The images of indignation are everywhere — street protests in Greece, Italy, Spain and, of course, our own Occupy Wall Street movement. The underlying rationale for the indignation seems to be some amorphous concept of social justice and demands for redistributive policies by a redistributionist state. President Obama expressed similar sentiments in his State of the Union address.
Since principles of distributive justice guide the allocation of the benefits and burdens of economic activity, the subject is worth exploring beyond political platitudes and sound bites. A defining concept, and philosophically necessary premise, of redistributive justice is that, as individuals we did nothing to deserve our inborn talents. Thus, we are not morally entitled to all the benefits we could possibly receive from employing our talents.
The protesters' emblematic term "redistributive justice" implies that some force (God, government, the market system, etc.) used erroneous criteria to distribute goods, and the erroneous distribution must now be redistributed using different criteria.
But why? Our natural endowment of talents breaks no law and does not violate anyone's rights. Moreover, an accepted concept of justice holds that a distribution is just if that distribution came about by legitimate means.
Clearly, if wealth is acquired using unjust means, the individual or entity is not entitled to those holdings and a rectification is called for. But if wealth is acquired justly, what exactly is the principle under which justly acquired holdings are to be seized?
In the early 1970s, Harvard University professor John Rawls, one of the major thinkers in the North American tradition of liberal political philosophy, sought to reconcile freedom and distributive justice by offering an understanding of "justice as fairness." Rawls argued that social and economic inequalities are to be rearranged in some configuration or pattern (such as equality) so that they are of the greatest benefits to the least-advantaged members of society.
Not so, retorted fellow philosopher Robert Nozick. Patterned principles of distribution are morally arbitrary and incompatible with liberty. The state would have to continually intervene with our freedoms in order to preserve any distribution pattern. Nozick underscores the Kantian principle that individuals are ends and not merely means and likens taxation of income with servitude.
Income taxes, a favorite tool of those demanding redistributive policies, are arguably a form of forced labor or servitude. Imagine a person who works extra hours to earn cash in order to pursue happiness in some activity that requires cash (e.g., going to the theater). Imagine another person who elects to use the extra time on leisure activities that do not require cash (e.g., watching the sunset).
What is the difference between seizing the second person's leisure and requiring some uncompensated social work, which would clearly be forced labor, and taking the first person's income? Appropriating the results of someone's labor is equivalent to seizing hours from that person. It gives others a fractional property right in the person, i.e., servitude.
Redistribution can only be accomplished by violating individual rights and cannot be maintained without interference with our liberties. Any distribution of holdings would immediately begin to break down as individuals choose to save in different measures, or to exchange goods and services with each other. Continuous interference would be necessary to take from some person the holdings that others chose to transfer to them. Redistributive justice requires the appropriation of our actions by some Leviathan.
There are other taxation mechanisms, such as consumption-based approaches, that are both more economically efficient, and less dependent on the repulsive notion of servitude. These can be designed with features such as exceptions or pre-bates that avoid regressive effects on lower income levels and are, in fact, progressive at higher income levels. Also, if the goal is to penalize the wealthy, taxing income misses the target. Taxing income penalizes those currently working and producing — hoping to become rich — not the accumulated wealth of the moneyed.
Taxing consumption offers a better way to finance government needs. Unquestionably, we all want to live in a just society. But justice is not to be found in a given distribution of holdings predetermined by the state. Justice lives in the underlying principles generating the distribution.