areas, thus strengthening their property rights. In the 21st century, file-sharing gives young people the idea that they have a right to free music. Faced with such technical change, even a libertarian state would have to choose how to allocate new rights - for example, the right to shared files versus the right to protect one's intellectual property. However it chooses, there's redistribution.

I say this to endorse Frances' claim; governments don't "defend" property rights but create them.

But there's another point. It's that the political question cannot be: redistribution or not? This is because government is inherently redistributive - though I'll concede that this is more true of actually-existing governments than libertarian fantasies. Instead, the questions are: between whom should governments redistribute, and how? The principle that governments should redistribute has long been conceded.

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