Timeline for An oversimplified model for optimal distribution of wealth
Current License: CC BY-SA 4.0
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| Aug 6, 2022 at 19:42 | comment | added | Steven Landsburg | Though.....on second thought, I did once write a paper that took account of something like this "ideological cost", where I assumed that ideology, or something like it, entered people's utility functions, so that a redistribution away from you would detract from your utility because it takes away some of your income, but might also either add to your utility or detract further from your utility if you happen to like (or dislike) living in a world with a lot of redistribution, independent of how it affects you. A copy is here: landsburg.org/papers/norm.pdf . | |
| Aug 6, 2022 at 19:37 | comment | added | Steven Landsburg | I do not see a useful way to try to quantify this "ideological cost", but of course the world is full of good ideas I haven't thought of. | |
| Aug 6, 2022 at 18:40 | comment | added | Maximilian Janisch | Is there any literature on quantification of this "ideological cost", or is it a bad idea to try and quantify this to begin with? | |
| Aug 6, 2022 at 18:40 | comment | added | Maximilian Janisch | I understand it this way: The "cost of redistribution" in your second paragraph is that the planner is restricted in its dictation of consumption rights/working requirements, since if those are chosen wrongly, people in the population will "cheat the system" by faking their talent. This is a very interesting quantification of cost of redistribution! What I originally thought of, however, was an "ideological cost", in the sense that it is a violation meritocracy to redistribute wealth that was earned through a free market system. | |
| Aug 6, 2022 at 18:22 | comment | added | Steven Landsburg | The cost of redistribution is that it disincentivizes production. This cost is assumed away in the first version of the model, where the planner knows everyone's productivity (so knows how much everyone should work at the optimum) and had full dictatorial powers (so he can require that optimal outcome). In the second version of the model (i.e. the last few paragraphs of my post), the cost of redistribution is central, because it constrains the planner to choose an outcome in which people will participate voluntarily. Therefore total utility is lower in the second version. | |
| Aug 6, 2022 at 17:19 | comment | added | Maximilian Janisch | Thank you for this highly interesting answer! It doesn't quite answer my question because, as you say, wealth distribution is assumed to be costless throughout your model (which is an assumption that I am trying to replace by something more realistic). | |
| Aug 5, 2022 at 23:38 | history | edited | Steven Landsburg | CC BY-SA 4.0 |
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| Aug 5, 2022 at 19:45 | history | edited | Steven Landsburg | CC BY-SA 4.0 |
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| Aug 5, 2022 at 16:47 | history | answered | Steven Landsburg | CC BY-SA 4.0 |