McCain’s “Redistributionist” Complaint

All government policies redistribute income. So McCain’s complaint is nonsense.

There’s already been lots of sensible pushback against John McCain’s charge that Barack Obama is a redistributionist. At the risk of piling on, here’s another story that illustrates just how bizarre the charge is.

Some months ago, I was asked to join a panel to review The National Council on Economic Education’s curriculum standards for the teaching of essential principles of economics, a task not normally entrusted to Marxists. On a conference call last Friday, the panel debated the Council’s content standards, including Content Standard 16, which reads in part,

There is an economic role for government in a market economy whenever the benefits of a government policy outweigh its costs. Governments often provide for national defense, address environmental concerns, define and protect property rights, and attempt to make markets more competitive. Most government policies also redistribute income.

Discussion focused on a proposal by one of the panel members to change “Most” to “Many” in the last sentence of this standard. I asked whether anyone could think of a government policy that didn’t entail at least some degree of direct or indirect redistribution of income. No one could, which is hardly surprising, since government policies are paid for by taxes and create benefits and costs that generally fall unevenly on different people.

In practice, not every government policy meets the cost-benefit test described in Content Standard 16. But no one could come up with even a single example of a government expenditure—not for a highway guard rail, not for a bridge repair, not for an influenza vaccine, not for any other specific purpose—whose net costs and benefits were exactly equal for each and every citizen.

In short, there is a more plausible case for changing “Most” to “All” than for changing “Most” to “Many” in the last sentence of Content Standard 16. Rather than push the envelope, though, we voted to let the current wording stand.

If all government policies have distributional consequences, it makes no sense to complain that a politician favors redistribution. When John McCain appears on a talk show this Sunday, his interviewer should ask him whether all the policies he’s supported during his years in office that have had no effect on the distribution of income among his constituents. Unless the answer is no, then McCain, too, is a redistributionist.

Author: Robert Frank

Robert H. Frank is the Henrietta Johnson Louis Professor of Management and Professor of Economics at Cornell's Johnson Graduate School of Management and the co-director of the Paduano Seminar in business ethics at NYU’s Stern School of Business. His “Economic View” column appears monthly in The New York Times. He is a Distinguished Senior Fellow at Demos. He received his B.S. in mathematics from Georgia Tech, then taught math and science for two years as a Peace Corps Volunteer in rural Nepal. He holds an M.A. in statistics and a Ph.D. in economics, both from the University of California at Berkeley. His papers have appeared in the American Economic Review, Econometrica, Journal of Political Economy, and other leading professional journals. His books, which include Choosing the Right Pond, Passions Within Reason, Microeconomics and Behavior, Principles of Economics (with Ben Bernanke), Luxury Fever, What Price the Moral High Ground?, Falling Behind, The Economic Naturalist, and The Darwin Economy, have been translated into 22 languages. The Winner-Take-All Society, co-authored with Philip Cook, received a Critic's Choice Award, was named a Notable Book of the Year by The New York Times, and was included in Business Week's list of the ten best books of 1995. He is a co-recipient of the 2004 Leontief Prize for Advancing the Frontiers of Economic Thought. He was awarded the Johnson School’s Stephen Russell Distinguished teaching award in 2004, 2010, and 2012, and its Apple Distinguished Teaching Award in 2005.