I often hear this argument from "egalitarians":
1) Taking from the rich and giving to the poor is justified, because that creates far more happiness than it takes away.
2) Consuming doesn't really make people happy, safety, stability and family does, and capitalism, by making people earn more and more ends up alienating people from their families and making their lives unsecure and unstable, and thus unhappy (as reported in studies, and as seen in the suicide rate).
For 2, this was provided:
People expect that having more options will make them happier, but often it doesn't. Research with gourmet jams has found people can be happier, and even better motivated, when they have fewer options to choose from. In some situations, no choice at all may be better than choosing between two options - even when both options are equally enticing.
How to reply to this?
The second premise is the Marxist theory of alienation.
1) Is a classical abuse of the notion of diminishing marginal utility. Socialists treat it as apodictic that a rich person will value their money less than someone poorer. Yet it isn't; for instance, that person may value money spent on consumption less (which is to say they'll value consumption less), but not investment, so that by lessening the amount of wealth at their disposal one diminishes aggregate utility. This at least denies the argument that DMU implies redistributive measures to increase utility.
2) Is a non sequitur. How does the market "force" anyone to earn a lot? They can work as much or as little as they please. If they're status/wealth-oriented, then they're living according to their preferences, regardless of what socialist elitists may think. The article you quote from sounds like pure nonsense. It is analogous to saying two kinds of freedom can be equally enticing, so wouldn't slavery be best? Please... I realize free agency can be too much for some people, but must they really burden the rest of us with their decrepitness?
Freedom of markets is positively correlated with the degree of evolution in any society...
xSFx:How to reply to this?
It's a blatant smuggling of religion (or psychiatry) into economics. It's perfectly true that many people believe themselves happier when they cultivate "spiritual" values like non-materialism. Many more people believe that everyone would be happier if forced to cultivate such values. It's not really possible to prove or disprove this belief, because it's an article of faith. It's also far from obvious that restricting everyone to a diet of beans will result in the cultivation of non-materialistic spirituality.
Boiled down, the chain of reasoning is: everyone would be happier if he became a monk. Therefore, we can make anyone happier by forcing him to wear a sackcloth robe and live the rest of his life in a cell practicing Gregorian chants.
The hole in the reasoning is that everyone who chooses not to do so is demonstrating a priori that HE doesn't think it would make him happier.
No.1 can't be proven because you can't measure happiness.
But hypothetically assuming that you can, who says that equalizing happiness by force a virtue? Certainly all those with "above average happiness" in life will not voluntarily give away their happiness for nothing in return. In that case, for some kind of happiness redistribution to even occur, there would have to be an initiation of force by those with "below average happiness".
Many socialists pride themselves on being non-violent, but this is precisely violence and is inconsistent with their views.
Those that accept violence as a means to some "greater good for society" commit the fallacy of thinking about the abstract concept of society as something real. There is no such thing as "society" outside of the people living together, and if you redistribute happiness forcefully you are not making "society" better off, you are merely making one half of the population better off on the expense of the other. This is also indefendable (unless you claim that the less happy have a right to rob the more happy - which some socialists might claim I guess).
So even theoretically, this argument defeats itself.
#1 is an inconsistent moral theory. It simultaneously affirms and denies property rights. The rich persons money is stolen aka they don't have an absolute right to keep it and given to somone who is labeled poor who is assumed to absolutely have a right to keep it. As stated marginal utility does not justify this inconsistency so there is no reason why the opposite could also not be stated. That the poor should be fleeced for the rich because they've proven to have a higher marginal utility for money since they have accumulated more.
Interestingly, the DMU argument can be reversed, arguing that because the rich individual might value the money more highly for ends such as investment than some poor individual who desires it for consumption, that the wealth of the poor ought to be confiscated to increase utility. Incredibly heinous argument, but one the DMU proponent is forced to accept by their logic.
Jon Irenicus:Interestingly, the DMU argument can be reversed, arguing that because the rich individual might value the money more highly...
Yep! In particular, since redistributionists regard the rich as miserly, they themselves must believe that the rich man is more upset than a poor man to be expropriated of a penny. Which they would probably grant without missing a beat, and then suggest that this makes the rich "evil," and so disqualifies them from sympathy. Another irrefutable argument! If they won't miss it, then we'll just give it to someone who really wants it--but if they will miss it, we'll take it to teach the greedy b*stard a lesson.
Libertarians, and austro-libertarians in particular, have never as far as I'm aware claimed that happiness lies in consumption, but rather that happiness is maximized when individuals have as much access as possible to things they believe will make them happy.
I agree (albeit unmilitantly) with those opposed to consumerism (and have some sympathy to simple living a la Thoreau and Kaczynski) but it is a mischaracterization of the free market to say that it encourages such a philosophy. It must be understood that the consumerism prevalent in the US and other countries today is not an effect of capitalism, which is inchoate or nonexistent anyway, but in fact a result of the state's inflationary monetary policy.
Diminishing Marginal Utility - IT'S THE LAW!