Book Review: Political Philosophy and Taxation

I was pleased to be asked to review a book on Political Philosophy and Taxation for the British Tax Review, and I wanted to provide the text here on my blog for the benefit of those who do not have access to the journal. 

Legal disclaimer: This material is (a slightly edited version of) the review first published by Thomson Reuters, trading as Sweet & Maxwell, 5 Canada Square, Canary Wharf, London, E14 5AQ. It was published in the British Tax Review as "Political Philosophy and Taxation (Springer, 2022), by Robert van Brederode (ed.) (2022, 5, pp662-5)" and is reproduced by agreement with the publishers. 

Review of Political Philosophy and Taxation, by Robert van Brederode (ed.) (Springer, 2022)

As someone who teaches an introductory course on political philosophy, I was pleased to be asked to review this work,  which really is—as it claims—the first book providing a comprehensive overview of political philosophy and taxation. The textbook for the course I teach (Wolff, 2015) begins with the suggestion that political philosophy might be about “Who gets what?” and “Says who?”  Put like this, the link between political philosophy and taxation is abundantly clear. 

There are, no doubt, many ways to structure such a book. It could be organised by topic like the abovementioned textbook, which covers the key topics of:

1) The nature and justification of the state.

2) Who should rule? Should we have democracy, and if so what kind?

3) Liberty and rights.

4) The distribution of property.

5) Justice for everyone, everywhere? (On whether Western political philosophy has ignored or excluded any important groups or perspectives.) 

Again, all of these topics are relevant to taxation, particularly property and distributive justice. However, unlike the above textbook, this book is organised around different schools of thought within the Western tradition. The subtitle of the book describes it as a history of political philosophy. The book does indeed provide a detailed intellectual history of several influential schools of (Western) thought on the topic, explaining how key thinkers from those schools approached the topic of taxation, situated within their wider philosophical projects. This is a sensible move. Experts in different schools of thought can then take turns in summarising each, indicating where key thinkers have said anything relating to taxation. 

One question this raises is whether the book is an exercise in intellectual history or directly one of the philosophies and their implications. The first and last chapters by the book’s editor are certainly not intellectual history, but rather direct interventions in debates. The other chapters tended to fit the historical brief more closely, reporting on the relations between various thinkers and their views of taxation.  Two, acknowledged, exceptions were Chapter 8 on legal positivism and the final chapter (11) where the editor provides his own proposal for radical tax reform. There is a good case for organising the book by historical school, though that places additional pressure on the introductory chapter, a point to which I will return. 

Interestingly, most of the authors are not obviously primarily political philosophers, given their departmental affiliations. However, they all clearly know their respective schools of thought very well indeed, often because they use them in their own research on taxation. Certainly, taxation is inevitably a multidisciplinary topic, hence the need for all who write about it to have a good understanding of political philosophy. 

Which “schools of thought” should be included in such a book? The book contains a lot of the ones I would expect, but I found some of the choices surprising. One thing to make readers aware of is that the book leans libertarian, which is clearly the editor’s own approach given the chapters he has authored (the first and last). Perhaps that is a perk of being the editor, but I think it should have been made clearer at the outset, or, perhaps even better to avoid these strong interventions given that they did not fit with the stated brief of the book. 

There are several chapters that are more left-leaning (on socialism, egalitarianism and feminism), so the book still provides a good overview of most of the relevant views of taxation. However, questions can be raised as to whether there was a need for chapters on conservatism, classical liberalism and libertarianism, plus the two non-historical chapters, given the overlap between them. 

I think that the libertarian leanings of the book could give a false impression of the way that contemporary political philosophers would approach taxation. I undertook a poll of 78 philosophers on the topic and one third approached the topic in a liberal egalitarian way (including myself). Thirty per cent took a socialist approach and about 15 per cent consequentialist, most of whom selected “centrist or progressive” rather than classical liberal.  Seventy per cent of responses indicated that liberal egalitarianism represented the dominant approach. A lot of the debates within this school were mentioned in the introduction but not actually presented in the book (except in passing). (For more on the literature see Pedersen) 

There would have been a case for a chapter on luck egalitarianism, and indeed Ronald Dworkin (2006) has an entire chapter on tax justice in a book which was not referenced at all.  

Another omission I thought was discussion of Aristotelian-inspired views (perhaps other than in the chapter on conservativism), which are particularly to be found in theories of desert, participatory democracy and communitarianism. Natural desert is a distributive theory, a rival to Nozickean libertarianism, utilitarianism and the various forms of egalitarianism (see Campbell, Miller). Desert theory is not at all popular with political philosophers—it had no advocates in my poll.  However, there is an argument that desert is the common approach of the public (see Shiffrin).  There was a section on desert in the introduction, but this was a very misleading discussion, presented as an attack on luck egalitarianism, a view which is neither desertist nor—we recall—represented in the book. 

Desert might also be relevant to those who believe that political decisions should be made democratically as a representation of the views of the common good, or as an expression of their views or values. Communitarianism was mentioned as an example of a view opposed to libertarianism in the introduction  but not again in the book. The final chapter did have “Democracy” in the title, but this did not present a history of the arguments for and against democracy, which go back to Plato’s Republic, but was in fact highly opposed to democracy. Agreeing with anti-democratic libertarians that “an electorate that is uninformed, underinformed, or misinformed”  will mean that majority rule “opens the door for the misuse of power to the detriment to the interests of others”.  “Majority democracy violates the principle of equality as it is based on coercion of the many”,  which apparently means that a decision by the majority to impose taxation would violate the “principle of liberty”.  These apparently inviolable principles are neither explained nor referenced.

Philosophy of colonialisation and race is another possible approach that could have been included, though this has methodological affinities with feminism and intersectionality as mentioned in the chapter on feminism. The historical-school approach taken also creates the problem that important contemporary debates are omitted, about global justice for instance. 

Most of my criticisms are of the introduction, as I’ve hinted above, which represents a missed opportunity. The first words of the introduction are “liberal individualism” but what is this and why start with it? Perhaps because methodological individualism was the starting point of Hobbes’ political thought, which later begat liberalism (though Hobbes was no liberal). If the book is written for newcomers to political philosophy it should have explained what that subject is, perhaps mentioning disagreements over method, such as whether liberal individualism is the right approach. Another important thing to cover is to explain the philosophical topics and disputes that bear on taxation, and perhaps to explain some common terminology. These are mentioned, but too obliquely for the complete novice who knows little about the subject. 

The introduction is very long, but far too much of it is spent attacking views that will be presented later in the book. There are seven pages criticising Murphy and Nagel (2002) on “everyday libertarianism,” even though their argument is presented in three pages near the end of Chapter 9 (pp.335–338).  I can understand that their arguments should be presented, since they are very important. However, the introductory chapter should really ease newcomers into the discipline, not simply attack the dominant views. 

The introduction began and ended with a key point that I would expect to find; why have a book on political philosophy and taxation? Some good points were made here, but more could have been added. The book is quite advanced, but it should be useful for graduate students and academics whose work relates to taxation. Tax practitioners may also benefit from considering political philosophy, though they might need to read an introductory text first. However, political philosophers too could be interested in reviewing what different schools of thought have to say about taxation. Those looking to write about tax will also benefit from having the dispersed writings of thinkers compiled together in one volume. 

Overall, as a political philosopher with a focus on taxation, there was little difficulty in selling the importance of a book with the title Political Philosophy and Taxation on me. The chapters were capably written by experts, and I learned a lot from it. Indeed, I found myself wishing that this very useful resource was available when I began my PhD on the topic nearly 15 years ago. 

References:

Campbell, T. (2002). Justice. Palgrave.

Dworkin, R. (2006). Is Democracy Possible Here? Princeton University Press.

Miller, D. (1999). Principles of social justice. Harvard University Press.

Murphy, L., & Nagel, T. (2002). The Myth of Ownership: Taxes and Justice. OUP.

Pedersen, J. (2020). Distributive justice and taxation. Routledge.

Sheffrin, S. M. (2013). Tax fairness and folk justice. Cambridge University Press.

Wolff, J. (2015). An introduction to political philosophy. OUP. 

Equality of Opportunity and Discrimination Materials

This coming term I will be teaching a new course for the general public on some overlapping issues relating to justice that I thought would work well together. 

The online course Equality of Opportunity and the Ethics of Discrimination covers some lingering issues of controversy about how society should respond to unequal opportunity. There is even disagreement about what 'equality of opportunity' actually means, and whether it is really an important goal. 

You can read more about the course on the webpage. 

However, I thought I would share some useful background materials for those who might want to explore further, either in advance of taking the course or if you miss the course and want to investigate the topic. 

Online lectures

A good place to start with political philosophy is Michael Sandel’s Justice Course. Several lectures are directly relevant to this course topic, such as:

Lecture 14: A Deal Is A Deal  (You Tube direct link) and  Lecture 15: What’s A Fair Start? – Harvard Justice (You Tube link).

Tommie Shelby "Justice and Race" Blavatnik School of Government (2020)

Charles W. Mills "Theorizing Racial Justice" Tanner Lecture on Human Values (2020), or a video of his talk "Racial Equality" UCT (2014)

More advanced are Tim Scanlon's Uehiro Lectures, Oxford (2013). The third is “When Does Equality Matter? (lecture 3 – equality of opportunity)” but lectures one and two are useful and relevant as well.

Janet Radcliffe Richards' Uehiro Lectures, Oxford (2012) are also relevant. Again, the third is particularly relevant, but references arguments introduced in the previous two. 

“When Does Equality Matter? (lecture 3 – equality of opportunity)” but lectures one and two are useful and relevant as well.

Scanlon builds on the work of his teacher John Rawls, and there are lots of lectures and podcasts about the work of Rawls, such as this Bryan Magee Interview with Ronald Dworkin “Rawls vs Nozick” (1978).

For podcasts, there is the 

• Philosophy Bites episode "Jo Wolff on Rawls" (Also copied into a You Tube video) 
• Talking Politics: History of ideas episode “Rawls on Justice” (2020). 

Podcasts

The BBC Reith Lecture series by Kwame Anthony Appiah (2016) is worth a listen. 

“Discrimination is Expensive” The Pie (2021)

Policy Matters “Discrimination in the labour market and what policymakers can do about it” University of Bath (2021)

Interview with Tarun Khaitan "Indirect Discrimination" Philosophy 247 

"Episode 9 - Understanding indirect discrimination" Mills & Reeve - Employment law Podcast (2017)

The Libertarian Podcast “Anti-Discrimination Laws Vs. Freedom of Association” Hoover Institution (2021)

Course books

The course does not have a single textbook, and those on the course will be provided with selected readings from several sources.

However, if you wanted to purchase a book for use alongside the course then you could go for one of the following, depending which of the three related topics you are particularly interested in:

• Equality of opportunity, in which case you could buy Andrew Mason’s book “Levelling the playing field”
• Discrimination, in which case you could buy Deborah Hellman’s “When is discrimination wrong?”
• Affirmative action, in which case you could get either Cahn’s “The Affirmative Action Debate” or Cohen and Sterba’s “Affirmative Action and Racial Preferences: A Debate (Point/Counterpoint)” or Elizabeth Anderson's "The Imperative of Integration" (2011)

Meritocracy

The course does not focus on the issue of meritocracy, but it is certainly a relevant approach, and one that has been much discussed in recent times. 

Sandel, mentioned above, has recently published a book The Tyranny of Merit and. 

A few other recent books are available free to download:

• Littler, J. Against Meritocracy (2017) is available to download for free. 
• Mulligan, T. Justice and the meritocratic state (Taylor & Francis, 2018). Book available to download as it is Open Access. 

Happy reading, watching and listening and I hope to see you on the course!

Preface for a book I might never write

Preface for a book I might never write: Arguing for the CLIPH-rate tax

Lately I’ve been teaching or planning courses about distributive justice and I’ve mapped out a book I’d love to write if I had the time. It's probably about third on my list of projects though I sometimes mentally change the order of priority.

In fact, I wouldn't be starting from scratch. As well as having taught some of the theories, I could use a couple of pieces I’ve published, and I have written some blogs on the topic too. However, I thought it might be nice to note down the idea here, just as no doubt countless authors have written a preface but never completed the actual book.

The basic idea is to write a three-part (or even volume!) work presenting the argument(s) for my CLIPH-rate tax system from three different theories of justice; Egalitarianism, Consequentialism and desert theory.

Egalitarianism

The egalitarian argument is the easiest one to reproduce as I’ve already written a couple of pieces about this, in an edited collection and in my article “Arguing for hourly averaging.” Resource egalitarianism is the theory of distributive justice I find most compelling, and so this has been my primary concern up until now.

However, not everyone is convinced by egalitarianism and I think that it is possible to make strong arguments for the CLIPH-rate tax from two other theories.

Consequentialism and prioritarianism

Consequentialists about distributive justice believe that the economy should be designed to bring about the best total consequences. The good consequences could be subjective welfare, preference satisfaction, freedoms or some mixture of goods. Consequentialism is a totalising theory; bring about the most good. It therefore doesn’t matter how the goods and bads of society are distributed. Someone might be very badly off both absolutely and relatively under a consequentialist system and they would have no grounds for complaint (except by rejecting consequentialism). For many people, this is enough to reject consequentialism; everyone is just a means to bring about the best total consequences.

In fact, consequentialism does not have to ignore distributive matters entirely. Prioritarianism is a consequentialist theory which gives priority to those who are worse-off when undertaking the consequentialist calculation. The weighting towards the worse-off could vary; with greater emphasis on maximising the total amount of good or with greater priority given to those who have less. Prioritarianism seems to make consequentialism a lot more acceptable, though it doesn’t fully resolve all concerns about it.

How can you argue for the CLIPH-rate tax along consequentialist or prioritarian lines? I’ve made some points in previous blogs and in my book about the ways that an economy with the CLIPH-rate tax at its heart would combine incentives to work, save and invest with a great deal of redistribution to assist those on low incomes. Consequentialists, and particularly prioritarians, would want to ensure that there isn’t an impoverished class of workers at “the bottom” of society. Raising the standard of those who are badly off should bring about better total (let alone prioritised) consequences if we accept that nearly everyone gets declining marginal utility from resources. A poor person will get more utility (or whatever other good you specify) from a £10 gift than a rich person would. A successful economy should therefore focuses on making the worse off as well as possible, where this can be done without damaging overall economic productivity too much.

I would like to do more to show that the CLIPH-rate tax can both help to enlarge the pie while ensuring that everyone gets a decent slice. Hour credits are a key part of the tax calculation, and the only thing that someone can do (by choice) to get more hour credits is to undertake more work. The incentive to work is therefore built into the system. Meanwhile the tax calculation should generate as much taxation from unearned income as possible, representing the ideal form of taxation.

This is because the CLIPH-rate tax should do a good job of taxing not just unearned income but, relatedly, all forms of economic rent. Economic rents accrue to someone when they get more than they need in order to make the economic transaction in question. So if a landlord is considering renting a room and would accept £100 for it, but can get £200 due to high demand, then fully half of the rental income they get is economic rent. If this landlord has a tax rate of 50% they would still rent out their room, but instead of their getting the economic rent, it would go to the government. This revenue can be used to assist the less fortunate members of society, increasing their happiness.

That is a summary of the theory anyway, and I’d like to have more to back up my claims. It would be great to work with economists to help make the case.

Desert theories

I also think that a very strong case can be made for the CLIPH-rate tax from the perspective of desert theory. In a CLIPH-rate tax economy people get more income if they either get more hour credits (more hours worked) or have a higher income. Income made from working will therefore generate much more of a reward than unearned income, something which chimes well with desert theory.

Desert theories aren’t particularly popular with political philosophers, though they seem to be more popular with the general public, who often talk about particular people getting more or less than they deserve. A dodgy banker, crook or tabloid “benefit/welfare queen” could be said to have much more than they deserve. On the other hand, people might claim that nurses, kindly and charitable soul, or other hard-working person get less than they should.

Philosophers have delineated a few different bases for these desert claims. One is that some are more productive than others and should be rewarded accordingly. This is the productive contribution desert base associated with David Miller, Jonathan Riley and Gregory Mankiw.

A second desert base holds that people who do more burdensome jobs should get more than others. This is the compensation for burdensomeness desert base associated with Julian Lamont.  According to this theory, the person who does dangerous or unpleasant work deserves more than others who have less burdensome jobs. Someone working very hard in the cold on a North-sea oil rig with a high risk of death deserves much more than someone who works in a comfortable office.

The third desert base has features from the two above and attempts to get around the problems they have. This is that people who put in more effort should get more than others. This view is associated with George Sher, Wojciech Sadurski and Heather Milne. There are issues with all three desert bases though they all have some intuitive appeal. One is the extent they link to what people earn on the labour market.

I believe there is strong case to be made that the CLIPH-rate tax does a very good job of tracking these desert bases. Under a CLIPH-rate tax system people will get more if they get more hour credits (work longer hours) or if they have a higher income, and particularly if they do both these by working longer hours for higher pay. This seems to track all the desert bases above, since market pay rates reward productivity, burdensomeness and effort, and the hourly element also represents a productive contribution, the burden of giving up one’s time and an effort. Meanwhile, people who receive mostly unearned income from gifts or economic rents will be taxed very highly.

Other theories

I don’t think that there is much traction in arguing for the CLIPH-rate tax from libertarianism, though perhaps it might work from a few of the less common versions of left-libertarianism. Nevertheless, it would be a stretch and I don’t find libertarianism compelling anyway so I can live without trying to make that argument.

Sufficientarianism is another theory that is plausible. While I’m sure it’s possible to make an argument from sufficientarianism I’m not sure whether it is worth attempting it. After all, there are lots of forms of sufficientarianism and many people advocate a pluralist theory anyway (sufficientarianism + some other theory). Plus I don’t see why the CLIPH-rate tax particularly does any better at getting people above thresholds except perhaps for the consequentialist/prioritarian reasons set out above. Let me know if you disagree and think I should write about this.

Prospects and next steps

What are the prospects for ever writing this book? We’ll see. I might be able to do it fairly quickly if I could devote a chunk of time to it, but other things always seem more pressing. Perhaps I can start with a few journal articles and see if anything develops from there. Maybe this is as far as it will get? If so, its nice to have a record at least.

And if anyone has any suggestions or wants to collaborate do drop me an email.

Maine tax proposal: Working hours, effort and desert

I was interested to discover that a Republican legislator in Maine has proposed that overtime payments should be exempt from taxation. Its interesting to note why he thinks it would be a good idea and the links to my hourly taxation proposal. Its proponent, Chad Grignon, is quoted on a local radio station:

I submitted this bill on behalf of all working Mainers who put in more than 40 hours a week and deserve to take home more of what they earn. That being said, working overtime should not be viewed as something we wish to see discouraged. In my opinion exempting overtime pay from taxation should reflect the sacrifices that working Mainers make going beyond the 40-hour threshold.

The word that sticks out for me here is deserve, perhaps because I've been teaching about desert theories of economic justice this term. Why is it that people who work longer hours deserve more (and to be taxed less) than those who work fewer hours? The theory that most obviously supports this view is effort desert theory; people who put more effort into their economic activity deserve more than those who put in less.

Effort desert theory, associated with philosophers like Wojciech Sadurski is a very progressive theory, for three reasons:

1. Talents shouldn't make a difference. Some people find it easier to be productive than others. Effort theory says people should be rewarded for their efforts relative to others, not how successful they are.  
2. Gifts shouldn't be allowed. If income should relate to effort put into the economy, then people shouldn't be able to get money without putting in the effort. Those who got their wealth as a gift from their ancestors should then face punitive tax rates.
3. Investment income isn't deserved. People who generate income from investments rather than working aren't deserving--they aren't expending effort. So landlords (except when they are making improvements or providing services) aren't deserving. 

The Maine proposal, however, isn't obviously progressive; it is a reduction in tax for a select group. This would then leave the state with less revenue to assist the poor. However, perhaps this is actually progressive to tax some people less if they are working long hours for it.

Perhaps what this latest proposal picks up on is that there is a group in society that is often ignored by both the left and the right--people who work very long hours for low wages. Because their hard work gives them a reasonable total income they might not qualify for much assistance from the state. Some on the left might not like their materialist attitude as well. The right ignores them because they aren't talented and they generally don't want to give people extra support.

Effort and hours spent working

Time spent is one way to measure effort, particularly when the work you do is directed so workers aren't able to vary how intensely they work; the intensity is fixed by the nature of the work.

My hourly-averaging proposal might be of interest to the Maine legislature as this calculates people's tax-rate according to the number of hours worked. Those who work longer hours to attain the same pay would be taxed at a lower rate. It would apply the principle not just to a limited case of hourly-paid workers who cross a threshold, but on a sliding scale across all workers.

Practical questions 

There are of course practical questions with both my proposal and Rep. Gringon. How do you reliably measure people's hours? Well, his bill points out that employers are required by law to pay the overtime compensation to the employee. So the legal system is already taking account of the number of hours that people work. In this case, presumably, the worker has an incentive to insist on their rights against their employer whereas there is a problem for the Maine proposal and mine in that the employee and employer could collude to overstate the number of hours they work.

Getting around this practical problem is difficult but not impossible. Monitoring employment contracts, pay-rates for different kinds of work, and investigating unusual cases could do a lot of the job. Furthermore, employers are increasingly using technology to monitor workers. If the authorities had access to this information then it would be easy to verify the amount of time people spend working.

Prospects for hourly taxation

This is just the latest example that shows the relevance of time to distributive justice; numerous forms of tax credits being an obvious existing example. Hopefully people will take greater note of this as my hourly averaging proposal is the most thorough application of the principle that people who work longer hours should be taxed less.

One rule for the rich...

A recent Washington Post piece by Elizabeth Breunig raises a lot of interesting points and is worth reading.

 

She highlights that in the US (as in the UK) there are constant moves to ensure that those receiving ever shrinking welfare payments are in fact working (or actively seeking work). This is sometimes referred to as 'workfare' 

Breunig points out that most of the non-working poor are elderly, children, or care-givers, all of whom seem to have some reason for not earning more in market employment.

What is particularly interesting about this piece is comparison between the treatment of the poor and rich non-workers.

Everyday libertarianism for the idle rich vs. workfare for the undeserving poor

This comparison might strike some as odd - the poor in question are receiving assistance from society via government spending while the idle rich in question aren't. They receive their money from dividends etc.

The author gives examples of policies that benefit investors and capital-holders, which could be considered subsidies for the idle rich. The point is that these subsidies do not come with a work-requirement as do workfare programmes

I think its possible to go further than this. Even if there weren’t such subsidies it would still be morally acceptable to insist that the idle rich work, even if their income comes from a “private” rather than a “public” source.

This is because the idea that there is a difference between the two is based upon a mistake, labelled everyday libertarianism by philosophers Liam Murphy and Thomas Nagel in their excellent book The Myth of Ownership.

This is the idea that people are led to consider their gross income to be ‘theirs’ and that the tax system takes some of it from them. If you are a libertarian, then you might believe this to be the case. However, since libertarianism isn’t a very attractive political philosophy and since most people aren’t in fact libertarians it is an unfortunate but common mistake to make.  

It is more appropriate to consider the property distribution system holistically, and consider each owner (individual, corporation, charity or government) as the temporary holder of their property. There are strong reasons to let the owner have power of the property while they own it, of course, and I don’t draw the conclusion that the government should be able to seize property unless there is an exceptional circumstance (such as a national emergency, where the property is required for infrastructure development or where the property in question is illegal). I don’t go as far as more radical leftists who would then say that the above means that any private property can be seized by the government at any time.

The point is that when property is transferred from one owner to another it is an opportunity for society to consider whether to (in rare situations) block or (more commonly) tax the transaction. It may appear as if the transaction is just between the two parties involved, but in fact the whole of society is involved. Firstly, society supports the system in which the property and the transaction exists. Secondly, the value of the property exists because of the rest of society.

Investors aren’t just sitting on their property, they are sending it out into the world and getting more back. This is captured by my Comprehensive-Acquired-income tax-base. A self-sufficient farmer who tends their own land and gains from it wouldn’t have to pay tax on their gains. But no-one gets rich from being a self-sufficient farmer who does not engage economically with anyone else.

The idle rich person is then a recipient of social wealth in just the same way as the welfare/benefit recipient.

Why do we care whether people work?

There are lots of possible reasons why we might want to ensure that people work rather than receive money while being idle.

·       Social Consequences: If someone who could work doesn’t do so then this is a missed opportunity for society. Society could have got the benefit of this labour but misses out.

·       Paternalistic consequentialist: This is the idea that it is in people’s interest to work (whether they realise or not). This is because people who are idle will get into unhealthy habits, become slothful, lose purpose and so on.

·       Contributions are important: It is important for people (where able) to contribute to society, and people should only receive social wealth to the extent that they do contribute to society. Interestingly, desert-based (or meritocratic) theories of justice would be against all unearned wealth such as gifts and inheritances since these are unearned.

What is interesting is that these three justifications apply to the wealthy just as much as the poor.

An alternative justification is that people should do whatever they are required to do by the correct theory of justice. Some of those theories will require workfare, and they may or may not require wealthy individuals to work too. My preferred theory would require both. This is the correct way to think about it, and I encourage people to engage with such theories.

However, what about those who want to support workfare but not force the idle rich to work before they can receive unearned income?

To be consistent, anyone relying on any of the three arguments listed above also will have to apply this to wealthy individuals who choose not to work.

What is a contribution?

In the article, Breunig makes the point that carers can contribute to society without receiving market income. Furthermore, many clearly socially useful activities aren’t well-rewarded in the market (such as most minimum wage work), while some activities that aren’t as clearly socially useful are well-remunerated. This is because remuneration follows from supply as well as demand.

On the other hand, someone who inherits a fortune and lives off the returns from this obtains a market income without contributing. It would be possible to insist that only those who work should be able to receive unearned income, or that lifetime unearned income should be linked to the amount of work someone has performed.

Market income is not a perfect indicator of contribution. However, again, I don’t take the hard-left conclusion that market income is meaningless.

Nevertheless, there is often some correlation between market income and social contribution, something I mentioned in my blogs on desert-theories of justice. The point is that we can look at a broad conception of contribution as participation in the labour market or undertaking some socially useful activity such as studying or caring.

Workfare for the rich?

So, do we need to insist on workfare for rich investors as well as the poor?

I think so, on the basis that this would make for a fairer society. My CLIPH-rate tax system would link people’s net income to the hours they have worked (or undertaken some equivalent or having been excused from doing so).

However, those who argue for workfare on more limited grounds, such as the three arguments listed above, should also support workfare for the idle rich on the same grounds. This would presumably mean taxing non-working but able people from gaining unearned income through punitive taxation or by blocking such benefits until the individual has undertaken the requisite about of work.

How else could they avoid the inconsistency?

·       They could stop insisting on workfare and instead support a Universal Basic Income, i.e. to give up on workfare.

·       They could advocate a theory of justice which justifies workfare programmes for the poor but not the rich. This rules-out desert or contribution-based theories. Furthermore, it probably also rules-out consequentialist theories which emphasise economically strong outcomes.

As I mentioned, my proposal is to link net income and work for all those who can work. This applies whether they are wealthy or poor, high-earner or low-earner. 

Conclusion: Institutionalising the constructed desert base (8/8)

In my previous blog I presented a new form of desert base that I believe is more attractive than the traditional approaches to economic desert. I will conclude my series by considering the institutional implications of this.

1.       Implant and monitoring

If we could insert chips into everyone’s heads to measure reliably how much time, energy and dissatisfaction they are expending at a given point in time. They would also be monitored somehow so it can be known if they are engaging in economically productive activity. This technology could then monitor how much people are expending when they engage in productive activity we would be able to share out incomes accordingly. However, we cannot currently do this, and perhaps would worry about doing so—it might be quite invasive to follow people’s activities and mental states that closely.

2.       An endowment tax.

For the time being it would be easier (though still not that easy) to take account of people’s incomes, the time they expend and their abilities. Essentially, an endowment tax would be the most obvious stand-in for the constructed desert base.

This would tax people differently depending on their abilities so, where this is measured by test results, someone with top IQ and high school test results could be assigned to a higher tax band throughout the remainder of their life than those with lower scores. Even then the practicalities are difficult—how much weight should be given to the different measures such as mathematical vs. emotional intelligence, creativity vs rule-following etc.

Stuart White proposes a system which puts people into three categories to make this easier (see also chapters 4 & 5 of his book The Civic Minimum). However, while this makes the endowment tax much easier to administer and much less controversial it also reduces its effectiveness at taxing people according to the ability and therefore

There are several serious complaints against endowment taxation, such as that it would be invasive to test for this and that it would unfairly limit the talented. Some people have talked of the ‘slavery of the talented’ as talented people would not be able to take lower paid work that would be open to less talented individuals—the low paid work would not be enough to pay their higher endowment tax.

So if endowment is considered too difficult to accurately measure or if endowment taxes are considered unfair, what is the next-best option for the constructed desert base?

3.       Hourly averaging

I would suggest that my hourly averaging proposal is the next closest option to the constructed desert base. This system taxes those who receive large incomes after expending a small amount of time working and provides subsidies to those who work long hours for small rewards.

I have suggested that time spent working should be one of the factors in the desert base as it is something that people can control. One complaint might be that some people who work long hours do so in low-productivity activities which are do not make them deserving. However, in some cases this might be because the person cannot obtain more difficult higher paid work.

It is quite different from endowment taxation in that people with a lot of potential to contribute but who do not do so will not be penalised. However, it may not be that someone who has more potential finds a particular job easier than others and therefore render them less deserving. It might be that someone with the potential to be a lawyer finds being a waitress just as stressful as the person who would struggle to master legal procedure.

I would also add that my CLIPH-rate tax system which combines hourly averaging with a comprehensive tax on personal gains would track the desert base very well. This is because each person’s income would be tied to the number of hours they have worked in their lifetime, and those who have not worked would have their unearned income taxed at 100%.

The downside of the CLIPH-rate tax is that it would not be able to distinguish readily between two people who receive large hourly incomes due to the sacrifice involved vs. earning rents on their skills and talents. However, one factor is the way that prices will react to the tax—those who earn large incomes from rents will not require more pay when the tax would be introduced. On the other hand, jobs which people would be unwilling to do when taxes rise substantially are likely to be those which are both productive and involving a lot of sacrifice.

So a variation of the hour-credit system proposes itself. Those jobs which begin to go unfilled with the introduction of hourly averaging could be ones for which workers could receive ‘bonus hour credits’ as a way to recognise their sacrifice. Dangerous work such as deep sea diving might be one example of this—people might be happy to take these risks if they thereby earn a large net income and have a lot of leisure time to enjoy it.

Conclusion

I began this series of blogs explaining that some people find deservingness the appropriate way to determine how much each person should receive from their society. I explained the existing theories of economic desert which begin either from desert bases or from market earnings and why these are all problematic despite their various attractions. After highlighting the various links between economic desert and markets I proposed a new form of desert base constructed from the intuitively attractive elements of the existing desert bases. In this final blog I have considered the options to institutionalise the constructed desert base. I still remain sceptical of building economic justice from desert but I would challenge those who do to propose a more feasible and less controversial way to give people what they deserve than the CLIPH-rate tax.

Creating a plausible desert base

In my previous blogs I have outlined problems with the three main bases for economic desert and argued that making a direct link between market prices and desert is inherently problematic. In this blog I will present what I believe is a fairer desert base. This desert base utilises both desert bases and market prices, but as part of a wider desert equation. Essentially the idea is to construct a desert base by putting together the best parts of existing proposals.

The fair desert base is to give each person weighted share of social product which accounts for their personal sacrifice (encompassing time, effort, danger, stressfulness and risk of harm) expended in productive enterprise (accounting for the effectiveness of that enterprise and whether they had the ability to contribute more than they have). I will refer to it as the constructed desert base but an alternative name for the proposed desert base is the ability-adjusted multifaceted base.

So for an individual (i) where d is deserved income, n is the number of people in society, r is the total amount of resources available for distribution in the given time-period, s is personal sacrifice compared to the average (where the average is 1), p is productivity,  m is the individual’s market income (compared to average where the average is 1) and a is the application of the person’s ability to the work that they do (compared to average where the average is 1), the constructed desert base would be something like:

Of course the actual weightings of the factors and the practicalities of assessing these components (particularly sacrifice) is more complicated than is indicated above. Furthermore, we might want to apply ability to many of the subcomponents. Some people might have more stamina and be able to work longer and harder while others have disabilities that reduce their capacity. Some people might be more able to deal with stress or responsibility or unpleasant working environments than others.

As I emphasised, people’s gross income will (in normal circumstances) go up if they take work requiring more personal sacrifice, as I outlined in my previous blog. It will also go up (again generally though not universally) if they engage in more productive work, and also if they make use of their ability. However, some people have a much wider menu of productive options available to them and so they may be able to earn more than others without making as much of a personal sacrifice.

For example, a top professional footballer may well have to train and play hard to retain their position. But they don’t work several hundred times as hard as a roofer. The relative difference in effort is much smaller than that of market income. If the roofer could play football at that level they would do so, certainly given the financial rewards. However, they do not have the required natural talent and so do not have the option. The different earnings between the two do not reflect a large difference in sacrifice but rather a large difference in ability.

Markets play an important and interesting role in the constructed desert base. As I pointed out in my previous blog, an individual will tend to earn more if they work longer, do less popular work, and do work whose products are more highly desired by others. In that sense, higher earnings imply a higher level of desert. However, at the same time, higher earnings often arise due to a higher ability to earn, which does not indicate greater deservingness.

Why is the constructed desert base a good way to link desert and income? It utilises a market test to distinguish people who sacrifice more to provide the goods and services that others value. However, it is not a slave to market valuations as it corrects for the influence of ability.

I think the constructed desert base would match most of the cases where people intuit that person x deserves more than person y. Of course, it won’t satisfy those who see desert through a purely market or single-based-desert approach to the issue. However, I have explained in previous blogs why these positions aren't really that attractive.

For the record, I would suggest that I think the scepticism I proposed about linking desert to economic outcomes still applies. I suggested that desert theories fail if they attempt to build a bridge either from a desert base to income or from market incomes to a desert base. My proposal, however, is to attempt to link the relevant factors in an interlocked manner which utilises the market and the existing plausible desert bases.

One possible criticism might be that my constructed desert base is not thereby a pre-institutional notion of desert. However, just because it is a constructed desert base this does not mean it cannot be pre-institutional; I am not proposing institutions and then judging the distribution on its closeness to those institutions. It is important to utilise the market so that a) the amount people deserve is linked to the total wealth available for distribution and b) there is a link between what consumers want and what producers deserve. In my next blog—the final in this series on desert—I will conclude by discussing the institutional implications of the constructed economic desert base.

Desert bases and market income

So far in this series of blogs I have argued that there are serious problems when starting a theory of economic desert from either market incomes or the traditional desert bases. In this post I want to suggest that there is a link between the common desert bases and market income, even though it is not feasible to claim any simple and direct link between the two.

If we consider the three desert bases outlined previously we can see that they will, in most circumstances, have a strong influence on someone’s income.

Effort: If someone puts in more or less effort across their working life then we would expect their lifetime income to rise accordingly. This will be particularly true of people who are self-employed or paid for piecework, but we would even expect it for people in salaried jobs as their harder work may be noticed by superiors who will be keen to retain or even promote them.

Contribution: This desert base is often considered to be directly related to market income and so it is not controversial to claim that greater contribution will bring about greater market incomes.

Compensation: The labour market should also lead people to be rewarded more if they sacrifice more. People who work in more stressful, dangerous or unpleasant jobs get paid more than those with similar skills and talents doing less difficult work. In the UK an investment banker will get paid more than someone in the human resources department of a bank, a deep sea diver will be paid more than a teacher and a bin-collector will get paid more than a labourer.

The point is not universal. There may be people who put in lot of effort but in an undirected manner and would be more successful if they relaxed and slept more or slowed down and reflected more. Similarly, people’s sacrifices may sometimes go unrewarded, for example if they are the hardest working person in a large team where the rewards are shared out equally or where a lot of people only have less enjoyable work available to them such that wages are low.

Contributions to the economy (and certainly society in a wider sense) do not always result in market rewards. Some people may contribute a lot in a way that is not recognised by the market—such as charitable work or caring. Additionally, there may be people who obtain a very high income without contributing very much at all—such as those who find a legal loophole which they can exploit to make money.

However, while it is not a universal rule that income goes up for those who act according to each desert base, for the most part the person will be rewarded in the market for their activities.

What I wish to highlight in this blog is that there is a link between market rewards and all of the economic desert bases. The link is sometimes quite weak, since market incomes depend upon supply and demand rather than acts in accordance with desert bases. Nevertheless I think it is important to note this and how this fact should lead us to reassess our views of the desert approach to economic justice.

1.       Has the link caused some to find the pro-market aspect of the desert approach more plausible than it is?

2.       Has the link caused some people who are pro-market to seek to find a desert base that supports their preferred view?

3.       Does the link mean that anti-capitalists who take a desert-based approach to justice should be more pro-market than they are?
and:

4.       Does the link imply that the most plausible desert base will take account of (or make use of) market pricing, though not be identical with it?

Along with these, there may also be other interesting questions that follow from the relationship I’ve highlighted between desert bases and the market. However, I will focus on the fourth of the above in my next blog, where I will construct a more complex alternative desert base which I believe is much more plausible than the approaches I’ve presented so far.

The merits of meritocracy

Most supporters of the desert approach to economic justice are attracted to it because it is entirely meritocratic. People get a share of social goods to the extent that they merit them (according to the relevant, though inevitably controversial, desert base chosen from those described in my previous blog).

Meritocracy appears to lend itself to the free market in some ways but not others. In common with pro-free-market entitlement theories of justice such as libertarianism, workers should get the product of their efforts. Taxes on labour are to be avoided and the free market in the field of production should be encouraged (or replicated if the economy is a command rather than market-based one).

However, in other areas desert theory is diametrically opposed to free-market entitlement theories. According to libertarianism people should be able to give away their resources to others without interference. However, recipients of gifts and inheritances have not done anything *and should not therefore receive this. Any resources not used by the deserving recipient should be returned to the social pot for distribution to the deserving.

Meritocracy is preferable to libertarianism because it links income to what the individual does rather than the vagaries of their family fortune. However, I would still question whether meritocracy is really that meritocratic. Family background could still play a role in a desert-based economy as some parents will be more nurturing than others. People also have different natural talents which they can utilise in the labour market to earn more than others, with the further issue that all sorts of pieces of good fortune can make a huge difference to people’s lifetime earnings. The person who gets a particular experience or opportunity might make the most of it, but the people who missed out on it would have made the most of it as well if they had the chance.

Economic desert bases

People who complain that society "gives x more than they deserve" and "gives y less than they deserve" presumably have some basis for making this judgment. We can take this question one step back and ask the underlying basis for this. We call this the desert base.

Essentially, a desert base is the underlying thing which determines what people deserve. For winning the best leading actor oscar the base is providing the most impressive acting performance in an eligible film. However, where it comes to economic desert agreement about the ideal base is lacking.

The three most commonly cited desert bases are:

·         Effort (people who work hard deserve more than the lazy)

·         Contribution/Productivity (people who make a larger contribution to society should get more)

·         Compensation (people who give up more should get more)

However, there are problems with each of these bases:

To reward people for the effort they make opens the question as to what activities should count as ones which efforts count. If I put a lot of effort into playing football with my friends this presumably doesn’t mean I deserve as much as someone who works hard as a paramedic. However, does this mean that the professional footballer is also undeserving? Presumably there would have to be a threshold at which point people’s activities become ‘work’ and thereby qualify them as deserving.

But this means that a particularly hard working lower division footballer is as deserving as a premier league one. Perhaps they are, but this raises further concerns about the incentives that such a system creates. If only your efforts determine your rewards then this reduces the pressure to increase productivity or for people to do work that they are more suited to—natural footballers would be better off playing rugby and vice versa so that both are putting in extra effort. Indeed people might find the work they would be best at easier and taking that work might make them worse off.

To reward people according to their contribution, on the other hand, would provide very good incentives for people. Someone who provides goods and services that are more valued by others (according to how much they are willing to pay for them) will receive more. One major concern with this is that it does not seem fair to reward people according to their productivity. Some people are more naturally talented than others and such people would be able to contribute more than others.

The third prominent approach could be seen as a solution to the two problems above. By providing people compensation for their activities in the name of the social product this would seem to take account of the effort that people put in but also allows for further sacrifices that people make that do not fall under the heading of effort. So someone who takes a particularly risky (though not otherwise taxing) job might be deserving of greater reward. It gets around the talent issue to a degree because people who find a job easier due to their talent would deserve less than their colleagues who find it difficult.

However, the compensation approach still shares a lot of the issues with the effort approach. People who suffer more for the economic produce because of their inefficiency would be more deserving than others. This again discourages people from doing work to which they are most suited and from making productivity gains.

Supporters of their preferred desert base can just bite the bullets presented above. However, specifying the potential underlying desert bases can draw out problems that might not occur to those who unreflectively adopt a desert-approach to economic justice.

In the next blog I will present a more fundamental reason to doubt the applicability of desert to economic justice. 

What is desert?

The topic of this series of blogs is the desert-based approach to economic justice. Put simply this approach says that economic resources should be distributed to individuals in accordance with the relevant facts about them.

One way to further distinguish desert-based theories is to say that they imply a notion of pre-institutional desert. After all, all approaches to economic justice will allow a judgment of whether a particular individual has received what they deserve. However, for these other theories the judgment about desert is a secondary one.

For institutional claims of desert the assertion that people deserve x is derived without reference to desert. In pre-institutional theories of desert, on the other hand, desert is itself the basis of the judgment of justice.

People can make use of the notion of desert in all sorts of situations, for example “the team who trained hardest deserved to win the tournament” or “the student who studied very diligently deserved to obtain the highest mark.” Where the institution defines the desert there is no controversy because the person deserves what the institutional rules say what each should obtain. Similarly, in cases where there is a clear basis for the activity—such as being able to play a piece of music accurately but expressively—then we can rank people’s deservingness of prizes in accordance with their performance.

If we have an underlying notion of desert that readily tells us what everyone in society should get then this would be a very strong basis for fairly distributing resources. Desert theory therefore needs to answer two questions a) what is the proper basis underlying economic desert claims? and b) how can this basis translate into a monetary amount? I will consider these issues in my next two blogs.

On desert (1/1)

I have long wanted to blog about economic desert and I am finally getting around to doing so. I would love to write an academic paper about this but a blog series should be less time-consuming and have a wider potential audience.

Sometimes people complain that they or others have not received what they deserve. It is a more common complaint from right-wingers, who sometimes claim that entrepreneurs and high-earners lose out on what they deserve due to taxation. On the other side, left-wingers will claim that working people do not get what they deserve for their time and efforts.

Not many political philosophers advocate a desert-based theory of economic justice for reasons I will describe in a later blog. However, some of those who do have a more sophisticated position than the unreflective cries of unfairness outlined above. David Miller is one such prominent thinker, and he advocates a form of market socialism whereby worker-owned firms would compete in a marketplace and the workers would get the benefits of the work they do.

In this series of blogs I will explain the desert-based approach to justice and outline why it is considered attractive and yet problematic. I will then suggest a new way of linking desert and the market that would, I believe, provide the most plausible theory of economic desert.  I will conclude by highlighting how this would fit very well with my CLIPH-rate tax proposals.