Continuing the oddity...

[Ted King]

Maybe it's something in the air, but this weekend two of the bloggers I read regularly both had postings about distribution of income that fit somewhat into the nature of the questions I asked above:

Kevin Drum riffs on a posting by Matthew Yglesias:

Original Matthew Yglesias posting here:
http://www.slate.com/blogs/moneybox/2013...ncome.html

Drum:
http://www.motherjones.com/kevin-drum/20...rules-game

[ Yglesias:]
It takes an awful lot of politics to get an advanced capitalist economy up and running and generating wealth....You go through the trouble of creating advanced industrial capitalism because that's a good way to create a lot of goods and services. But the creation of goods and services would be pointless unless it served the larger cause of human welfare. Collecting taxes and giving stuff to people is every bit as much a part of advancing that cause as creating the set of institutions that allows for the wealth-creation in the first place.

The specifics of how best to do this all are (to say the least) contentious and not amenable to resolution by blog-length noodling. But the intuition that there's some coherent account of what the "market distribution" would be absent public policy is mistaken. You have policy choices all the way down.

Matt's argument is a common one, and I've seen it made dozens of times in various ways. What's more, it's an argument with a lot of force. It really is true that income distribution depends on the rules of the game, and it can favor the rich or the poor depending on who sets up the rules. There are practical limits to how much you can muck with the rules and keep your economy humming along, but within these limits there's nothing inherently natural about one set of rules vs. another.

So here's the thing to noodle on. Despite having seen this argument made dozens of times, and despite its obvious force, I've never really seen it made in a way that's very persuasive at a gut level. Conservatives have done a very good job of convincing the public that rules which favor the rich really are the most natural ones, and you fiddle with them at your peril. Liberals, conversely, haven't done a very good job of convincing the public that a different, less business and wealth-centric set of rules, would be equally natural, and would benefit more people.

What they say seems to hinge quite a bit on this claim:
"It takes an awful lot of politics to get an advanced capitalist economy up and running and generating wealth....You go through the trouble of creating advanced industrial capitalism because that's a good way to create a lot of goods and services. But the creation of goods and services would be pointless unless it served the larger cause of human welfare."
[I think it's important to keep in mind the full context for that quote - so as to more fully understand its intended implications.]

I think that claim is true, but I suspect that some or many conservatives would disagree (libertarians would almost surely disagree). I think that a discussion on this claim could be fruitful.