More on the Ethics of Helicopter Money

I have previously argued that the use of helicopter money (HM) to stimulate a flatlining economy is ethically problematic to the extent that it violates the maxim that justice is served if people attract the rewards and punishments they deserve.

Partly motivated by this claim, the Oxford University economist, Simon Wren-Lewis, looked more generally at the ethics of HM, arguing that

the ethical issue does all come down to the extent that the government can delegate decisions which have distributional impacts on the population.

Wren-Lewis's article has many merits, but surely on this particular point, assuming I am understanding him correctly, he is just wrong. A simple thought experiment should make this clear. Imagine that a government has mandated a central bank to use HM if interest rates are close to zero and if it will otherwise fail to hit its inflation target. But suppose also that it instructs that the policy should be implemented so that it targets the relatively rich (rather than the relatively poor, as is sometimes imagined by advocates of HM), with the predictable distributional effect that the rich will get richer, and the poor, relatively poorer.

In this situation, it seems clear that no principle of justice is violated - there is no ethical problem - in the mere fact that the decision of whether to implement HM has been delegated to a central bank (for the reasons given by Wren-Lewis in his article). To the extent that there is an ethical problem it emerges because of a predictable consequence of the policy: the distributional effect is to make the poor relatively poorer. This means an advocate of HM can argue without pain of contradiction that: (1) it is, ceteris paribus, morally legitimate for a government to delegate decisions with distributional impacts; that (2) if HM were targeted towards the rich, it would be unjust, because of the particular distributional effects; but (3) if HM were targeted towards the poor, or were applied across the board, it would not be unjust (because of the absence of particular distributional effects). From this perspective, the ethical issue doesn't come down to the question of whether it is right for a government to hand over some of its power to make decisions with distributional impacts; it doesn't even come down to the policy of HM, in and of itself; in fact, it comes down to the precise implementation of the policy and its particular distributional effects.

The key point is that if Wren-Lewis is right, then none of this moral complexity is in play. If all that counts is whether a government can delegate particular sorts of decisions, then there is no moral distinction to be made between a HM policy designed to redistribute towards the rich and one designed to redistribute towards the poor. But it is entirely implausible that there is no such distinction. It cannot be the case that everything that can be said about the ethics of a policy that has distributional effects comes down to whether it is legitimate for a government to delegate its implementation. And it further follows, of course, that it isn't possible to meet the objection that HM is ethically problematic to the extent it violates the maxim that justice is served if people attract the rewards and punishments they deserve merely by noting it is generally acceped that governments can delegate decisions that have distributional impacts.