Fair Enough? Support for Redistribution in the Age of Inequality
The public’s reaction to rising inequality has perplexed many. Some commentators find it surprisingly muted and ponder why support for redistributive policies has not increased. Following Donald Trump’s election and Brexit, others worry that the public’s reaction, while forceful, is misguided: immigrants and racial minorities, they fear, have become easy scapegoats for voters left behind by globalization and technological change.
Fair Enough? seeks to advance our understanding of this multifaceted response to rising inequality. It develops and tests a simple framework for studying mass attitudes toward redistributive social policies. A central claim is that these attitudes are shaped by at least two motives: material self-interest and fairness. On the one hand, people support (oppose) policies that, if implemented, would increase (decrease) their own expected income. On the other hand, people also support (oppose) policies that, if implemented, would move the status quo closer to (further from) what is prescribed by shared norms of fairness. Whether an outcome is perceived as fair depends on how well it fits the norms of proportionality and reciprocity. The proportionality norm applies to the marketplace and pre-distribution policies and prescribes that rewards be proportional to effort. The reciprocity norm applies to institutionalized social solidarity, i.e. policies that cover high-risk individuals irrespective of past contributions and requires that cooperative behavior be rewarded more than uncooperative behavior (i.e. free riding).
Because people hold different empirical beliefs regarding the fairness of the status quo, they also disagree over which policies to support or oppose. Given that beliefs about the fairness of the status quo are often disconnected from an individual’s own position in the income distribution, fairness reasoning rarely produces the types of policy preferences political economists and commentators might otherwise expect, e.g. higher support for redistribution among economically insecure voters or higher support for cuts in taxes and social spending among high-income voters. Only when policies are high stakes will individuals consider the benefits of deviating from saying what is fair and choose to express a self-serving policy position instead.
Contextual factors affect how material self-interest and fairness reasoning combine to affect policy preferences. Fair Enough focuses on three factors: social policy design, supply-side dynamics (e.g. elite discourse), and public finance. The resulting framework helps explain puzzling facts including high levels of attitudinal stability in most post-industrial democracies, a decline in support for redistribution in Great Britain and a decline in the income-gradient structuring support for redistribution in the United States.
Should one expect an increase in support for redistribution in reaction to a rise in income inequality? The book identifies several factors explaining the absence of any thermostatic reaction from the public. One factor is fairness reasoning itself. It introduces a disconnect between economic conditions and policy preferences. Part of the disconnect stems from the existence of stable beliefs regarding the fairness of the status quo. Furthermore, in the aggregate, fairness beliefs are more likely to be enablers of higher income inequality than to be shaped by it. Another factor is the structure of political competition, which, combined with fiscal stress, contributes to the erosion of support for key redistributive features of the welfare state.
Fair Enough? is based on doctoral work that received the 2016 Mancur Olson Prize for Best Dissertation in Political Economy, awarded by the APSA Political Economy Section. The award committee emphasized its pioneering contribution “to our understanding of heterogeneity in public responses to the objective increase in inequality, a major policy and political issue of our time.”