Fair enough?
Charlotte Cavaillé
With rising global income inequality, Charlotte Cavaillé asks why society isn’t doing more to redistribute income.
Cavaillé, assistant professor of public policy at the Ford School of Public Policy, challenges the assumptions about how we think about inequality-reducing policies.
“There are important distinctions between policies that affect how much people earn, like taxes or salary caps, and those that use pooled resources to cover high-risk individuals irrespective of their contributions,” she says.
Cavaillé, who examines the dynamics of popular attitudes toward redistributive social policies at a time of rising inequality, high fiscal stress, and high levels of immigration, broke down the politics of redistribution in a recent episode of “Scope Conditions,” a comparative politics podcast.
The economics of human behavior
To understand why rising inequality does not equate to support for redistribution policies, Cavaillé says we must draw on behavioral economics to understand “the type of glasses that we wear to interpret the world.”
Cavaillé finds in addition to the classical economic assumption that people are fundamentally self-interested income maximizers, people also have an extremely strong sense of fairness.
In the context of redistribution, that leads her to two questions: “How fair is it for some to make more money than others in the marketplace?” and “How fair is it for some to receive more in social benefits than they pay in taxes?”
Still, Cavaillé contends it is not just about taking from the rich and giving to the poor. How people answer the first question shapes how much they want to take from the rich, and how they answer the second shapes how much they want to give to the poor.
When considering the fairness of policies that take from the rich (progressive taxation) depends on whether one thinks the rich deserve their income.
“They are more likely to think that they do if they believe that income differences are proportional to effort and talent,” she says. “Willingness to support taxing the rich is a function of whether or not one sees the economic system as fair.”
Perception is reality
But with policies that give to the poor (social insurance, welfare, or access to health care irrespective of ability to pay), a person’s concept of fairness is shaped by the perceptions that the poor are deserving and neither free-riding nor trying to take advantage of the benefit system.
“Willingness to support social insurance policies is a function of whether or not you think that the poor are people that you can trust, that you owe social solidarity to, or they are people that you cannot trust because they are free riders or they just don’t belong,” she says. “The interesting finding is that people who find the rich deserving of taxation do not necessarily find the poor deserving of transfers.”
Education and income are important factors that shape perspectives on fairness.
Those with high incomes and high education levels are more likely to be “economic winners,” who see the system as fair and thus have more negative attitudes toward taxation policies that redistribute income.
Trust that poor people are not gaming the system is higher among highly educated people, who hold what social scientists call “liberal moral values.” It is lower among low-educated people who hold “authoritarian moral values.”
As a result, Cavaillé finds the more education one has makes one more conservative on policies that take from the rich and more liberal on policies that give to the poor.
Cavaillé is turning her dissertation into a book manuscript whose working title is “Fair Enough: Support for Redistribution in the Age of Inequality.”
D3nnis Haffey - 1973 LSA, 1976 Law
This is an interesting article, but I am always a bit of a skeptic when presented with theories based on capsulizing what entire groups of people allegedly think or believe, The essence of much discrimination is attributing to individuals characteristics associated with their “group”. And why isn’t progressive taxation justified by the simple fact that those with high income and wealth are more able to afford the taxes necessary to support the society (and economic system), which happened to be one in which their particular talent and effort generated high levels of income and wealth?
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Jeffrey Schmidt - 1990
You are making the assumption that tax revenue goes toward supporting society. The “investments” made by our government are very poor judging by their results. The “investments” may be better for society if made by those you refer to with high income and wealth.
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Matthew Taylor - 1993
I’d like to ask the professor: “Why should life be fair?”? Why does the answer to inequality have to be zero sum with leftists? Let’s call “redistribution” what it is: Theft from one who has, to give to one who didn’t. How is that “fair” to the person losing what was taken from them? In a great land once founded on property rights and free enterprise, I choose these and consider it immoral for folks like Cavaille to suggest government sanctioned stealing is ok. I will not be reading her book.
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Mike Jefferson - 1979
In order to create a more fair and just society, there has to be integrity in government institutions. We’ve seen the wholesale corruption of the IRS, DOJ, Intelligence agencies, and Congress. They’ve sold out to the Military Industrial Complex and American oligarchs who project fake liberal policies which pit neighbor against neighbor over silly social issues while the MIC and oligarchs enrich themselves. During the pandemic, when 80 million Americans saw their economic prospects diminish, the fake liberals including Bezos, Zuckerburg, Gates, Buffet, Pritzkers… roped in huge increases in wealth over $1.4 TRILLION.
Now, while many American cities from Portland to NYC have become uninhabitable cess pools of filth, crime, and burgeoning homeless populations, the elite laugh while jetting around in their carbon belching private planes, leaving the rest of the struggling working class to argue with each other over global warming and transgender relations. It’s time to burn the castles!
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Keith Schwan - 1973 BS, 1975 MBA
This article ignores the incentive of income to encourage efforts that promote the overall prosperity of a society. Redistribution of income reduces the incentive to make high value contributions of effort and talent while at the same time increasing the incentive to contribute little or nothing. Income redistribution schemes have the potential to distort, disrupt and ultimately to destroy an otherwise prosperous society. Admittedly, the value/income/incentive relationship does break down at the extreme high income level, which occurs because of a breakdown in competition due to monopolistic or protectionistic characteristics (e.g. Facebook, Amazon, Google). In that case, high taxation may be beneficial to restore balance. The relationship also breaks down at the extreme low value level where talent and effort is insufficient to generate an adequate income. In that case, redistribution may be unavoidable, but wherever possible, reeducation and retraining must accompany redistribution to increase the value of the talent and effort offered so that the low value does not become permanent. For the vast expanse of incomes between those extremes, it is best for the society and the economy to avoid the distortion of incentives caused by redistribution of income.
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A Dent - '68
Prof. Cavaillé is in effect saying:
From each according to his ability, to each according to his needs.
This the prime tenet of Marxist philosophy and was applied in the governmental form of Communism, which did not work out too well. Prof. Cavaillé looks a bit young, but having experienced Communist nations, first hand, I oppose her view point. BTW the stereotype of college towns (Cambridge, Ann Arbor, Berkeley) is leftist politics. Guess there is some truth in stereotypes. AD
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