Justifying Robin Hood Is Easiest If We Are Honest About It
by Neil H. Buchanan
Does it increase people's overall well-being if a country has the equivalent of Robin Hood -- some entity (government or otherwise) taking from the rich and giving to the poor? Yes, emphatically yes. Even so, this question is a timeless one among scholars and policymakers in debates about taxation, expenditures, and related questions of budgetary policy.
Although what I am writing today is not at all tied to a moment in time, I will note that the question of progressive redistribution was again in the news last week -- frustratingly so, because the central player in that news cycle was Senator Joe Manchin, the unrepentantly conservative Democratic senator from West Virginia, whose name will forever be found in sentences that include variations on the words frustrate, exasperate, and infuriate.
As part of Manchin's latest bait-and-switch, he ensured that the US will be unable to join in the proposed global minimum corporate tax, and more generally he has made it clearer than ever that he is opposed to voting to make the tax code even slightly less gentle to the wealthiest Americans. His proffered reasons are, as always, a combination of self-contradictory tripe and embarrassingly silly non sequiturs, but the bottom line is that the last best hope we might have had to see some progressive change in fiscal policy before the Republicans establish permanent one-party autocratic rule is now dashed.
That is not, however, because progressive redistribution is difficult to justify or defend. Indeed, Robin Hood had a great idea all those centuries ago, and although the great minds of political philosophy have wrestled with the question ever since (even before then, in fact), the case in favor is much easier to make than the case against. There is nothing like unanimity among moral philosophers or anyone else, but progressivity at least has the great advantage of being intuitively appealing to citizens in democracies and autocracies alike.
The problem, as the title of this column suggests, is that there is a way to make that argument that is -- while not exactly dishonest -- somewhat of a misdirection play. It falls squarely in the two-clever-by-half hall of fame.
Most readers of a column like this one will have come across a very appealing argument that goes something like this:
Having "things" makes people happy, and having more things makes people more happy. However, the marginal increase in a person's happiness -- that is, the extra amount of happiness that a person feels from having one extra unit of things -- declines as the number of things goes up. You know, like when you have an ice cream cone on a hot day, and the first taste is wonderful, the next lick is almost as good, the next one less so, and on and on. In that instance, it's even possible to overdo it and find that too many extra licks cause you to become less happy, but even without that, there is diminishing marginal happiness as we increase our consumption of things, even if each thing continues to increase our happiness a little bit.
Change the words happy and happiness to "utility," and you have the basic story that we teach students when we introduce them to utilitarianism. Even if we cannot measure units of happiness (there is no yardstick for utils), we often feel comfortable asserting that more is almost always better than less, but the more one gets, the less "extra better" a person will feel. Diminishing marginal utility can be thought of as happening from almost the first unit of "things," whereas reaching a satiation point beyond which utility would actually decline is neither necessary nor even interesting.
The next move, also familiar to untold legions of former students from time immemorial, is to aggregate each person's "utility function" into a "social utility function." Even though we cannot measure utility, and even though it takes some important simplifying assumptions to get there, one can imagine policy discussions as an effort to maximize social utility, such that the evaluation of every proposal becomes a matter of predicting whether the additional happiness caused by the policy change outweighs any reduction in happiness caused by that change. In jargon: Does the marginal social utility of the policy change exceed the marginal social disutility that it will create?
And this is where liberal/progressive types get sucked in, because the next step is so, sooooo deliciously appealing. After all, if it is possible to use orthodox economic approaches to reach liberal/progressive results (and utilitarianism is as orthodox as orthodox gets), the next move seems like a nice twist of the knife. "Hey, all you conservatives who've been browbeating me about the supposed inefficiencies caused by minimum wages and government regulations, I finally gotcha!"
The supposed gotcha is to say that, even though we cannot directly quantify utility (or even changes in utility), we can argue that because utility is marginally declining, then dollars are much less valuable to rich people than they are to poor people. We can therefore increase social utility by adopting progressive taxing and spending policies -- where "progressive" in this context does not mean Robert LaFollette's political movement or its progeny (except by implication), because progressive fiscal policies are technically defined as those that involve higher taxes and lower (or no) benefits as incomes or wealth rise.
A person thus besotted could then say to an unhearing Joe Manchin that society would be better off by taking a thousand dollars from, say, Betsy DeVos and giving it to a single parent living in rural poverty, because DeVos would barely care (or even notice) the lost funds, whereas the recipient's life would be transformed. What a great story!
As much as I support the goal of those who tell that story, however, it is truly nothing but that ... a story. It might have great rhetorical power, and it can persuade a lot of people. I know many scholars who think that it is an objective truth and treat it as such; and their being wrong about that does not make me stop supporting their goals and policies.
There are plenty of objections to the story, but rather than continuing to go over very old ground, I want to point out that a relatively recent contribution to this debate (and given that this is a truly ancient debate, having something new to say in 2011 was truly remarkable) laid out in clear terms why those of us who want to live in a society with a robust Robin Hood policy regime should not rely on the net-social-utility-goes-up-because-rich-people-barely-care story.
In On the Edge: Declining Marginal Utility and Tax Policy, 95 Minn. L. Rev. 904 (2011), Professor Sarah B. Lawsky sympathetically examines the "a dollar gives more utility to a child living in poverty than to Bill Gates" story, being clear that she endorses the policy outcome that the story supports. That is, she believes in some form of liberal egalitarianism (as do I). The problem is that the various steps in basing that outcome on utilitarianism are not only logically "un-tight" but empirically unsupported.
Professor Lawsky's article does not digress into the idea of the "utility monster," but I will mention it here because it is consistent with the critique of this clever attempt to use utilitarian logic against conservatives. The utility monster (UM) is a person who might exist, or maybe not. If it does exist, the UM is not a monster in the destructive or evil sense but in the sense of being unusually large. Specifically, the UM simply takes more pleasure out of things than other people do, and it is insatiable -- that is, its marginal utility does not decline and might even increase as it consumes more things. At the very least, the utility it derives from additional consumption is always higher than everyone else's. For TV nerds, think of the "Futurama" character Hedonismbot.
The possible existence of a UM is a problem for redistributionists, because if we truly believe that we should be maximizing aggregate social utility, the only way to do so is to take from everyone else and give everything to the UM. The usual response to this idea from defenders of this use of utilitarianism is to say that the UM is at best a curiosum, but "let's get serious" and understand that "in the real world" people have diminishing marginal utility and that -- although we cannot measure it -- it seems "all but certain" that people would have similar enough utility functions to support a Robin Hood outcome.
Professor Lawsky's response is aimed precisely at that supposedly more reasonable version of the assumptions of redistributionist utilitarianism. After all, as she points out, the approach fails not because of the possible existence of some seeming outlier like a UM but because the pedestrian version of diminishing marginal utility is simply not grounded in logic or evidence.
A person does not have to be a utility monster to be capable of systematically deriving more utility from additional things than another person does. A rich person -- at least, a rich person who had to put in effort to become rich (which is by no means the prototypical American rich person, but no matter) -- might have done everything that she did to become rich precisely because she is not monstrous but is simply more jazzed about money than other people are. It does not take a strange looking graph of a hypothetical person's marginal utility to undermine the Robin Hood story. It only takes a somewhat higher y-intercept.
I should say that it is truly odd for people who rely on utilitarian theory, especially those who are trying to prove their "objective" bona fides by strutting their familiarity with (what they think of as) advanced math, to rely on the kind of "let's get serious" escape hatches that I noted above. This also happens when they defend rational choice theory, where counterexamples and evidence are dismissed as "complicating the story" or (and this is the weirdest dodge) that they "make the math intractable. If being a teched-up mathematical economist is supposed to pay off because it relies on ineluctable logic, why are we satisfied to say that doing "more math" is better than less, if everyone knows that even more math -- if only someone could figure it out -- could lead to entirely different answers?
In any event, Professor Lawsky does not need to enter that debate, either. All she needs to do is ask if we have reliable evidence -- you know, empirical data -- supporting the idea that dollars taken away from rich people cause less disutility than the utility created by giving those dollars to poor people. And guess what? The evidence is, at best, unconvincing. Indeed, she concludes that the evidence "suggests that at least some people, over some range of income, have increasing marginal utility" (p. 939). This is even more surprising than my "higher y-intercept" objection above, where at least we maintained the assumption that marginal utility was declining all along the curve.
So what? The article reflects a careful effort not to make an empirical counter-claim or saying that we should rebuild our understanding of redistributive policy based on revised assumptions about individuals' experiences of marginal utility. The only person who can say that he affirmatively disagrees with the article is someone who is willing and able to say that the evidence and theory of utilitarianism supports the diminishing marginal utility story. Everyone else must read Professor Lawsky to be saying what she does, indeed, say: comparing utilities for this purpose is not supportable by the existing evidence or theory.
What Professor Lawsky does say, however, is much more important. People who want to support Robin Hood-style policies are ultimately doing so not because they believe in diminishing marginal utility (utility that is at least comparable enough across people to justify redistribution) but because we believe that poor people should be made better off than the current set of laws has made them. Those laws are almost always written by the people who benefit most from the laws and want to protect their advantages, but even if the "market outcome" were somehow not rigged, we still viscerally rebel against inequality, at least in extreme degrees.
Why? Because tolerating inequality involves visiting indignity and premature death upon billions while benefiting people who cannot think of anything better to do with their billions than amping up the costs of their kids' birthday parties and occasionally flying into not-quite-space on a what is literally a long ego trip. Or, in Henry Simons's quaint words from nearly a century ago, inequality is "evil or unlovely."
Most people are attracted to the Robin Hood story because it appeals to their moral sense. Retrofitting a geeky tech fantasy story that is ultimately unmeasurable and untestable gets us nowhere. This moral revulsion against inequality seems to be as close to universal as these things can be, given that even autocrats and would-be autocrats try to appeal to the masses by pretending to be anti-elite. Even as the United States barrels toward its autocratic future, that will not change.
Committing to any degree of egalitarianism -- and, for that matter, rejecting egalitarianism entirely -- is ultimately a normative choice. Pretending that we can justify that choice pretextually by making "sensible" assumptions within a utilitarian framework has proved to be catnip for generations of liberals, but it is neither necessary nor wise.