> The benefits that increased growth will bring to future people are far greater than the benefits that redistribution brings to present people.
I guess if economic growth in the present affects the welfare of people in the future, it isn't obvious to me that the function of present-day growth to future welfare over time is linear, or continues to be very linear as time goes on?
It seems right to say that decreased growth would deprive some people of benefits for some amount of time, and so the expected utility of decreasing growth would be somewhere in the negative. But all sorts of things can happen in history (innovations, catastrophes etc) that just wash out the effects of whatever was happening in previous periods. IE the 1790's were a period of slow economic growth in most of the world, but that didn't have much obvious bearing on people's welfare after the industrial revolution. Slowed economic growth doesn't seem to linearly decrease the welfare of future generations as time goes on. Furthermore, we might just hit an upper limit of economic growth and welfare. Or we might hit the lower limit, if some X-risk gets us. In either of those cases, a little slow growth in 2020's would end up not mattering much.
Maybe this is missing something of what you're saying, but otherwise, it's not clear to me why we should think that the expected future value of increased growth in the present is so great that it would override the obvious utility of redistribution.
And even if redistribution to the poor today were slightly negative for growth, the poor ot the future will still be vastly richer than today's poor, so how much should today's poor forgo so that the poor of the future can be richer? This is just the marginal utility of income argument again, this time intertemporally.
I think the strongest argument is that most redistribution schemes are NOT financed from consumption taxes, but by high deadweight loss taxes. This sort of supported by the observation that people who oppose redistribution typically oppose the move to lower deadweight loss taxes like progressive consumption tax, VAT and taxation of net emissions of CO2.
"We should expect taxes on labor income and capital to reduce the supply of labor and capital, just as we should expect taxes on carbon emissions to reduce the supply of carbon emissions."
Correct, so we should fund redistribution with taxes on consumption, a VAT for "horizontal" distribution -- from the currently well to the currently ill, the currently employed to the currently unemployed, from the currently w/o children to the currently with children, from the current young to the currently old -- and a progressive consumption tax for "vertical" redistribution from "the rich" to "the poor."
Chris, I am currently working on an essay about redistribution, so this is timely. I do not have all the answers, but I love the shout-out for Land Value Tax. I might also include a Distributed Profits in the running, as both capture “rents” and should not depress economic growth.
Together, these can raise significant revenue, the question becomes then…how to appropriately distribute it?
The best way to juice economic growth would be to pay smart people to have kids and maybe free IVF.
There are only two types of defensible redistributions.
1) Really “social investments” rather then redistribution.
2) Buying political stability can have good ROI.
Of course one could easily argue that social investments today mostly have bad ROI and that welfare dependence increases rather then decreases political stability. But these are arguments, these things could at least in theory be true.
This also solves one of the issues with immigration*, namely that it increases rather than decreases political stability. Citizens have to be bought off for political reasons, foreigners do not.
*immigration is horribly wealth destructive. You are transferring people from an area where they aren’t entitled to first world welfare to one where they are.
The issue is not what immigrants are "eligible" for but what actually happens. Do they (and there ought to be selection of who "they" are) produce more in their new residence than they consume? Why would that NOT be true?
2) Everything they consume costs more. Someone can make more as a street sweeper in Manhattan, but they also have to pay Manhattan rent. They consume Manhattan healthcare (paid for by government, their wages don't cover it, etc).
3) If they are more productive only by using first world capital then they are dividing the capital base and not replenishing it. For instance first world infrastructure. Being able to ride the bus into the city can make them more productive, but they didn't build that bridge. Their use wears it down, and their presence increases congestion and wastes the time of more productive people trying to use the bridge. Given they are a net tax liability, they are going to do nothing to replenish the capital stock of the bridge. Their "productivity" should be seen more as a canabilization of capital created by others.
> The benefits that increased growth will bring to future people are far greater than the benefits that redistribution brings to present people.
I guess if economic growth in the present affects the welfare of people in the future, it isn't obvious to me that the function of present-day growth to future welfare over time is linear, or continues to be very linear as time goes on?
It seems right to say that decreased growth would deprive some people of benefits for some amount of time, and so the expected utility of decreasing growth would be somewhere in the negative. But all sorts of things can happen in history (innovations, catastrophes etc) that just wash out the effects of whatever was happening in previous periods. IE the 1790's were a period of slow economic growth in most of the world, but that didn't have much obvious bearing on people's welfare after the industrial revolution. Slowed economic growth doesn't seem to linearly decrease the welfare of future generations as time goes on. Furthermore, we might just hit an upper limit of economic growth and welfare. Or we might hit the lower limit, if some X-risk gets us. In either of those cases, a little slow growth in 2020's would end up not mattering much.
Maybe this is missing something of what you're saying, but otherwise, it's not clear to me why we should think that the expected future value of increased growth in the present is so great that it would override the obvious utility of redistribution.
And even if redistribution to the poor today were slightly negative for growth, the poor ot the future will still be vastly richer than today's poor, so how much should today's poor forgo so that the poor of the future can be richer? This is just the marginal utility of income argument again, this time intertemporally.
I think the strongest argument is that most redistribution schemes are NOT financed from consumption taxes, but by high deadweight loss taxes. This sort of supported by the observation that people who oppose redistribution typically oppose the move to lower deadweight loss taxes like progressive consumption tax, VAT and taxation of net emissions of CO2.
I agree about immigration. It is win-win for immigrants and residents. Yet few Libertarians prioritize it.
"We should expect taxes on labor income and capital to reduce the supply of labor and capital, just as we should expect taxes on carbon emissions to reduce the supply of carbon emissions."
Correct, so we should fund redistribution with taxes on consumption, a VAT for "horizontal" distribution -- from the currently well to the currently ill, the currently employed to the currently unemployed, from the currently w/o children to the currently with children, from the current young to the currently old -- and a progressive consumption tax for "vertical" redistribution from "the rich" to "the poor."
What arguments could libertarian consequentialists employ against redistribution in a world with fully open borders--or better, in a world state?
Chris, I am currently working on an essay about redistribution, so this is timely. I do not have all the answers, but I love the shout-out for Land Value Tax. I might also include a Distributed Profits in the running, as both capture “rents” and should not depress economic growth.
Together, these can raise significant revenue, the question becomes then…how to appropriately distribute it?
The best way to juice economic growth would be to pay smart people to have kids and maybe free IVF.
There are only two types of defensible redistributions.
1) Really “social investments” rather then redistribution.
2) Buying political stability can have good ROI.
Of course one could easily argue that social investments today mostly have bad ROI and that welfare dependence increases rather then decreases political stability. But these are arguments, these things could at least in theory be true.
This also solves one of the issues with immigration*, namely that it increases rather than decreases political stability. Citizens have to be bought off for political reasons, foreigners do not.
*immigration is horribly wealth destructive. You are transferring people from an area where they aren’t entitled to first world welfare to one where they are.
The issue is not what immigrants are "eligible" for but what actually happens. Do they (and there ought to be selection of who "they" are) produce more in their new residence than they consume? Why would that NOT be true?
"Why would that NOT be true?"
1) They are the same people. They didn't change.
2) Everything they consume costs more. Someone can make more as a street sweeper in Manhattan, but they also have to pay Manhattan rent. They consume Manhattan healthcare (paid for by government, their wages don't cover it, etc).
3) If they are more productive only by using first world capital then they are dividing the capital base and not replenishing it. For instance first world infrastructure. Being able to ride the bus into the city can make them more productive, but they didn't build that bridge. Their use wears it down, and their presence increases congestion and wastes the time of more productive people trying to use the bridge. Given they are a net tax liability, they are going to do nothing to replenish the capital stock of the bridge. Their "productivity" should be seen more as a canabilization of capital created by others.