Adolph Wagner Revisited: Is Redistribution of Income and Wealth a Public Good?

Adolph Wagner (1835–1917) did break new grounds in economics by conceiving redistribution of wealth and income as a provision in the collective need for less economic inequality. In his organic conception of society the government has an identity of its own and makes decisions in the general interest. The two Swedes Wicksell (1896) and Lindahl (1919) followed Wagner in the idea that redistribution is a collective good. But in their individualist Austrian economics approach they construct the government’s decision on redistribution as the outcome of consensus in parliament, attained by delegates that represent citizens with various individual interests. Decades later the Americans Hochman and Rodgers (1969) defended a theory in which donators that care for other people voluntarily pay taxes to support those in need. That claim has been widely refuted. Such transfer programmes would fail because of the incentive to free ride. Therefore redistribution cannot pass for a public good. The whole American discussion has been blind for the Swedish contribution. That is unfortunate since it did spell out the political framework that pre-empts free riding; an issue neglected by Hochman and Rodgers. Although the work of Wicksell and Lindahl can be viewed as a rehabilitation of Wagner’s notion that redistribution is a collective good, I presume his attachment to the organic conception of society would have withheld him from accepting their individualist theory of redistribution in a parliamentary consensus democracy.