Children develop a sense of fairness from an early age. Hitting someone younger and weaker is unfair. Collective punishments are unfair. Paying pocket money below the going rate, determined by a survey of one’s peers, is unfair.
On Tuesday our Treasurer presented the annual budget to Parliament and announced it to be ‘a fair budget’. ‘Fair’ is now the top buzz-word in Australian politics. The trouble is that the word means different things to different people.
On the left of politics, it means taking more from the rich and distributing it to the non-rich. The exact positioning of the dividing line between the rich and the non-rich is itself a matter for debate of course. Or rather, it is left to each elector to decide which side of the line he or she sits. For most of us ‘rich’ is defined as ‘better off than me’, so policies that involve taking from the rich are generally popular.
But on the right of politics fairness involves allowing people to earn and retain as much as possible of the value of what they produce. According to the Economics textbooks, that value is represented by the wage or profit that the free market assigns. So whether one is a banker, a nurse, a soldier or a casino owner, what you receive is what you’re worth. Obviously it’s unfair to take more from the most productive members of society.
The Economics textbooks support the left-wing view too though. They point out that an extra dollar in a poor man’s pocket does him more good than it would do for a rich man, so the total wellbeing of society will always be increased by redistributing from rich to poor until perfect equality is achieved.
I would rather take ‘fair’ out of the conversation and substitute ‘pragmatic’. The rich always have to pay more (both absolutely and relatively) because, to borrow bank-robber Willie Sutton’s famous quotation, “That’s where the money is.” But the rich are also the most able to find ways to avoid and minimise taxation; or, if paying tax in Country A becomes too onerous, move to Country B.
So it’s a balancing act. Pragmatism is all. To paraphrase a line by Clint Eastwood, “Fair’s got nothin’ to do with it.”