Director's law

Director's law states that the bulk of public programs are designed primarily to benefit the middle classes but are financed by taxes paid primarily by the upper and lower classes. The empirically derived law was first proposed by economist Aaron Director.

The philosophy of Director's law is that, based on the size of its population and its aggregate wealth, the middle class will always be the dominant interest group in a modern democracy. As such, it will use its influence to maximize the state benefits it receives and minimize the portion of costs it bears.

Milton Friedman used Director's law in his lectures to argue against the notion that governments benefited the poor at the expense of the rich.^[1]

References

1. "Milton Friedman on taxing the rich to help the poor". Youtube. Retrieved 2016-10-18.

• Stigler, G (1970). Director's Law of Public Income Redistribution, The University of Chicago.