What Is Wealth Redistribution

What Is Wealth Redistribution, John Stuart Mill

One means favored by Mill to achieve the goal of greater equality was the redistribution, not of income, but of wealth. The dis­tinction between the two is not trivial. John Stuart Mill believed, as his father did, that individuals should be allowed to "reap the fruits of their own indus­try," which is to say that every man has a right to the income he earns. But neither father nor son looked favorably on the accumulation of wealth as an end in itself. Both held that beyond a certain limit, further material gains are frivolous. In the younger Mill, this aversion to overaccumulation took the form of a proposal to limit the size of bequests. Mill established his own norms as follows:

Were I framing a code of laws according to what seems to me best in itself, without regard to existing opinions and sentiments, I should prefer to restrict... what any one should be permitted to acquire, by bequest or inheritance. Each person should have power to dispose by will of his or her whole property; but not to lavish it in enriching some one individual, beyond a certain maximum, which should be fixed sufficiently high to afford the means of comfortable independence. The inequalities of property which arise from unequal industry, frugality, perseverence, talents, and to a certain extent even opportunities, are inseparable from the principle of private property, and if we accept the principle [as Mill did] we must bear with these con­sequences of it: but I see nothing objectionable in fixing a limit to what any one may acquire by the mere favour of others; without any exercise of his faculties, and in requiring that if he desires any further, he shall work for it (Principles, pp. 227-228).

Clearly, what Mill advocated was a world in which people would be free from the pressing demands of economic necessity and open to improvements in the quality of life. This latter notion he shared with the romantic poets, al­though he denounced their criticism of political economy. It and the asceticism Mill revealed in seeking to limit individual fortunes are normative proposi­tions, not analytical ones. But they reveal the deep, philosophical humanism of a great theoretician in economics as well as a great philosopher.

On the opportunities for personal development (along nonmarket lines) in the stationary state, Mill was emphatic:
It is scarcely necessary to remark that a stationary condition of capital and popula­tion implies no stationary state of human improvement. There would be as much scope as ever for all kinds of mental culture, and moral and social progress; as much room for improving the Art of Living, and much more likelihood of its being im­proved, when minds ceased to be engrossed by the art of getting on (Principles, p. 751).

Government and Laissez Faire A major part of Mill's normative economics concerns the proper role and influence of government, a topic he took up in Book V of the Principles. He began by distinguishing between the necessary functions of government and its optional functions. The necessary functions "are either inseparable from the idea of government or exercised habitually and without objection by all governments" (Principles, p. 796). Other func­tions, however, are not universally accepted, and there is room for contro­versy as to whether or not governments should exercise them.

This distinction between necessary and optional functions is important only insofar as it enabled Mill to minimize discussions of the former and concentrate on the latter. Mill's list of necessary government functions includes the power to tax, coin money, and establish a uniform system of weights and measurements; protection against force and fraud; the administration of justice and the enforce­ment of contracts; the establishment and protection of property rights, including determination of the use of the environment; protection of the interest of minors and mental incompetents; and the provision of certain public goods and services, such as roads, canals, dams, bridges, harbors, lighthouses, and sanitation.

Mill followed his discussion of government activity in these areas with a lengthy digression on the economic effects of all manner of taxes, direct and indirect. His treatment of such questions was exhaustive and has been little surpassed in the many years that have elapsed since. Nevertheless, it is a de­tour that threatens the continuity of Mill's narrative in Book V on the proper grounds for government action. Returning to that subject in the final chapter of the Principles, Mill placed the burden of proof on those who would advocate government intervention. He himself stood squarely in the classical tradition by reaffirming the maxim that laissez faire should be the rule and that any de­parture from it, "unless required by some great good, is a certain evil."

But although Adam Smith was less doctrinaire on the matter of government interference than he is generally made out to be, John Stuart Mill was even less so. The key to Mill's philosophical position on the limits of the laissez faire principle lies in his recognition that government interference under capi­talism could be required by some great good. Thus Mill was able to list several exceptions to the doctrine of laissez faire without compromising on the basic principle. His exceptions would allow government intervention in the areas of consumer protection, general education, preservation of the environment, se­lective enforcement of "permanent" contracts based on future experience (e.g., marriage), public-utility regulation, and public charity.

In short, Mill recognized, and in some cases enunciated for the first time, the majority of popular exceptions to laissez faire that have become an integral part of modern capitalism, at least in the United States. The various watchdog agencies of government (e.g., the Food and Drug Administration), state-supported education, the Environmental Protection Agency, divorce laws and courts, regulatory commissions (e.g., the Federal Power Commission, the Federal Aviation Administration, and the Federal Communications Commis­sion), and welfare legislation in the United States have all been inspired by a kind of Millian desire to make capitalism fairer and more humane.

In fairness to Mill, he was very explicit about the caveats the state should employ in instituting such measures, and he would not necessarily approve of all existing amendments to the institutions of capitalism. Nevertheless, it is his willingness to make such amendments that underlines the transitional nature of his works and thoughts and that marks Mill as very much a modern economist.

Mill and His Influence

John Stuart Mill was undoubtedly a product of his intellectual environment, but he was also a molder of it. Fully within the classical tradition, he devoted his intellectual efforts to a synthesis and improvement of economic knowledge at a time when economics as a science was beset on all sides by romantic, so­cial, and methodological criticism. He enriched economic theory by his own analytical contributions, and he did not hesitate to issue normative proclama­tions to point the way for practical applications of economic knowledge. To his credit, Mill never confused the two branches of economics—theory and pol­icy—and yet he skillfully displayed the interconnections between the two. Wherever Mill asserted his normative views, he warned his readers of their arbitrariness. Yet even while doing so, he revealed a spirit of disinterested in­quiry by carefully presenting both the advantages and the disadvantages of a given proposition or course of action.

His influence on other economists and social thinkers was deep and long-lasting. In his own century, Mill's concern for fundamental questions and his multifaceted brilliance as economist, philosopher, and logician insulated him against the attacks of lesser minds. Indeed, Mill's legacy remains. As is true of most great thinkers, his questions have proved more durable than his answers. In this chapter we have concentrated on Mill's theoretical performance, with mere side glances at his policy proposals. In the next we shall see how Mill's ideas on policy became part of the political landscape.