Given that all property rights are a creation of the state, is it possible to refer to “redistribution” without reifying a notion of “everyday libertarianism”? I believe so.
However, Matt Bruenig, over at our neighbors Demos, disagrees, and is slowly picking off liberal wonks on this topic. Given that I’m likely on the kill list, I might as well play offense. This post is probably not of interest to general readers.
Bruenig argues that instead of redistribution, we “have in front of us a huge variety of potential economic institutional sets that we must pick from. Each set of economic institutions generates its own unique distributive outcome.” Pulling from a previous post, he states that “every single institutional choice that is made surrounding the economy sets the stage for the distribution that results...The cocktail of institutional choices you make dictates the distribution that follows.”
As I read him, Bruenig is meant not to be dealing with matters of justice (i.e. “this distribution of income is unjust”) but instead arguing that there’s no other way for this to be (i.e. “it’s impossible for the state not to create the distribution of income”). This argument, following the Myth of Ownership, is often deployed against the topic of horizontal equity in taxation, arguing that the goal of preserving pre-tax income is a fundamentally incoherent idea. (People in favor of funding all higher-education through income-based repayments from students often rely heavily on such claims to horizontal equity.)
Though relevant for tax policy, this argument becomes more problematic for social insurance. Because even though the distribution of income is created by the state through property rights , social insurance itself is then created through said distribution.
It also blurs different ways in which we mean the state to be creating the distribution. It might be better to start this argument not by talking about property, which can put people at the edge of their seats, but instead sports. We’ll use basketball, but you can fill in your own. There are two ways in which the referees determine the distribution of points.
The first is in the creation of the rules themselves. If the three point line became a six point line it would benefit players and teams with better outside shooting relative to those who play close to the net. If the length of the game was doubled it would benefit endurance players versus those who can score quickly. If fouls were called more or less aggressively that would benefit those playing certain strategies against others. And so on.
It quickly becomes clear that the rules of the game are not neutral, and they can have significant impact on the distribution of points, making winners into losers with just minor twists. This is where much of the liberal policy conversation takes place, with people like Ed Miliband saying things like “Markets don’t just drop down from outer space, perfectly formed.”
Here it is completely clear we can speak of “redistribution” of points. Because referees set the rules doesn’t mean they pick the score. One sees a tension in this argument - from the Bruenig quote, above sometimes the state “sets the stage for the distribution” while other times it “dictates the distribution that follows.” So even after setting the rules, we may want to wall off certain distributional outcomes. We can say that the leader should never be more than 20 points ahead of the loser at any time, for instance.
There’s a second, deeper, sense here, and that is that all the points are created and justified by the referees. If someone does a slam dunk, they may say “that was easily worth four points.” Their opponents might retort “no way, it’s only worth one point.” The referee is the one that everyone looks to for the correct score, where he’d say “it’s two points.” However, if the referee calls a penalty on that slam dunk, then those points simply do not appear. At any given moment we can’t refer to the score without justifying it based on what the referee is saying it is.
However, there are two reasons redistribution is still a coherent concept here. That it is absolutely true that any specific distribution of points are created by referees does not mean that that the referees pick whatever distribution they want. Thus they can think of a distribution they create, and have institution responses to move from one distribution to another that operate in a second-order manner. This second-order is what puts the “re” in “redistribution.”
And to move back to the world of public policy and property, this is especially true as the social insurance state dialectically creates itself through engagement with a market distribution and set of prices that was already being created by the government. Various goals like “prevent sudden drops in income” or “provide a certain replacement level of income in old age” or “ensure that food costs are less than a quarter of a family’s budget” or “have the government pay the costs of health insurance and public education” all require a set of market distributions and prices already present to carry out.
To take two specific examples, something like “a universal basic income that prevents poverty” requires a definition of poverty that will need to be drawn from an already existing distribution of market prices. The example that started this discussion, Social Security, is predicated on a replacement rate of market incomes, making any reference to social insurance here impossible without referencing a market distribution.
So yes, when discussing social insurance one needs to have some set of distribution already in play in order to shift it around. That the pre-tax distribution of income is arbitrary and could be done differently doesn’t preclude its existence, and that a set of institutions is put into place to change said income shouldn’t just be folded under the term “distribution.”
 It’s worth noting that we have been talking about property rights, instead of property claims. Taking a point from Jeffrey Winters’ Oligarchy, we should distinguish between property claims and property rights. Like all property, both are secured by violence and coercion. However, property claims are secured personally against the community; property rights are enforced impersonally by (or in the name of) the community.
Because the strong form of the argument that all property is ultimately created by and enforced by the state is wrong. We can imagine a situation much like our world - let’s call this distribution A. Someone named Adam in our world A decides he’ll go out and purchase some illegal drugs, hire a person to perform illegal acts of an adult nature, purchase one of those illegal DVDs of new movies recorded on a handheld cam you always see people selling in cities, and, to top it off, hire someone off-the-books to clean his house for less than minimum wage. Let’s refer to this new distribution as A’.
Perhaps you hope Adam will repent and fix his life, or perhaps you want to party with him. But either way, the new difference in distribution between A’ and A can’t be defended by claims to the state. (It’s not only not constructed by the state, but the state seeks to crush those claims.) If something goes wrong, if Adam is robbed for instance, he can’t rely on an impartial state to adjudicate these disputes. He has to rely on personalized claims to property in a world where the violence in property isn’t centralized in an abstraction and the rules aren’t codified in advance.
And, as economists of the commons like Elinor Ostrom have found, if we don’t put private property rights into everything we don’t descend into chaos. Norms adjust, though it’s hard imagining a capitalist economy running on such things. (Property rights are far more important when wealth is held outside of land and natural resource claims, and instead in capitalist ownership abstractions like “corporations.”) One could turn around and call this new set of customs for adjudicating property claims “the state,” which is fine as far as it goes, but it doesn’t have the same type of elements that modern property rights have.
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