One of the most successful memes of the right in the last decade or so is that redistribution is the politics of envy. Of course politicians have to appeal to the emotions, and they have to appeal to all denominators including the lowest common ones. Well they don’t have to and there are limits, but if you’re in favour of progressive taxation it’s asking too much of a democratic politician to expect them not to point out to those at the bottom of the pile that those further up are doing better than them.
But it seems that so high minded am I that I never thought of this as the politics of envy. I thought of it as part of a long and distinguished sensibility of modern reform which, as it turns out is supported with remarkable uniformity by the great economists, from Smith through Mill, Marshall, Pigou and Keynes. That world is disdainful of the value of the “baubles” of power and wealth. Smith was particularly vigorous on the subject, indeed, making irrational hankering of the rich and powerful for baubles one of the major engines of the decentralisation of economic and political power in Europe.
But for all of them, the utility benefits of income encountered strongly diminishing returns once a degree of comfort had set in. As Marshall and Pigou were at pains to point out a dollar to a poor person meets more urgent needs than a dollar to a wealthy one, or to put it another way (which Marshall and Pigou did), other things being equal, dollars going to the poor are a more efficient use of dollars – in achieving the ultimate output (which got called ‘utility’) than dollars going to the wealthy. (Oh, and of course they would have understood the point that other things are not equal, and that paying money to poor people can have incentive effects, so then one would pursue some joint optimisation problem of optimising utility subject to undesired incentive effects.)
This whole perspective was one that was shared by many reformers in my father’s generation. For me one of the touchstones of it in individual conduct is attitudes to classes on airlines. Why would you want to sit in business class? Well the seats and food are nicer, but for three times the price of an economy fare? Are they that nicer? Further there’s something a tad awkward about lording it over others by sitting at the front of the plane. Some people who could clearly afford it don’t fancy it. The great billionaire philanthropist Chuck Feeney doesn’t like flying up the front of the plane as he travels the world giving his money away. That’s not like Cardinal Pell, the apostle of Christ for whom business class is not adequate. He travels first.
And in the 1980s and even the 90s I think there were a few politicians who travelled economy class. I think Peter Walsh was one of them. I wonder if any do today. How do the Greens travel? Even by the time I got to the Productivity Commission – then the Industry Commission in 1993 – I’d say maybe 15 odd per cent of the staff entitled to travel business class travelled economy class. I doubt there’d be many there now, but I hope I’m wrong. I recall one Commission meeting where we were encouraged to travel business class.
In any event I came across this post on Alfred Marshall today and its quotes from Marshall reminded me of some of his own aspirations about wealth, and they’re worth sharing here:
The truth seems to be that as human nature is constituted, man rapidly degenerates unless he has some hard work to do, some difficulties to overcome; and that some strenuous exertion is necessary for physical and moral health. The fullness of life lies in the development and activity of as many and as high faculties as possible. There is intense pleasure in the ardent pursuit of any aim, whether it be success in business, the advancement of art and science, or the improvement of one’s fellow-beings. The highest constructive work of all kinds must often alternate between periods of over-strain and periods of lassitude and stagnation; but for ordinary people, for those who have no strong ambitions, whether of a lower or a higher kind, a moderate income earned by moderate and fairly steady work offers the best opportunity for the growth of those habits of body, mind, and spirit in which alone there is true happiness.
There is some misuse of wealth in all ranks of society. And though, speaking generally, we may say that every increase in the wealth of the working classes adds to the fullness and nobility of life, because it is used chiefly in the satisfaction of real wants; yet even among the artisans in England, and perhaps still more in new countries, there are signs of the growth of that unwholesome desire for wealth as a means of display which has been the chief bane of the well-to-do classes in every civilized country. Laws against luxury have been futile; but it would be a gain if the moral sentiment of the community could induce people to avoid all sorts of display of individual wealth. There are indeed true and worthy pleasures to be got from wisely ordered magnificence: but they are at their best when free from any taint of personal vanity on the one side and envy on the other; as they are when they center round public buildings, public parks, public collections of the fine arts, and public games and amusements. So long as wealth is applied to provide for every family the necessaries of life and culture, and an abundance of the higher forms of enjoyment for collective use, so long the pursuit of wealth is a noble aim; and the pleasures which it brings are likely to increase with the growth of those higher activities which it is used to promote.
When the necessaries of life are once provided, everyone should seek to increase the beauty of things in his possession rather than their number or their magnificence. An improvement in the artistic character of furniture and clothing trains the higher faculties of those who make them, and is a source of growing happiness to those who use them. But if instead of seeking for a higher standard of beauty, we spend our growing resources on increasing the complexity and intricacy of our domestic goods, we gain thereby no true benefit, no lasting happiness. The world would go much better if everyone would buy fewer and simpler things, and would take trouble in selecting them for their real beauty; being careful of course to get good value in return for his outlay, but preferring to buy a few things made well by highly paid labour rather than many made badly by low paid labour.