Thursday, February 18, 2016

Robin Hood Travels Through Time

By Neil H. Buchanan

"We must change policy X for the good of our children and grandchildren!"  "Future generations are depending on us to do the right thing!!" As frequent readers of Dorf on Law know, much of my time over the past several years has been devoted to trying to understand what motivates such calls for intergenerational justice.  Philosophers have not reached agreement on whether there is any obligation at all from one generation to another, and even those who are willing to say that such an obligation does exist have not been able to articulate even the beginnings of a framework to determine who owes what to whom.

Several years ago, the George Washington Law Review organized a symposium on the question of intergenerational justice.  Included in that volume is my original paper on the subject, What Do We Owe Future Generations?, along with responses to my paper by four scholars who generously engaged with the ideas laid out therein.  (Other papers in the volume include one by frequent Dorf on Law contributor Professor Robert Hockett.)  I argued that intergenerational framing is morally incoherent, and that the proper concern is the standard distributional question of rich versus poor.  That does not mean that we should only care about current people and ignore the future.  Quite the contrary.  We should care about improving the lot of poor people whenever they live, now or in the future.  And we should redistribute resources to those poorer people from richer people, whether they are alive now or in the future.

This was, I thought, a rather provocative position.  The idea that we should simply reject "justice between generations" as a proper framing of the question is not the consensus view, to say the least.  Even though I remain comfortable with my argument in that paper, it still strikes me as counter-intuitive.  Interestingly, however, one of the commentators on my paper took some of my arguments and ran with them in an even more provocative direction.  Professor Lawrence Zelenak of Duke Law School argued that, although my moral argument would still stand even if average living standards were not predicted to rise in the future, I had made something of a big deal in my paper of the spectacular rise in living standards that is implied in even the most pessimistic long-term economic forecasts.  For example, the Social Security Trustees' 75-year forecasts are frequently cited as proof of fiscal doom, but they actually show that inflation-adjusted living standards are likely to more than triple in the next 75 years, and they could more than quadruple under very plausible assumptions.  (Even the low-end scenario involves more than a doubling of living standards in that time period.)

Zelenak's move was to ask, in essence: What if we ignore Buchanan's argument that we should not try to redistribute between generations, while taking seriously his call for liberal egalitarian redistribution from rich to poor?  If future generations are predictably going to be much richer than current generations, should we not actively redistribute from the rich to the poor by deliberately engaging in policies that take from the future and give to the present?  If Robin Hood were a time traveler, would he not look at people in 2016 and 2091 and ask, "How can I in good conscience not help these poor early-21st-century wretches, when their great-grandchildren have so much?"

I thought of Zelenak's question recently in a much more prosaic context.  (I should emphasize that Professor Zelenak was neither endorsing nor rejecting the implications of his formulation.  He simply wanted to raise the issue.)  In a recent opinion piece in The Washington Post, the liberal economist Jared Bernstein argued that Republicans' plans for root-and-branch tax reform were foolish pipe dreams, not only because the politics would be impossible but because the payoff from any of those grandiose plans would be so minimal.

All of the Republicans' plans rely on the magic of tax cuts, especially tax cuts for the rich, to significantly increase growth.  Bernstein quotes a paper by some Urban Institute economists: "At the federal level, there is virtually no evidence that broad-based tax cuts have had a positive effect on growth…That has been amply demonstrated at the national level, where tax cuts have eroded revenue without discernable effect on economic activity."

This is hardly news.  Back in 2012, I wrote a Verdict column summarizing the astoundingly weak case for the proposition that tax cuts increase economic growth.  For anyone actually paying attention to the empirical literature, it is obvious that tax policies have had minimal-to-zero effects on economic growth.  It is only because of lingering Laffer Curve-ism and the allure of believing that economic growth will make everything easily affordable -- a problem widespread among Republicans, but unfortunately now showing up in the Sanders campaign in a different form -- that we still see so much effort to convince people that tax cuts are game changers.

This, in turn, raises an even more provocative possibility.  If we take Zelenak's logical extension of my argument seriously, we would want to enact policies that would reduce future living standards in order to increase current living standards.  But is that even possible?  The usual argument about tax cuts and government spending increases for non-rich people is that such deficit-increasing policies will hurt future generations, so we should not give into temptation to live in the moment.  My argument, then, amounted to saying that we can afford to indulge our desire to help current poor people, because the people we are taking money from will have a higher ability to pay, which is the essence of the standard distributive justice argument.

But what if that is simply not the way things work?  What if efforts to improve distributive justice today could be successful, yet they would not cost future generations anything in terms of living standards?  Indeed, what if bequeathing to the future a more equal society is itself a moral imperative, so that redistribution today is not merely a matter of helping current generations but future generations, too?

Of course, there are plenty of other ways to destroy the economy.  Getting into an ever-expanding series of endless wars can drain the economy's resources and its ability to grow.  Destroying the environment can make future commerce much more difficult to transact, and it can divert resources to protecting population centers from natural disasters.

Yet none of these policies are on the progressive agenda.  The idea, even at the Buchanan-Zelenak extreme, is to transfer income/wealth from richer people to poorer people, and to do so across time as necessary.  It turns out, however, that the tools that are available to move resources from rich people to poor people -- progressive tax systems and income support programs, universal education, and so on -- are simply not likely to have the effect of reducing future living standards, even if we thought that it would be good to do so.

Finally, I should be clear that I am not saying that this creates a "free lunch."  Progressive redistributive policies benefit some people today at the expense of other people today.  The people who would lose under progressive redistributive policies bankroll Republican politicians' campaigns.  It simply appears that it is possible to redistribute wealth from those people without also reducing average future living standards.  Politically, that is useful to know.  But it is not morally required.


Greg said...

Zelenak raises an interesting proposal, and I'm not sure you've considered it fully. (BTW, I'm not saying that I agree, but I'll avoid making counter-arguments until the end.)

Zelenak's argument really amounts to the idea that if you can externalize costs to be realized by a future generation rather than the current one, then you should. Further, it argues that investment that will not be realized today (or at least by today's poor) is also not a good investment.

The most obvious example to me here seems to be environmental impacts. The argument goes that if you CAN pollute in a way where the current effects are minimal but the long-term effects are costly then you SHOULD.

Another interesting area is basic research. The extension of Zelenak's argument would be that if research doesn't have a practical application in the near-term future, then we as a society shouldn't invest in it.

There may even be more basic ideas like this concept promoting a government taking on excessive amounts of debt, passing that debt on to future generations to deal with.

The problem with this argument is that the cost today is typically quite small, but the cost (or opportunity lost) to future generations may be quite large. If we quit investing then future generations may actually be no better off than the current one, and may in fact be worse as they try to pay off the debts that will be passed on to them.

David Ricardo said...

Transferring income/wealth from future generations to current generations would seem to be immoral for two reasons. First, the primary way to do this is to pollute the environment and consume natural resources that would otherwise be available for future generations. The idea of deliberate pollution would seem to be especially repugnant as not only would it produce an economic cost to future generations but a physical cost as well in the form of poorer health. Furthermore the increased pollution and higher costs for the remaining natural resources would almost certain fall on lower income groups. The children who are suffering lead poisoning are from Flint, not Bloomfield Hills.

Second, by denying higher income to future generations the ability of those generations to ameliorate income inequality is reduced. A society can be more generous when there is more to be generous with.

There is of course in the U. S. more than sufficient income and wealth so that modest redistribution policies can be implemented which only slightly reduce the income and wealth of the top earners while at the same time having a major impact on lower income groups. It’s not a matter of resources, it is a matter of political will and economic decency.

James Longfellow said...

What a great topic Neil! Apparently your article was before my time following this blog or I simply missed it in the press of other business. I will read your paper and may have further thoughts later. However, for now, I want to take up your claim that a duty to future generations is "not morally required."

Whether or not it is morally required depends on who is included in one's notion of moral duty. Richard Rorty argued that the present has a moral duty to the future but that future has no moral duty to its past. On Rorty's terms, morality is like time's arrow, it only flies in one direction. Moral duty can only be projected into the future, never the past.

The reason this is so is because moral duty is duty only in relationship to particular people in specific historical situations. Moral action only happens in the present; the past and the future are alive in the present only insofar as they form a basis for moral action. It therefore follows by logical necessity that one can have no duty to the past because the person acting in the present has no power to change the past, only the future. This is what Rorty means when he says that the only value of the past in relationship to moral action is as a "reminder for a particular purpose".

So on these terms considering the impact on future generations is the ONLY thing that is morally required because it is the only thing that moral action has the power to change. Moral action cannot change the past, and moral action only happens in the present, so the impact of moral action is always in the future. So moral duty just is the duty to the future, nothing more and nothing less.

Shag from Brookline said...

James' closing:

" Moral action cannot change the past, and moral action only happens in the present, so the impact of moral action is always in the future. So moral duty just is the duty to the future, nothing more and nothing less."

leads me to wonder what a "true" libertarian would make of such words.