Writing for Forbes Jeffrey Dorfman argues that the only two positions that make sense are communism or no redistribution of wealth at all. He says:
. . . how is a society supposed to decide what is “fair” as far as income redistribution goes? This is a question both difficult and simple. Logic suggests that you can only defend two possible answers: we should do no income redistribution or we should redistribute income until such time as everybody is left with exactly the same amount of money (essentially communism). While almost everyone wants the answer to be somewhere in the middle, it makes no sense to stop there once you start.
It makes no sense to lay out two alternatives and without argument declare that those are the only logical alternatives. The notion that if some distribution is good more distribution is better very far from a logical axiom or self evident truth. Some water is good but too much water will kill you. And the same it true for food and oxygen and pretty much everything else I can think of. Why in God’s name would it be the case that if some redistribution is good then more redistribution, or communism, is better?
Professor Dorfman, it actually makes a lot of sense to stop at some point once you start. You mention John Rawls in your article but fail grasp Rawls’ most basic argument. So, here is a very brief overview:
Rawls argues that the principles of justice are those that would be chosen in a veil of ignorance. The veil of ignorance is a situation in which we know nothing about ourselves including race, gender, socio-economic status, psychological disposition, religious beliefs, sexual orientation, etc. Under the veil of ignorance what laws would we choose? Rawls says that we would choose an equal distribution of social primary goods and that we would allow inequality as long as that inequality benefitted all persons. The key notion is that because we don’t know where we are in the socio-economic scheme of things we would choose laws that would create economic distributions that would benefit us no matter where we are in the distribution.
The reason a person wouldn’t chose pure communism or pure capitalism in the original position is because both pure communism and pure capitalism have a significant chance of leaving a person less well-off than capitalism with redistribution of wealth. We wouldn’t choose communism because in practice it doesn’t work to benefit everyone.
Capitalism with redistribution offers the greatest benefits to the most people, which means it really does make sense to stop somewhere in the middle.
If the country’s social welfare is increased by income redistribution, the logical conclusion is that it would be increased more if we kept on redistributing the income until everybody was left with the exact same amount of money. Otherwise, there are still people with more and those people will be getting less benefit from their money than a poorer person could if we would only redistribute it.
Rawls’ point is that capitalism and inequality actually increase social welfare as long as there is some measure of redistribution. Rawls doesn’t argue against inequality but rather inequality that does not benefit all persons.
At what point do you know you have enough redistribution? The point at which social welfare is not increased, and this point would happen far short of a purely equal distribution.
Our current system is far from “arbitrary” or “philosophically incoherent” as you say. It represents an intuitive grasp of the basic principles of social contract theory that most people naturally grasp as fair.
By contrast the two positions you suggest as being coherent are actually the ones that are philosophically problematic. There are no good philosophical arguments for libertarianism or communism. But there are very good arguments for a reasonably regulated “free market” with significant redistribution of wealth.
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