Redistribution and selfishness

Abstract

One of the disadvantages of redistributive taxation is that it reduces people’s financial incentives to increase national wealth and benefit others by engaging in productive activities. It is natural to suppose that the severity of this disadvantage will be proportional to the socially prevailing level of human selfishness. Thus several advocates of redistribution (G.A. Cohen, Ha-Joon Chang among others) have argued that this disadvantage of redistribution need not be as severe as critics often suggest, because human beings need not be so selfish. My aim in this paper is to argue that, even in a society entirely composed of unselfish and impartially beneficent individuals, redistributive taxation would still discourage activities that contribute to national wealth, because differing individuals have different views about what counts as benefiting themselves and others. I also relate my discussion to G.A. Cohen’s influential ‘camping trip’ argument for socialism (from Why Not Socialism?).