The Egalitarian Program in Broad Strokes

Some of my Twitter critics say I put too much focus on welfare benefits, neglecting other components of an egalitarian agenda. While it's true that I focus the most on welfare, this is because welfare is the best and most effective way to reduce poverty. Nonetheless, to appease these critics, let us lay out the basic structure of a broader egalitarian program.

When gaming out egalitarianism in broad strokes, I think the best concept to start with is the national income, i.e. all of the income produced by the people of the country. The national income is distributed out either as (net of taxes) market income or welfare benefits.

The first plank of an egalitarian program is to reduce the market income share and increase the welfare benefit share. This is done by increasing the tax level and expanding welfare benefits. I tend to focus most of my time on how precisely to expand welfare benefits.

Net market income is distributed out either as capital income (profits, dividends, capital gains, interest, rents) or labor income (wages, salaries, farm income, self-employment income).

The second plank of an egalitarian program is to reduce the capital income share and increase the labor income share. This is an especially strong interest right now because labor's share has been declining recently. This is done primarily by increasing the bargaining power of labor by pushing for full employment and stronger labor unions.

Labor income is distributed out (generically speaking) to low earners, middle earners, and high earners, defined in terms of hourly compensation.

The third plank of an egalitarian program is to compress the distribution of labor income among these groups by reducing the share going to high earners and increasing the share going to low and middle earners. As with reducing capital's share, this is an especially strong interest right now because high earners have been grabbing up a greater share of the labor income more recently. This is done by increasing the minimum wage, increasing the top marginal income tax rate (which, it is argued, would cause firms to change the way they compensate their employees), and increasing the bargaining power of low earners and middle earners by pushing for stronger labor unions.

The final plank of an egalitarian program concerns capital income. Most liberal policy people seem to tread softly here, if they tread at all. In my view, the thing to do with capital income is to socialize as much of it as is practically possible. For land rents, this is done by imposing a very high Land Value Tax. Such a tax is not socialization in the sense that the state literally takes over the land, but it is socialization in the sense that the state takes over the land rent stream. For other capital income, this is done by creating social wealth funds (like what Alaska and Norway has) in which the state holds huge quantities of stocks and bonds and thereby collects the dividends and interest that flow to such financial wealth.

In total, I think the egalitarian agenda is: 1) increase welfare's share of the national income, 2) increase labor's share of the market income, 3) compress the distribution of labor income among workers, and 4) socialize capital income streams as far as is practicable. Certainly there are more ideas about how to accomplish 1 through 4 than those I briefly mentioned above. And there are other goals in the world than just these (e.g. I want to reduce work hours). But, this is in broad strokes what the economic egalitarian left should be primarily focused on.

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