Redistribution and its travails

The effects of industrialisation, rapid urbanisation and the rise of an impoverished urban proletariat in the 19th century demonstrated that market outcomes generally produce inequality, which can become hereditary and thereby become the breeding ground for radical egalitarian movements – Marxism being the most obvious. This provided a powerful incentive to upgrade the role of the state as preemptive redistributor.

Against this background, we can identify the emergence of the redistributive state - one of the defining features of the modern welfare system. The way in which this function was carried to its extreme by Soviet-type systems illuminates the dos and don’ts of redistribution. But democratic states have also taken on functions in the regulation of society that are far more intrusive than was regarded as compatible with 19th century ideas of individual liberty. The 20th century evolution of civil society, lobbies, pressure groups, advocacy bodies, NGOs and the like can operate as a countervailing force, but only to some extent. Ultimate power resides in the state and with those who run it, except that the exercise of ultimate power is exceedingly rare - overwhelmingly it arises in a state of emergency or warfare.

The state as rational redistributor arguably has its origins in Hegel’s idealised concept of the state. The difficulty lies, however, in the very assumption that the state is the supreme embodiment of rationality, that all states are alike in this regard and that there is such a thing as a hyper-efficient state administration that has no interests of its own. This is a Platonic concept that ignores the sociological reality that all institutions develop interests of their own at variance with their ostensible purpose, in the course of which the maximisation power by the state bureaucracy evolves almost invariably. Platonic bureaucrats are an unknown genus. The constant striving by bureaucracies to establish their autonomy over society is the norm.

So contemporary developed societies are stuck with an imperfect state machinery that resists attempts to curb its power. All this greatly muddies the role of the state as rational redistributor, which at the end of the day is one of the chief sources of state power legitimacy and is a central area of politics. The problem of how, how far and with what aim the state should redistribute, should it target equality of outcomes or of opportunity become central to politics, together with the constraints on freedom and the levelling down that can occur. These can produce social dissatisfaction, just as market inequality does. The state is not an ideal arbiter of fairness, but there is no other.

One can conceptualise improvements to the functioning of the state by, say, promoting a public service ethos, that insists on high levels of trust and incorruptibility. This becomes vital where policing the sensitive boundary between the public and private is concerned, for this interface is particularly vulnerable to corruption. Public money may be the taxpayer’s, but it is also impersonal and the potential for abuse is limitless.

But the problem does not end there, however. Society has to accept that its money – the resources, the raw material that is redistributed – goes to those whom they recognise and accept as legitimate beneficiaries (and this where this post ties in with “The Revolt of the Rich”, 4 August). Who decides on the identity of the beneficiaries? Politicians, bureaucrats and, for that matter, opinion leaders have tended rather to neglect this issue or have rather taken it for granted. Should redistribution be restricted only to taxpayers, only to citizens, or only to members of the community of cultural intimacy, because these last are the people whom we trust and regard as “deserving”?

The definition of the community of cultural intimacy then becomes pivotal. Habermas’s constitutional patriotism (Verfassungspatriotismus) has never been sufficient to function as a cement for the increasingly diversely made-up societies of today, above all because the citizenship that is derived from it is “cold”, it lacks the underpinning of affect generated by shared symbolics and a shared past. And those who do not share in these, but are “only” law abiding taxpayers may not be accepted as equal members with equal entitlement, especially if they demonstrate that their loyalties are partly external to that community.

Hence large numbers of immigrants can erode these criteria of cultural intimacy and trust, because the stranger in our midst remains a stranger. Maybe this should not be the case, but that’s just confusing the sein and the sollen, normative with the substantive. And when trust in the state declines, and this has been palpable throughout Europe for decades, then other instruments like transparency and accountability are demanded and that initiates a competitive stance between state and society. That in turn intensifies the “cold” qualities of the state-society relationship, and the latter’s reluctance to accept more redistribution is strengthened.

One way out if this is to withdraw the state from redistribution as far as it can be done and to let the market take over. The trouble with that, as we can see from the experience of the states that have tried it, is that the outcome is a devastating inequality*, as in the UK and the US, which then further weakens the bond between society and state, because the state has withdrawn from its role as the arbiter of fairness. It hardly needs to be added that the market functions very badly as a primary distributor by any set of criteria that take equality seriously, whether that is the equality of citizenship, equality before the law, equality of voice, equality of risk assumption or equality of material benefit.

So we are left with the old dilemmas of the state and the politics of redistribution as evolved in the last century or so. This moderate and circumscribed role for the state is probably the least bad option.

Sch. Gy.

Reference

* Richard Wilkinson and Kate Pickett, The Spirit Level: Why Equality is better for Everyone (London: Penguin, 2009).