The mere contemplation of the idea of redistribution seems very antagonistic of the economic system one lives in, a capitalist system if you may. If the structure is a perfect economic system, which is well regulated with the right amount of control, then why does the idea of redistribution creep into every aspect of economic life, be it in the form of taxes, cesses, fees, etc. It may be a worthwhile exercise to ponder whether there is something wrong with policy relating to the initial distribution. As a crucial matter of discourse, Ashit Kumar Srivastava provided a thesis, anti- thesis and synthesis.
Before beginning, it would be in point of order to comprehensively analysis the very meaning of a redistributive economy. The term redistributive economy is quite often quoted by libertarians who regard various taxations and fees as redistribution of the wealth initially earned by an individual through hard work and respectable means in the name of social projects and other welfare projects for the minorities. This redistribution is carried on by the state for those who could not be a part of the initial generation of wealth in the economy.
The argument seems rational and justified from the libertarian point of view, but all in all this notion defends quite a dangerous justification of inequality and inequity between human beings, a notion more or less based on the axiom, ‘Survival of the fittest’. It is also logical to claim that the initial distribution of wealth in the economy unequal and diverted towards the rich, especially in a laissez-faire economy, the rich businessman or trader is bound to become wealthier by multiplying his assets.
It leaves quite an important question unanswered. “What then remains for the weak?” It is essentially to counter the inequality of this initial distribution why the helping hand of State comes in to play, adopting a socialist role, which not only provides for the well being of society in general, but also job opportunities, social security and public health care. But to be able to effectively perform this role, the state requires adequate financial resources. Since the state is not a self-sufficient entity which could finance all its social schemes (Article 41 of the Indian Constitution provides for State assistance but subject to its financial strength) thus it has to more or less dependent upon taxation schemes, various cesses and tolls.
There have been various staunch libertarians who stand such schemes in utter disregard and regard them not more than a fraud committed by the state on its client, against the very purpose of serving those who brought it into existence. The most ardent of such libertarians was sociologist Herbert Spencer, who said,
“The state should not undertake public health, nor give the poor any relief because that would defeat the operation of the law of natural selection.”
In reply to this, quoting L.T Hobhouse will be apt as he sais,
“The prosperous businessman who thinks that he has made his fortune entirely by self-help does not pause to consider what single step he could have taken on the road to his success but for the ordered tranquility which has made commercial development possible, the security by road, and rail, and sea, the masses of skilled labour, and the sum of intelligence which civilization has placed it at his disposal.”
Though a fact can’t be denied that re distributing the wealth, once it has already been distributed seems un-just, but it needs to be assimilated that human society, as we know it, is filled with disparity and it is possible that during the initial distribution, the strong will overpower the weak, as John Rawls stated in his work “The Theory of Justice”. It is this highly likely hindrance which augments the gulf between the rich and poor, the haves and have nots.
Ashit Kumar Srivastava is a 5th year law student from University of Lucknow