Redistribution Essay
tl;dr? listen to the audio version instead ;3 :
The Current Course of the United States :
Redistributive Economic Ideology in Education and Welfare
(A biased review of the literature)
Joseph Fournier
PSY6020
2010/12/18
In this paper I will demonstrate that the opinions of American voters on economic redistributive policies are largely misguided, and attempt to explain some of the inconsistencies that have arisen in our perceptions. I will be considering redistribution primarily in terms of public education and welfare, both of which require relatively high progressive taxation to be effective or feasible.
Esping-Anderson’s (1990, as cited by Svallfors 1997) study examined eight western democracies, and split them into several groups based on their socioeconomic policies. The study clearly demonstrated that social democratic states normalize per capita income most effectively, while the liberal states have the highest degree of economic disparity. Although this is in itself unsurprising, Svallfors (1997) showed that these policy differences have no measurable effect on overall growth. This suggests that any claim as to the dangers of redistributive policies in a democratic society is without factual support. But, this analysis of overall growth is overly simplistic, and may actually be damaging our actual development. It is quite possible that the through the careful development of fresh regulatory methods we may have the potential to create an economic machine that is, beyond granting increased equality and parity, also more efficient. I feel that the only way to determine this is through the further study of empirical data, and perhaps even a degree of careful experimentation. Not convinced? I wasn’t either, until I started to look at the data a little more closely.
Benabou and Ok (2001) performed a statistical analysis to determine the possible explanations for voting behavior relating to redistributive policies, focusing in particular on the POUM (prospect of upward mobility.) The basis for this study was, in line with rational choice theory, that social conservative citizens whose income falls below the mean tend to expect either their, or their progeny’s, income to raise above the mean in the future. This cannot possibly be true for the majority, and yet it is the majority belief. This is due in part to the myth (my reasons for selecting this word will soon become clear) of social mobility in our society. The study did conclude however, that while a majority of underclass actors held this belief, its’ influence on their policy decisions was secondary to their notions of social-insurance, that is to say that their voting behavior is primarily guided, whether consciously or intuitively, by the desire to maintain sustainable economic growth, and thus create long term economic benefits. The problem with this, of course, is in the underlying assumption that socialization and economic parity measures hinder growth. The combined results of this and the Svallfors (1997) studies seem to indicate something akin to a Marxist “false-consciousness” in voter perception of the actual rates of social mobility, and of the supposed negative consequences of welfare.
“Inequality and Mobility” (Hassler et al. 2007) describes the negative relationship between inequality and upward inter-generational mobility, along with the positive relationship between social mobility and education in a society. Simpson (1990, as cited by Hassler 2007) demonstrated a similar relationship between equality and education. The Hassler study documents that countries where there is an increased emphasis on public education exhibit a higher level of upward mobility; subsidies for tertiary education correlate directly with wage parity. The data shows social mobility in the US is the lowest of the seven countries sampled, and wage disparity is the highest.
Traditionally, American conservatives have argued against socialist policies by pointing to higher unemployment rates or “unfairness” evident in countries like France or Germany; however, our current levels of unemployment are no longer enviable in the western world. Furthermore, a simple glance at our pitiful levels of social mobility and wage disparity makes one wonder whether such arguments against the unfairness that is supposedly inherent in socialist policies are anything but absurd. Considering current trends in wage disparity, social mobility, and our overall economic condition make it seem that the future of the “American dream” is grim at best. Meanwhile our more liberal neighbors have working welfare systems for the long term unemployed, healthcare for all, and much healthier wealth distributions. Where did we go wrong?
Hassler is careful to draw attention to other studies documenting unsuccessful welfare legislation: States such as Italy occasionally have a higher level of wage parity (and a significantly lower per capita income), but a lower level of inter-generational mobility. Hassler is also careful to draw attention to how the execution of social welfare philosophies in Italy differs from states examined in his study, which he describes as being only superficially similar. Hassler’s model’s calculated bias for education subsidies, as opposed to a general glance at a state’s welfare system as in the Svallfor study, accounts for many of the difference we observe. Italy’s yearly spending on tertiary education accounts for only 0.78% of its’ GDP, far less than many other western states. Of course, we in the US only spend 0.8%, (2006, OECD report) so we don’t have a lot of room to criticize. Looking at private expenditure (for tertiary education as a function of GDP) reveals that we are trailing far behind our democratic neighbors. It is easier to compare our total public expenditure to China than to Europe.
Lane’s 2001 study examines the reasons behind public opinions of economic policy in the context of the inequality of the post-modern west. One of the more interesting conclusions he develops is that the idea that individuals are in control of their own economic fate works to inhibit redistributive legislation. In fact, Svallfor’s (1997) study shows a relationship between redistribution and social mobility. This means that the American belief in the potential for social mobility leaves us apathetic to the issue of economic disparity, and actually makes upward social mobility less common; it almost seems that our belief in the American dream is destroying the American dream.
Lane (2001) brings up several of the obvious drawbacks that are associated with social democracy. Socialization, when it results in expensive pensions and the like, can result in higher unemployment rates, or so we are told. Our current direction seems to indicate that this is actually irrelevant. Furthermore, he argues that privatized organizations tend to generate higher profits, and monopolies are in-conducive to innovation. There are several obvious flaws in this view. Long term benefits may not necessarily be attained through the same means as the short sighted goals of the corporate world. Furthermore, we find more and more often that critical industries, such as infrastructure, are controlled by private, monolithic organizations; even when there are a significant number of players involved in a particular industry, such as in the case of big oil, competitors often take eachother’s hands in regulating their own agencies through the manipulation of world governments, and through what is essentially price fixing. It gets worse: once these kinds of industrial-economic systems manifest themselves in our world, they tend to dominate the alternatives, involving themselves in hugely expensive PR projects while they inhibit actual technological and economic progress; all in the name of their short term goals.
According to Lane (2001), the belief in the individual control of one’s economic status also has a negative effect on American’s willingness to support measures that would assist the impoverished; many Americans believe that the poor are responsible for their own situation. Lane shows us that this belief in this “just world” is most similar to religious belief; it may very well be true, but there is no empirical evidence to support this notion. Indeed, in the case of social mobility, there is a great deal of evidence that suggests that a person’s socioeconomic fate is almost entirely beyond their control. This blind reluctance to accept reasonable socialist policies in the US is representative of the conservative paradigm. He also brings up stereotype threat as a factor that reinforces the socially conservative beliefs of many lower class citizens; they begin to believe that they earned their impoverishment, which may contribute to reduced upward mobility through affecting class motivation. Brickman et al. and Mitchel et al. (1981 and 1993 respectively, as cited by Lane, 2001) show that the belief in a just world is rarely concrete, and can be influenced to advocate for or against episodic cases depending on how the information is framed. I believe this is evidence for a lack of cognitive sophistication in the masses, as advocated by Converse (1964), but only concerning this particular issue; it may very well change in the future, as more people become aware of the realities of our economic situation.
Taken together, all of this information suggests that our economic policies are determined by mere cultural trends, ebbing and flowing with the tides. It is unfortunate that the education which benefits social parity so clearly seems to have limited influence on peoples’ socioeconomic ideologies; but then, what fraction of university graduates actually has the opportunity to look at this kind data? What about the poorest among us, many of whom aren’t even able to attain a high school education? Considering the enormous mass of literature that demonstrates that the pitiful amount we spend on education pays for itself several times over in tax revenue, and benefits the masses to an even greater extent; why is it so hard for some people to accept that we absolutely must spend more on education if we are to survive?
Lane explores the connection between worldview and willingness to provide assistance to the poor, either personally or socially, in a way that mirrors Monroe (1991), then goes further to juxtapose collectivism with national policy. He compares the world’s economic powers, but the relationship between worldview and economic policy is far from cut an dry: some inconsistencies do arise. There is little correlation between class consciousness and wage parity, and little to no relationship between class consciousness and social policies. Lane concludes that while acting out of self interest, individuals benefit economically in the short term while hindering social development. What he fails to address, is whether or not the long term reduction of social mobility that occurs as a result of these individualistic beliefs can cause harm to an economy. If a small dose of populism improves all of our lives, why not take it into consideration?
Contrary to many of Lane’s claims, Kinder and Kiewiet (1979) place reduced emphasis on the importance of self interest for American voters. While acknowledging that there is a great deal of evidence to support rational choice theories, they point to data collected from 1956 to 1976 concerning voters’ economic condition and how it relates to their voting behavior. I believe that their results stem from the tendency of the American voter to, rather than serving ones’ own immediate interests, or attempting to benefit greater society through one’s vote, attempt to vote in a way that results in short term, but not necessarily immediate, benefits. With the budget as tight as it is today, it is very difficult for us to find the funds necessary for essential programs; but without them, economic collapse may be unavoidable. As Kinder and Kiewiet claim, the average voter strives to maintain the status quo if they believe it will allow them to take advantage of purported economic opportunities in the near future, or attempt to correct issues that have arisen due to changes in the world or the political climate. The inherent belief in the benefits of our system of sketchy semi regulated corporate anarchy, because it has been more-or-less successful in the past, causes us to become ideologically apathetic.
Biblarz (1996) compiled a study of a group of Caucasian American families, examining inter-generational economic mobility, with special attention to gender. He found that while there was a small increase in income and education across classes for males, females were more likely to retain their mother’s socioeconomic status. Although there is an average increase for both genders, the relationship of the sample to the population is minimized by the fact that most of the participants studied were in fact male. Furthermore the groups studied were white Californians, and the fact that this group is not representative of the American population was neglected. Borjas (2006) shows that rates of social mobility for disadvantaged groups in the US, such as our numerous cultural and ethnic minority groups, are much less promising. Most of this literature also fails to address the fact that the cost of living is increasing far faster than the income of the vast majority of our population; the nearly insignificant gains we do observe in the income of privileged white males is overshadowed by a decrease in purchasing power.
Hochschild (1979) confirms the results of the aforementioned studies. Reluctance to adopt redistributive measures stems mainly from the misperceptive and short sighted goals of the self-interested. Bishop (1991) complements Benabou’s study on social conservativism in the lower class by addressing another factor: risk aversion. As in Hochschild’s (1979) study, Bishop claims that the conservative fear of the potential consequences of excessive welfare is the result of fragmented ideological constructs that are rooted in false information. With ultraconservative groups (one in particular, which shall not be named) imbuing a whole generation of lower and middle class conservatives with a terrifying new brand of false consciousness, we have to wonder how we can possibly save ourselves.
The concept that change is infeasible seems to be constrained to a world controlled by those blindly adhering to manipulations and blatant falsehoods, who believe in a flaky and potentially imagined social equality. I will conclude by reemphasizing that the research I have collected suggests that individuals generally have little awareness of the feasibility, benefits, consequences, and even of America’s general opinion of matters relating to economic redistribution. If we are to move forward, we simply must address the numerous problems inherent in the ideological fabric of our society.
Works Cited:
Benabou and Ok. (2001) Social Mobility and the Demand for Redistribution The POUM Hypothesis.
Biblarz (1996) Social Mobility Across Three Generations.
Bishop (1991) Incomplete Information, Income Redistribution and Risk Averse Median Voter Behavior.
Borjas. (2006) Making It in America: Social Mobility in the Immigrant Population.
Converse, P.E. (1964) The nature of Belief Systems in Mass Publics.
Hassler et al. (2007) Inequality and Mobility.
Hochschild. (1979) Why the Dog Doesn’t Bark: Income, Attitudes & the Redistribution of Wealth.
Kinder & Kiewiet. (1979) Economic Discontent and Political Behavior: The Role of Personal Grievances and Collective Economic Judgments in Congressional Voting.
Lane. (2001) Self-Reliance and Empathy: The Enemies of Poverty: And of the Poor.
Monroe. (1991) John Donne’s people.
Svallfors. (1997) Worlds of Welfare and Attitudes to Redistribution.
Meeting of OECD Education Ministers. (2006-06) Higher Education: Quality, Equity and
Efficiency. http://www.oecd.org/dataoecd/30/7/36960580.pdf
©2010-12 Joseph Alexander Fournier
