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7 Const. Pol. Econ. 3 (1996)

handle is hein.journals/constpe7 and id is 1 raw text is: Constitutional Political Economy, 7, 3-20 (1996) © 1996 Kluwer Academic Publishers, Boston. Manufactured in The Netherlands. Public Choice Interpretations of Distributional Preference' HAROLD M. HOCHMAN Department of Economics, Lafayette College, Easton, Pa. 18042 Abstract. This essay examines, from the perspective of both economics and ethics, the logical foundations of income transfers in a democratic society that allocates resources, in the large, through free markets. Such transfers, enacted through the public choice process, modify the market-determined distribution of income, as a reflection of the distributional preferences of the members of a society. Both constitutional and post-constitutional explanations of redistributions are considered. A discussion of recent experimental evidence of distributional preferences leads into a critique of simple equality, built on Michael Walzer's distinction between monopoly and dominance, as a criterion of distributive justice. JEL classification: Al, HQ, 13 1. Introduction: Economics and Ethics For nearly three decades I have puzzled and, on occasion, written about the logical founda- tions of income transfers, intended to modify the market-determined distribution of income, to effect income redistribution in a democratic society that allocates resources through free markets.2 Unlike most writings on this subject, however, my analysis is grounded in the distributional preferences of individuals and voting blocs, as these are revealed, politically, through fiscal redistribution, and not on the details of actual redistributive programs. Im- plicitly, then, my concern has been with the intricate and troubled relationship of political economy, in its neoclassical incarnation, to ethics. Profoundly moral issues of this genre were central to the writings of Adam Smith and John Stuart Mill, and later for writers as diverse as Marx and Friedman or von Hayek. Substantively, this essay is a selective review of what economists have learned about distri- butional principles, by employing the methods of public choice, over the last generation.3 The focus is on issues of equity or fairness, in particular, on the puzzling reality that most people do support redistributive transfers through private or political behavior, even when they seem to lose financially as a result.4 Since such questions draw us, inevitably, on to other terrain, I shall refer liberally, though perhaps less than faithfully, to contemporary political philosophy. The argument will have an admittedly subjective cast. Extended to distributional prefer- ence, economic discussion can be neither morally antiseptic nor ahistorical. Values are an intricate product of culture, teachers, faith, and personal history; introspection and a sense of the past, especially one's own, not only condition critical capacities, but shape analysis. Whether the argument that results can be defined as science is moot. Theory is never a failsafe guarantor of objectivity, much less common sense; this is especially true for topics like equality, property, and social justice, where the key to saying something meaningful

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