The Economics of Freedom Theory, Measurement, and Policy Implications by SEBASTIANO BAVETTA PIETRO NAVARRA

Author:SEBASTIANO BAVETTA, PIETRO NAVARRA
Language: eng
Format: mobi, pdf
Tags: Autonomy–Economic aspects, Liberty–Economic aspects, Economics–Political aspects
Publisher: Cambridge University Press
Published: 2012-08-29T18:30:00+00:00

Cambridge Books Online

http://ebooks.cambridge.org/

The Economics of Freedom

Theory, Measurement, and Policy Implications

Sebastiano Bavetta, Pietro Navarra

Book DOI: http://dx.doi.org/10.1017/CBO9781139084734

Online ISBN: 9781139084734

Hardback ISBN: 9781107017849

Chapter

6 - Autonomy Freedom and Redistribution pp. 122-153

Chapter DOI: http://dx.doi.org/10.1017/CBO9781139084734.007

Cambridge University Press

6

Autonomy Freedom and Redistribution

6.1 i n t r o d u c t i o n

Income inequality is one of the crucial problems associated with the

capitalist model of economic organization, since it is an unescapable

and largely disapproved consequence of capitalism. Since capitalism

allows for inequality – so goes the received wisdom – then it is impor-

tant to put in place mechanisms to control it. However, international

surveys show remarkable differences in the ways inequality is per-

ceived across countries. These surveys cast doubt on how general the

received wisdom is and suggest that simplistic redistributive policies

are unlikely to be optimal. In this chapter, we analyze the determi-

nants of people’s preferences toward income redistribution and their

economic consequences. In particular, we argue that individuals’ atti-

tudes toward redistribution depend upon the extent of freedom people

enjoy.

Despite the effort devoted to the analysis of individuals’ preferences

for redistribution, freedom has never been conceived as a potential

driver in shaping these preferences. Yet, as we argue in this chapter,

freedom is a key causal antecedent of people’s preferences toward

redistribution. Recognition of the role of freedom is therefore crucial

in designing optimal redistributive policies.

The sense in which freedom sheds light on individuals’ preferences

for redistribution can be illustrated by considering their trade-off with

social mobility: The greater the perception that individuals are mobile

This chapter has been written in collaboration with Dario Maimone Ansaldo Patti.

122

Downloaded from Cambridge Books Online by IP 14.139.43.12 on Sat Oct 06 07:47:06 BST 2012.

http://dx.doi.org/10.1017/CBO9781139084734.007

Cambridge Books Online © Cambridge University Press, 2012

Autonomy Freedom and Redistribution

123

in society, the lesser the preference for flattening income differences

through redistributive schemes (Piketty, 1995). However, this trade-

off is qualified by the perceived fairness of the process through which

social mobility occurs namely, the extent to which outcomes are under

a person’s volitional control rather than be dependent upon privileges

given by third-party interventions or luck. Where individuals perceive

“unfair advantages” that unduly affect their position on the income

ladder, they favor redistribution through public policy as a correc-

tive tool. “[T]he belief on whether the mobility process is ‘fair’ or on

whether society offers equal opportunities to its members may be an

important determinant of the demand for redistribution” (Alesina and

La Ferrara, 2005, p. 898).

The crucial role of freedom becomes apparent here. As Alesina and

Angeletos (2005) point out, “[e]ndogeneizing the concept of fairness,

and understanding why societies consider some sources of inequality

justifiable and others unfair” (p. 971), is an important exercise still to

be accomplished. Freedom sheds light just on the process that shapes

individuals’ perceptions of fairness. Consider the concept, central to

this book, of autonomy freedom. We already pointed out, in Chapter 4,

that people who enjoy autonomy freedom have, to a large extent, con-

trol over their achievements. Therefore, what they perceive as fair or

unfair is likely to depend upon the degree of autonomy freedom they

enjoy. Being in control of their own achievements, people with high

levels of autonomy freedom are likely to perceive the game in life as

a fair process where individual skills and abilities dominate luck and

privileges of any sort.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.