class-oreinted redistribution

[lemur]

The following quote is from Swansont's blog:

f you add up all the lines of income over $200,000, you get around $2 trillion. (I may be off, because I’m eyeballing it, but I’m not off by much.) That obviously far exceeds the nearly $1.4 trillion accruing to the $100-200,000 set. And it undermines rather than bolsters (though does not disprove) Reihan’s argument that “the collective political influence of the upper-middle-class is greater than that of the ultra-rich.”

To what extent should income-classes be treated as collectively powerful? It is popular to view the highest income-classes as a resource for redistributive economics, but if there is more economic power distributed among lower classes, doesn't it make more sense to redistribute from those instead of the wealthier/wealthiest?

[Marat]

Obviously people experience their wealth or poverty, and exercise their capacity for political influence, as individuals rather than as members of a class. Thus the whole point of the redistribution of wealth is to ensure that society achieves the greatest good for the greatest number by distributing it so that the most vital basic needs of each person are fulfilled before any demands for luxury are met. The reason for this is simple: Answering the most basic human needs produces vastly more happiness per dollar spent than does satisfying the demand for luxuries, so if we truly care about other humans and regard the need of all people for happiness as equal, we have to use the available resources to produce the greatest happiness for the greatest number by answering basic needs prior to luxuries.

 

Class influence similarly has to be measured per capita rather than by the total capital available to the class. Thus a massive army of people living at the subsistence level, who have to spend all their available time and energy scratching to eke out a living, have neither the surplus time nor the extra money to exercise any political influence at all, no matter how much time and money their entire class has in sum. In contrast, each wealthy individual can satisfy his own basic needs with less than 1% of his time and money, so he has the remaining 99% plus left over for political influence. Bill Gates, Warren Buffet, and various other billionaires are invited to the White House to give their advice, but the poor and the middle class are not.

[lemur]

In terms of creating the greatest good for the greatest number of people, I think more good would be created by redistributing from the largest class, the middle class, to poorer people. This would have the effect of causing middle class people to consume less, which would reduce scarcity thus making more goods and services available for everyone else. People who would be classified as above middle class may be consuming more luxuries but the amount of productive labor and resources they are utilizing is not that significant compared to the amount consumed by the middle class. How many labor hours and materials does it take to build a yacht, for example, compared to how much it takes for every middle-class individual of driving age to have their own car? What's more, every poor person looks at the middle class as their goal for how they wish to live, so if every poor person also wants a car and sufficient gas to drive around and do all the things they want, the overall effect of both classes would leave a much larger footprint (resource AND labor) than does an elite class of super-rich building a few giant mansions and having some yachts and expensive artwork.

[Marat]

I think the problem remains that we cannot really achieve the greatest good for the greatest number -- which equal respect for all humans seems to require -- unless we distribute the sum total of social wealth so as to serve more fundamental interests prior to less fundamental interests, which means transferring wealth from the rich to the poor. For example, a multi-millionaire like Jay Leno enjoys cars and motorcycles, and he has a collection of dozens of extremely rare and expensive vehicles, each costing say about $100,000. If he were to have to cash in one of these, his loss of human pleasure at that loss would represent a miniscule fraction of what he actually has the capacity to enjoy, yet with that money two deserving poor children who would otherwise miss the chance of a university education could be educated, developed, and given the possibility of a meaningful career. Obviously this redistribution would multiply the value of the wealth tied up in a single car for someone with dozens of them -- a very small value -- by a huge factor, so the new wealth distribution would represent much greater social respect for the equal entitlement of all people for happiness. All the more so if this money were used to save children from starving to death in Africa.

 

In contrast, if you took the same amount of wealth, $100,000, from a middle-class family to buy the chance of a university education for two poor children who would otherwise not have it, you would create crushing misery for the middle-class family to spare the poor family the total devastation of having two children denied a good education. So the difference between the loss to those from whom the wealth was redistributed and the gain to those to whom it was redistributed would be very much less than in the case of redistribution from the wealthy, so it would not make the best use of the resources available and would simply be irrational, as well as immoral in its failure to respect the equal claim of all people to happiness.