Is the Libertarian Case Against Income Redistribution Flawed?

by Don Boudreaux on April 26, 2010

in Inequality, Taxes, Work

Robert Frank ranks, in my mind, as one of today’s most interesting and thoughtful economists.  But sometimes he makes arguments that are so weak as to be baffling.  For example.

Robert Frank argues that the libertarian case against income redistribution “falls on its own terms.”

He rests his argument on the fact that in private markets the most-productive workers in a firm generally accept wages that are somewhat below these workers’ productivity levels, while the least-productive workers in that same firm are paid wages that are somewhat higher than these low-productive workers’ productivity levels.  Frank describes this situation as one in which private employers “transfer large amounts of income from the most productive to the least productive workers.”  Because such “transfers” occur voluntarily in private markets, Frank thinks that libertarians’ objections to income transfers carried out by government are self-contradictory.

What a weird and dangerous argument.  Just because something is done voluntarily doesn’t mean that objections to the state doing more of that something are without merit.

Would Frank argue, say, that libertarians’ objection to government censorship “falls on it own terms” because people are forever privately censoring speech?  I, for example, don’t allow students to disrupt my classes with perorations, and I prohibit guests in my home from discussing inappropriate topics.  Is my libertarian case against government censorship, then, inconsistent?  Should I cast aside as irrational my fear of government censorship?

I’m pretty certain that Frank would not infer from the many instances of private ‘censorship’ a strong case for government censorship.  Yet the logic of each case is identical to the other.  (Or, as Frank Stephenson e-mailed to me: “By Robert Frank’s logic, the more I give to charity the more I should be taxed.”)


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