Economics

The Cost of Redistributing Wealth

A question for philosophers and politicians, not economists.

His loss might be everybody's loss.

Photographer: Levent Kisi/Anadolu Agency/Getty Images

I’d like to explain how most modern economists think about wealth redistribution. If you discuss welfare, taxes or inequality with an economist, you’re bound to run into a concept called the equity-efficiency tradeoff. It’s the idea that there’s a fundamental tradeoff between the size of the economic pie and the equal distribution of said pie. 

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