I like my redistribution with a side of toast

How do you like your redistribution? Prof. Kenworthy thinks there should be policy that would make more equal growth rates among people at the expense of potentially reducing those growth rates across the board.

“Why would anyone want such a policy?” I asked at his blog to which the deafening sound of crickets was the only reply. So maybe I’ll try it here:

But suppose we grant the professor his conclusion, suppose everyone is getting richer but the rich much more so. Is this really a problem? Does it make sense to enact policy (e.g. higher taxes on the rich) that makes more equal growth rates of incomes across income classes but runs the risk of reducing everyone’s income growth rates? What model of human behavior justifies this policy trade off?

Maybe an example will help. Suppose under current policy, my neighbor’s income increases by 25% every year and mine only goes up 10% per year. Now suppose there was a policy that would decrease my growth rate to 5% a year and his to 10% a year. The new policy would make growth rates more equal, but reduce everyone’s growth rates. Should I support that policy? Why?

Would anyone support this policy? Does your answer change if instead of neighbors we’re talking about adjoining cities? states? countries?

Is this just Haidt’s liberal’s fairness running amuck? If so, shouldn’t we mock it like we mocked those silly conservatives’ disgust at gays and empowered women?

One Response to “I like my redistribution with a side of toast”

  • swong says:

    The thing that always seems to be missing from those productivity growth charts is technology improvements. Americans put in a few more hours than they used to, sure, but the tools are so much better.

    What do economists think about income inequality? I can think of a few objections that wade into political or sociological waters, but not much in pure economic terms. “Just ‘cuz it’s more fair” doesn’t seem like a very strong argument.