Three Theories of Distribution

​Markets are not very neat and tidy. They are smelly, chaotic and full of poor people hustling for their next dollar, selling produce for slim profits that will never bring them closer to the salaries earned by bankers. 

​If poor people rely on free markets, alas they will never catch up with Bill Gates in terms of becoming actual billionaires within their lifetime. We need faster methods of reducing inequality. Markets are too slow. Who has time for that. So, we need to speed up this redistribution ideal we're aiming for. Let’s begin by reflecting on three preliminary questions: three theories of distribution.

​First, it would be great to be able to persuade wealthy capitalists that giving up their excessive pay is the right thing to do so that we can all be more equal. Also, there's an implied threat hidden in this suggestion, namely that if they don't comply then we'll end up with French Revolution conditions. Something tells me they still won’t be happy, but if the rest of society can gang up on them we will at least outnumber them, and then we can shout louder than them. This is what academics call ‘a theory of bargaining’. We redistribute stuff not by voluntary agreements in an open market, but by banding together in gangs and then metaphorically bashing the other guys over their heads. The key to winning the bargaining war is being stronger, either in numbers or in funding. This is how well-funded lobby groups achieve their goals. It works quite well.

Second, how shall we fix wages? It’s clear that we can’t just pay the hospital cleaner as much as the surgeon. Not literally as much, anyway. If their wages must be fixed at different levels then we have to figure out how to do that in a way that moves us closer towards our ideal of total equality. Starting from where we are today it’s obvious that we must pay the cleaner more and pay the surgeon less, but we still need to fix the dollar figures and that’s not as easy as you’d think. This is what academics call ‘a theory of pricing’. If we let competitive markets fix prices it doesn’t end well, because the surgeon comes away overpaid and the cleaner comes away underpaid. No, competitive markets don’t produce Fairness or Equality. Ultimately we need a government office to be set up to fix everybody’s wages. This is not as attractive as the bargaining proposal I outlined earlier, but it’s better than nothing.

Third, we need some kind of surplus to keep as a Redistribution Pot available for those who are not working at all. Some people have good reasons for not working (sickness or disability); others have bad reasons (too darn lazy); others have no reasons at all, they just never got round to finding a job as there was always something interesting on the telly that they were busy watching. Regardless of the reasons, we must keep levying taxes to support all those who are not in work, and it’s really hard to tax working folks when they haven’t got a single penny extra (not impossible, but just hard). To achieve this, all working people must be forced to be more frugal and save more. That way, when they’re overtaxed, at least they will have savings to fall back on to feed themselves. This is what academics call the ‘saving for a rainy day theory’.

The saving theory is the best of the three. Saving is very character-building so it’s justifiable to force people to have sufficient savings to maintain themselves when we cream off their extra pennies to feed the tax machine. For sure, people have to be forced to save because otherwise they go out and spend all their money on nonsense and frippery. Maybe we could pass a law saying that all shops purveying items classified as nonsense and/or frippery must be closed on evenings and weekends, so they don’t tempt working people to spend money that they should be saving. You can see now why the saving theory is probably best. It involves passing new laws. The more laws we have, the more ideal our society will become.