I perform an economic and ethical analysis on wealth and income inequality. Economists have performed many statistical studies that reveal a number of, often contradictory, findings in connection with the distribution of wealth and income. Hence, the statistical findings leave us with no better knowledge of the effects that inequality has on economic progress. At the same time, the existing theoretical results have not provided us with a definitive answer concerning the effects of (...) class='Hi'>inequality on progress. By gaining knowledge of the nature of inequality, and bringing basic economic principles to bear on the subject, we can come to an understanding of what the causal relationship is between inequality and economic progress. Furthermore, I apply a new theory of ethics – rational egoism – to assess economic inequality. I show that, in the right context, economic inequality is both economically and morally desirable. (shrink)

This article surveys the distribution of wealth and its relationship to economic inequality more broadly. It shows that wealth inequality is high and contributes significantly to inequality in income and consumption, although higher wealth inequality is not always an indicator of greater inequality in well-being. In particular, welfare state policies can improve the well-being of low income groups while at the same time reducing their incentive to save. This may lead (...) to high observed wealth inequality in places where it would otherwise not be expected, such as some of the Scandinavian countries. More research is needed to better illuminate such connections between public policy and wealth inequality. (shrink)

This article describes three utopian attempts to ameliorate the negative effects of income inequality that are less revolutionary than those of More and Bellamy. Rather than dispensing with money or gold, these three utopias modify existing institutions with the aim of lopping off the extremes of both wealth and poverty without upending the entire social and economic structure. Discussion includes Theodor Hertzka’s _Freeland_ (1891), Theodor Herzl’s _Altneuland: The Old New Land_ (1902), and H. G. Wells’s _A Modern (...) Utopia_ (1905). The three utopias provide potential solutions by undercutting causes of poverty and intergenerational wealth accumulation rather than by economic leveling, and by stressing a fresh start for each generation. The primary tools in this effort are education, universal healthcare, a safety net of basic income, fiscal transparency, confiscatory estate taxes, and common ownership of land. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Beyond the Ethics of Wealth and a World of Economic InequalityMark D. WoodAnalyzing the ethics of wealth and the relationship between the dominant ethics of wealth and economic inequality is vital to creating a humane mode of global life. We are living during a period in which the unequal concentration of wealth—which is to say, the unequal concentration of the resources that make human (...) existence, development, and fulfillment possible—has never been greater.1 The World Bank reports that almost “1.3 billion people remain below the extreme poverty line with an income of US $1.25 or less a day. Close to 2.5 billion—more than one-third of the world’s population—live on less than US $2 a day, another common measurement of deep deprivation,”2 and a staggering 80 percent of the world’s population struggles to survive on less than US $10 dollars a day.3 Credit Suisse’s 2012 Global Wealth Report indicates “the bottom half of the global population [or more than 3.5 billion persons] possess barely 1 percent of total wealth... In sharp contrast, the richest 10 percent own 86 percent of the world’s wealth, with the top 1 percent alone accounting for 46 percent of global assets.”4 Given the history of international colonial and neocolonial relations, it comes as no surprise that wealth is highly concentrated in Western Europe and North America, while the overwhelming majority of individuals living in poverty are concentrated in Africa, India, Asia, and Central and South America.5The wealth gap between the top 10 percent and the bottom 90 percent is, however, also reaching record levels in developed nations. While in 2012, the United States had the seventh highest average wealth holdings per adult in the world, “among nations with at least a quarter-million adults, only Russia, Ukraine, and Lebanon are more unequal” than the United States.6 A Reuters investigative report published in 2012 reveals that “inequality has risen not just in plutocratic hubs such as Wall Street and Silicon Valley, but also in virtually every corner of the world’s richest nation: Inequality has increased in 49 of 50 states since 1989,” with Mississippi being the only exception, even as it still “ranks worst in the nation on both counts.”7 In 2010, “the top 1 percent of households (the upper class) owned 35.4 percent of all privately held wealth, and the next 19 percent (the managerial, professional, and small business stratum) had 53.5 percent, which means that just 20 percent of the people owned a remarkable 89 percent, leaving only 11 percent of the wealth for the bottom 80 percent [End Page 125] (wage and salary workers).”8 In The Price of Inequality (2012), Nobel Prize–winning economist Joseph E. Stiglitz indicates that the “six heirs to the Walmart empire command wealth of $69.7 billion dollars, which is equivalent to the entire wealth of the bottom 30 percent of U.S. society.”9 In short, six individuals possess more wealth than do ninety-six million individuals—though this figure is misleading inasmuch as most of the ninety-six million own almost nothing but mounting debt. Most significantly, the top 10 percent own between 81 percent and 94 percent of all stocks, bonds, trust funds, and business equity, and almost 80 percent of non-home real estate.10 G. William Domhoff makes the vital point that inasmuch as “financial wealth is what counts as far as the control of income-producing assets,” that is, control of the means of producing wealth, “we can say that just 10 percent of the people own the United States of America.”11 Meanwhile, according to the latest census, fifty million Americans qualify as poor and another 100 million qualify as low income.12The concentration of the lion’s share of wealth in the hands of a tiny fraction of humanity is devastating for the majority of people living on the planet and ultimately for everyone. On the ground, capitalism’s champagne glass–shaped distribution of wealth means that hundreds of millions of persons have barely enough of the basics necessary to exist. Between 24,000... (shrink)

Economic inequality has become a focus of prime interest for economic analysts and policy makers. This book provides an integrated approach to the topics of inequality and personal income distribution. It covers the practical and theoretical bases for inequality analysis, applications to real world problems and the foundations of theoretical approaches to income distribution. It also analyses models of the distribution of labour earnings and of income from wealth. The long-run development of (...) class='Hi'>income - and wealth - distribution over many generations is also examined. Special attention is given to an assessment of the merits and weaknesses of standard economic models, to illustrating the implications of distributional mechanisms using real data and illustrative examples, and to providing graphical interpretation of formal arguments. Examples are drawn from US, UK and international sources. (shrink)

It is recognised that the gap between rich and poor in Britain is widening faster than in any comparable country. This important issue is attracting increasing attention after long neglect. Economists and others concerned with problems linked with inequality are investigating factors contributing to the situation. Based on results of the first recent major research programme in this area, this book, first published in 1996, examines wealth distribution in the United Kingdom over the last two decades. Leading specialists (...) in the area tackle the problem from a wide variety of perspectives. Contributions include: the analysis of income distribution; the effects of greater female participation in the labour force; social security reform; and geographical variation at the national and local scale. Understanding the complexity of these factors is crucial to designing policies which can begin to cope with income inequalities. (shrink)

In this article, I explore an alternative model of Confucian distributive justice, namely the ‘family model’, by challenging the central claim of recent sufficientarian justifications of Confucian justice offered by Confucian political theorists – roughly, that inequalities of wealth and income beyond the threshold of sufficiency do not matter if they reflect different merits. I argue (1) that the telos of Confucian virtue politics – moral self-cultivation and fiduciary society – puts significant moral and institutional constraints on (...) class='Hi'>inequality even if it meets the threshold of sufficiency and largely results from differing individual merits; (2) that the Confucian moral ideal of the family state establishes and gives justification to the ‘family model’ of distributive justice that shifts the focus from desert to vulnerability and from causal responsibility to remedial responsibility. The article concludes by presenting Confucian democracy as the socio-political institution and practice that can best realize the Confucian intuition of the family model of justice. (shrink)

(Purpose) The purpose of the study is to present Thomas Piketty’s demand view on the issue of growing income and wealth inequalities in highly industrialized countries. It should be indicated here that in his research, Piketty not only explains the mechanism of growing inequalities, but also defines the tools to tackle inequalities (a combination of theoretical and pragmatic views). (Methodology) The aim of the study is achieved through the literature review method as well as the descriptive methods, complemented (...) by comparative analysis. (Results) Piketty’s considerations clearly show that the problem of income and wealth inequalities will not disappear spontaneously, so market automatism will not only not eliminate their causes, but also will not create conditions for a fair distribution of production outcomes between capital and labor. Therefore, reducing the level of inequality requires a return to the concept of the welfare state. (Contribution to the discipline) The conducted analysis may become part of a larger research project showing the relationship between the level of economic development and its impact on the scale of income and wealth inequalities. (shrink)

If an array of goods is for sale on a market, one’s wealth, the tradeable resources one owns, determines what one can purchase from this array. One’s income is the increment in wealth one acquires over a given period of time. In any society, we observe some people having more wealth and income, some less. At any given time, in some societies average wealth is greater than in others. Across time, we can observe societies (...) becoming richer or poorer and showing more or less equal distributions of wealth among their members. Does it matter from an ethical standpoint whether some people have more income and wealth than others? Does securing a more equal distribution of income and wealth either constitute the achievement of something that is intrinsically morally desirable or serve as a reliable means to the achievement of some intrinsic moral value? If we suppose that justice demands equalizing the income of wealth of persons in many circumstances, what principles of justice generate this demand? (shrink)

This paper uses a computational framework to analyse the equilibrium dynamics of exploitation and inequality in accumulation economies with heterogeneous labour. A novel index is presented which measures the intensity of exploitation at the individual level and the dynamics of the distribution of exploitation intensity is analysed. Various taxation schemes are analysed which may reduce exploitation or inequalities in income and wealth. It is shown that relatively small taxation rates may have significant cumulative effects on wealth (...) and income inequalities. Further, taxation schemes that eliminate exploitation also reduce disparities in income and wealth but in the presence of heterogeneous skills, do not necessarily eliminate them. The inegalitarian effects of different abilities need to be tackled with a progressive education policy that compensates for unfavourable circumstances. (shrink)

Is there a moral obligation to reduce differences in income and wealth? There is an egalitarian tradition that condemns these differences, particularly as they arise in free-market capitalist society, as unfair or unjust. The opponents of this view argue that the material disparities of capitalist society have been brought about by voluntary mechanisms and thus accord with the freely exercised liberties of its citizens. They conclude that capitalist inequality is not vulnerable to the ethical complaints of its (...) critics. They maintain that the standard of living achieved as a by-product of the marketplace and its inequalities could not be adequately reproduced under egalitarian institutions. The essays in this volume, written by prominent economists, philosophers, and academic lawyers, assess the empirical and theoretical questions raised by inequalities of income and wealth. (shrink)

This paper provides an analysis of U.S. farmland owners, operators, and workers by race, ethnicity, and gender. We first review the intersection between racialized and gendered capitalism and farmland ownership and farming in the United States. Then we analyze data from the 2014 Tenure and Ownership Agricultural Land survey, the 2012 Census of Agriculture, and the 2013–2014 National Agricultural Worker Survey to demonstrate that significant nation-wide disparities in farming by race, ethnicity and gender persist in the U.S. In 2012–2014, White (...) people owned 98% and operated 94% of all farmland. They generated 98% of all farm-related income from land ownership and 97% of income from farm owner-operatorship. Meanwhile, People of Color farmers were more likely to be tenants rather than owners, owned less land, and generated less farm-related wealth per person than their White counterparts. Hispanic farmers were also disproportionately farm laborers. In addition to racial and ethnic disparities, there were disparities by gender. About 63% of non-operating landowners, 86% of farm operators, and 87% of tenant farmers were male, and female farmers tended to generate less income per farmer than men. This data provides evidence of ongoing racial, ethnic and gender disparities in agriculture in the United States. We conclude with a call to address the structural drivers of the disparities and with recommendations for better data collection. (shrink)

This book develops a novel approach to distributive justice by building a theory based on a concept of desert. As a work of applied political theory, it presents a simple but powerful theoretical argument and a detailed proposal to eliminate unmerited inequality, poverty, and economic immobility, speaking to the underlying moral principles of both progressives who already support egalitarian measures and also conservatives who have previously rejected egalitarianism on the grounds of individual freedom, personal responsibility, hard work, or economic (...) efficiency. By using an agnostic, flexible, data-driven approach to isolate luck and ultimately measure desert, this proposal makes equal opportunity initiatives both more accurate and effective as it adapts to a changing economy. It grants to each individual the freedom to genuinely choose their place in the distribution. It provides two policy variations that are perfectly economically efficient, and two others that are conditionally so. It straightforwardly aligns outcomes with widely shared, fundamental moral intuitions. Lastly, it demonstrates much of the above by modeling four policy variations using 40 years of survey data from the Panel Study of Income Dynamics. (shrink)

Wealth inequality is a prevalent social issue. The present study focuses on acceptance of wealth inequality, and considers personal income, perceived upward mobility, and future time perspective as its antecedents, and collective action intention as its outcome. With reference to the social identity literature and socioemotional selectivity theory, we posit a conditional indirect effect of income on collective action intention through acceptance of wealth inequality: only when mobility and future time perspective are (...) relatively high, higher income is associated with higher acceptance of wealth inequality and in turn, lower collective action intention. Moderated mediation findings, based on territory–wide phone survey data from 866 Hong Kong adults, supported this prediction. This work indicates the relevance of an individual-level instrumental perspective to the understanding of acceptance of wealth inequality as well as collective action intention. (shrink)

Economists now have the data to generate a high‐resolution picture of the economic inequalities within the very top fractions of income and wealth and between the top‐most fractions and others that have emerged since the early 1980s. I shall refer to these inequalities collectively as “the new inequality.” I argue that the moral value of solidarity can be used to raise pointed moral questions about the new inequality. In most cases, however, I shall raise such questions (...) without answering them. For I contend that solidarity functions more usefully as part of an articulate hermeneutic of suspicion—that is, as a central element in skepticism about economic inequalities and their justifications. Seeing that it functions in this way, we can see one contribution religious ethics makes to an inquiry into the new inequality. (shrink)

Income inequality in the US has now reached levels not seen since the 1920s. Management, as a field of scholarly inquiry, has the potential to contribute in significant ways to our understanding of recent inequality trends. We review and assess recent research, both in the management literature and in other fields. We then delineate a conceptual framework that highlights the mechanisms through which business practice may be linked to income inequality. We then outline four general (...) areas in which management scholars are uniquely positioned to contribute to ongoing research: data and description, organizational dynamics, collective action, and value flows and tradeoffs. To stimulate future research, we highlight a number of relevant research questions and link these questions to existing management research streams that could be leveraged to address them. (shrink)

Recent technological developments in automation threaten to eliminate the jobs of millions of workers in the near future, raising worrisome questions about how to satisfy their welfare. One proposal for addressing this issue is to provide all citizens with a “universal basic income” (UBI) that ensures everyone with a social minimum. The aim is to give all individuals an unrestricted cash grant that provides them with an income that does not depend on status, wealth, or employment. The (...) question this paper explores is whether UBI can replace work in the age of automation. Work has financial and non-pecuniary benefits that provide individuals with an income, as well as self-realization, self-respect, and community. While the provision of UBI will supplement the financial benefits of work, the question remains whether such a grant can replace these non-pecuniary benefits. The first section outlines the benefits and burdens of work. The second section considers the effects of technology on work in the context of automation. The third section examines the arguments for UBI that make it a philosophically attractive alternative to traditional welfare policies. Finally, the last section evaluates whether the benefits of UBI can replace the loss of work in terms of its non-pecuniary benefits. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:The Ethics of Wealth in a World of Economic Inequality: A Christian Perspective in a Buddhist-Christian DialogueJoerg RiegerThere is common agreement that we find ourselves in a world of economic inequality. More precisely, we are living in a world where economic inequality continues to grow by leaps and bounds. Income inequality in the United States is greater than it has ever been, greater (...) than that of most other wealthy countries,1 and it is even greater than the income inequality known in the Roman Empire. In Ancient Rome, the top 1 percent controlled 16 percent of society’s wealth, compared to 40 percent in the contemporary United States.2 Nevertheless, although there is broad agreement on the existence of economic inequality, there are different perspectives on what it all means.While many lament the existence of economic inequality, others welcome it. Christians who follow the teachings of the so-called gospel of prosperity, for instance, are rarely bothered by economic inequality because they see economic success as a result of faithfulness to God, while stagnation or even poverty is the result of lack of faith. Among economists, one of the dominant perspectives on economic inequality is that it is necessary and beneficial. More specifically, one current economic theory that is widely agreed upon holds that cutting taxes for the wealthy and providing subsidies for large corporations is the only way to maintain economic growth as well as job growth. This theory is maintained despite mounting empirical evidence to the contrary. As a recent study by the nonpartisan Congressional Research Service notes, “there is little evidence over the past 65 years that tax cuts for the highest earners are associated with savings, investment or productivity growth.”3Other prominent perspectives on economic inequality take more critical approaches, although some of the most common stereotypes also fail the reality test. One common assumption, for instance, is that the wealth gap is a matter of the so-called First World versus the so-called Third World. In the Americas, for instance, many believe that wealth resides north of the US-Mexico border, and that poverty resides to the south of it. Nevertheless, the world’s wealthiest individual is currently a Mexican citizen, business magnate Carlos Slim Helú. The case of Slim is, of course, [End Page 153] only the tip of the iceberg, as a tremendous amount of wealth resides in many places “south of the border.” Whenever I take seminary students on immersion trips into countries of the so-called Third World, I make it a point to take them not only into the poor neighborhoods but also into the wealthy ones.Observing wealth in Third World contexts never fails to create substantial cognitive dissonance, as most US residents do not expect to see so many expensive cars and expansive villas in São Paulo, Brazil; Lima, Peru; or Harare, Zimbabwe. By the same token, even most US residents do not expect to see so much dire poverty in the United States, although it often resides only a few miles from where they live. According to the National Center for Children in Poverty, 21 percent of all children in the United States live in families with incomes below the poverty level.4 Without ignoring the economic differences between North and South, substantial economic inequality exists in both so-called Third World and First World settings.Whose Wealth?One crucial insight emerges from our reflections so far: when we talk about an ethics of wealth in a world of economic inequality, we need to ask whose wealth we are discussing. When we are talking about wealth in many Christian communities, we tend to talk about ourselves and about the perceived wealth of the so-called middle class. What we are rarely discussing, however, is the tremendous wealth that is amassed at the upper levels of society, with the proverbial 1 percent or the 0.1 percent. I have observed similar discourses for many years, all around the world. There are several problems with this discourse.One problem is that by talking about members of the middle class as representatives of wealth, we fail to investigate the full scale of economic... (shrink)

In terms of income and wealth (and a variety of other measures), citizens of the United States are significantly less equal than their peers in Canada and Europe. In addition, American society is becoming increasingly less equal. Some theorists argue that this inequality is inefficient. Others claim that is unjust. Many Americans, however, are less concerned with the potential inefficiency and injustice of growing inequality. Distinguishing as Milton Friedman does between equality of result and equality of (...) opportunity, many claim that American inequality is greater because our social and political institutions hold individuals responsible for their decisions. There is nothing unjust about holding individuals responsible for their choices or preferences. This political philosophy builds from the popular idea that, in the words of Dennis Prager of the Heritage Foundation, “American individualism and the Judeo-Christian notion of personal accountability gave us the extraordinary nation that we built here.” At least since the publication of the Republican Party’s Contract with America, every prominent Republican (and many Democrats) has affirmed the importance of personal responsibility. The idea of personal responsibility plays a central role in debates over how to structure U.S. society. For these reasons, this paper considers a group of theories that Elizabeth Anderson labels “luck egalitarian.” These theories remain the most influential philosophical attempts to incorporate personal responsibility into a theory of justice. This essay takes as its staring point Anderson’s widely discussed criticisms for these theorists, and considers several of the best and most sustained responses to these criticisms (and related claims by Samuel Scheffler, Jonathan Wolff, and others). The goal is not to provide a summary of different luck egalitarian accounts of justice, a task others have performed admirably (Knight 2009, Knight and Stemplowska 2011). Furthermore, this paper will not attempt to decide which luck egalitarian theory best withstands these criticisms. Instead, this paper makes a philosophically and empirically informed case regarding how policy makers ought to utilize a principle that plays a prominent role in current American public policy debates: the role of personal responsibility. In order to make this case, I must weave normative and empirical analysis, and consider the ways in which social position in the status quo United States does not trace personal responsibility. From this analysis, I suggest three policy priorities for those interested in redeeming the oft-celebrated claim about American society: that an individual is responsible for her social position. This work promises to be of interest to any theorist or policy maker concerned with the practical implications of recent work in the moral and political philosophy of personal responsibility, or, really, anyone interested in making American society comparatively just. (shrink)

Socioeconomic inequalities are functions not only of intrinsic differences between persons or groups, but also of the dynamics of their interactions. Inequalities can arise and become stabilized if there are advantages (such as generalized wealth including “human capital”) which are self-enhancing, whereas depletion of limiting resources is widely distributed. A recent theory of biological pattern formation has been generalized, adapted and applied to deal with this process. Applications include models for the non-Gaussian distribution of personal income and (...) class='Hi'>wealth, for overall economic growth in relation to inequalities and for effects of uncoupling strategies between developing and developed countries. Note added after publication: The equations (14) for the model of the income distribution, with its characteristic non-Gaussian extension towards higher incomes (fig.4), are closely related to the Fokker-Planck equation that is widely applied in many fields of physics. (shrink)

Liberal egalitarians argue that the state is justified in taxing members of a political community to achieve distributive justice and ensure political equality and regime stability. This involves an uneasy compromise between equality and efficiency, a compromise that many argue has recently been undermined by the growth of unchecked wealth and income inequality. This essay argues that there is also a trade-off between selecting fair processes for taxation and aiming for particular distributive outcomes. The way people accumulate (...) wealth, and the way states tax often matters more than distributive outcomes. Policymakers must allow for the fair assessment of tax liabilities, avoid excessive enforcement costs and prevent political actors from using tax systems to achieve their partial ends. Recognizing these considerations justifies a systematic scheme of taxation while constraining the mechanisms for collecting revenue. I justify this position using comparative analysis, which I contrast with the conceptual intuitionistic approach associated with egalitarianism. (shrink)

Selected as a Financial Times Best Book of 2013Governments today in both Europe and the United States have succeeded in casting government spending as reckless wastefulness that has made the economy worse. In contrast, they have advanced a policy of draconian budget cuts--austerity--to solve the financial crisis. We are told that we have all lived beyond our means and now need to tighten our belts. This view conveniently forgets where all that debt came from. Not from an orgy of government (...) spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Through these actions private debt was rechristened as government debt while those responsible for generating it walked away scot free, placing the blame on the state, and the burden on the taxpayer. That burden now takes the form of a global turn to austerity, the policy of reducing domestic wages and prices to restore competitiveness and balance the budget. The problem, according to political economist Mark Blyth, is that austerity is a very dangerous idea. First of all, it doesn't work. As the past four years and countless historical examples from the last 100 years show, while it makes sense for any one state to try and cut its way to growth, it simply cannot work when all states try it simultaneously: all we do is shrink the economy. In the worst case, austerity policies worsened the Great Depression and created the conditions for seizures of power by the forces responsible for the Second World War: the Nazis and the Japanese military establishment. As Blyth amply demonstrates, the arguments for austerity are tenuous and the evidence thin. Rather than expanding growth and opportunity, the repeated revival of this dead economic idea has almost always led to low growth along with increases in wealth and income inequality. Austerity demolishes the conventional wisdom, marshaling an army of facts to demand that we austerity for what it is, and what it costs us. (shrink)

How rich should the 1% be? And, most importantly, when does the distance in economic resources between the richest citizens and ‘us’, the average citizenry, become a concern for justice? This volume explores how excessive economic inequality gives the best-off considerably more political influence than average citizens, thereby violating political equality. It argues that the gap between the best-off and the worst-off should not be reduced because it is good, but rather as an inescapable instrument to protect citizens from (...) the risk of material domination. For this reason, it defends the ‘principle of proportionality’: economic inequality should not exceed a certain range or proportion to enable both the best-off and the worst-off to be co-authors of the legal, political, and socioeconomic rules that govern the ‘social’ relations in which they are involved. Further, the book discusses material domination and explains how money influences politics and what are the remedies for this phenomenon; how social justice should face and harmonise power, poverty, efficiency, individual merit, and economic liberties; and, most importantly, how to determine income and wealth limit ratios in a liberal democracy. A thoughtful investigation on the interdependencies of money and justice and their influence our socio-political systems, this volume will be of great interest to students and researchers of political theory, political philosophy, economics and development, economics theory and philosophy, and social policy. (shrink)

Widespread recognition that economic inequality has been growing for forty years in most of the developed world, and in fact has tended to grow across most of the history of modern economies, shows that the period 1945-1973, when inequality of wealth and income shrank, was a marked anomaly in historical experience. At the time, however, the anomalous period of equality seemed to vindicate a long history of optimism about economic life:that growth would overcome meaningful scarcity and (...) usher in an egalitarian and humanistic period that could almost qualify as post-economic. This has not been the experience of the last four decades. In this intellectual history of the anomalous period, we trace the main lines of that optimism and its undoing. (shrink)

_Examining inequality through the lenses of moral traditions_ Rising inequality has attracted a great deal of attention in recent years from scholars and politicians, but the moral dimensions of inequality tend to be ignored. Is inequality morally acceptable? Is it morally permissible to allow practices and systems that contribute to inequality? Is there an ethical obligation to try to alleviate inequality, and if so, who is obligated to take that action? This book addresses these (...) and similar questions not through a single lens of morality but through a comparative study of ethical traditions, both secular and religious, Western and non-Western. The moral and political traditions considered are: liberalism, Marxism, natural law, feminism, Buddhism, Judaism, Islam, Christianity, and Confucianism. The types of inequality examined include property, natural resources, products, wealth, income, jobs, and taxation. The editors open the book with an introduction providing information on contemporary dimensions of the problem of economic inequality, and the book concludes with a summary of the perspectives represented. _Economic Inequality and Morality_ is unusual in that it addresses similarities and differences on the questions of inequality within and across moral traditions. Authors of the individual studies answer a common set of topic-related questions, giving the reader a broad perspective on how a broad range of traditions view and respond to inequality. (shrink)

Competing arguments surrounding the relationships between inequalities and labor rights have persisted over time. This paper explores whether labor rights increase or decrease two types of wage inequalities: vertical inequality and horizontal inequality. Vertical inequalities reflect inequalities in wealth or income between individuals, while horizontal inequalities reflect inequalities between social, ethnic, economic, and political groups which are usually culturally defined or socially constructed. By broadening the scope beyond traditional indicators of inequality (i.e., vertical inequality) (...) to include horizontal inequality, we test whether government respect for labor rights can help reduce inequality. We find that as labor rights and practices improve, countries see a decrease in horizontal inequality. Furthermore, as stronger protections for labor rights improve within countries, this also serves to reduce individual levels of inequality (i.e., vertical inequality). (shrink)

One might think that inequality of income and wealth are a special cause for concern only nowadays. But, perhaps surprisingly, equality and inequality of resources are issues addressed by Aristotle in his Politics. I first discuss Aristotle’s suggestion that equality of resources is a way of avoiding faction. I then discuss Aristotle’s relatively neglected critique of Phaleas of Chalcedon’s proposal for equal plots of land, arguing that Aristotle actually improves on Phaleas’s ideas in his own proposal (...) for a second-best constitution. In such a constitution, Aristotle avoids the hour-glass distribution of rich and poor that is a modern problem. His proposal also incorporates some aspects of his famous doctrine of the mean. I then briefly discuss the question of resources in Aristotle’s ideal city of the Politics and in his ethical works, speculating on the question why distributive justice in relation to wealth is not addressed in the passages of the Politics I discuss. I conclude with some brief reflections on modern and ancient views. (shrink)

For several centuries, economists, sociologists, and philosophers have been concerned with the magnitude and e¤ects of inequality. Economists have concentrated on inequality in income and wealth, and have linked this inequality to social welfare, aggregate savings and investment, economic development, and other issues. They have explained the observed degree of inequality by the e¤ect of random shocks, inherited position, and inequality..

What is the relation between monetary policy and inequalities in income and wealth? This question has received insufficient attention, especially in light of the unconventional policies introduced since the 2008 financial crisis. The article analyzes three ways in which the concern central banks show for inequalities in their official statements remains incomplete and underdeveloped. First, central banks tend to care about inequality for instrumental reasons only. When they do assign intrinsic value to containing inequalities, they shy away (...) from trade-offs with the standard objectives of monetary policy that such a position entails. Second, central banks play down the causal impact monetary policy has on inequalities. When they do acknowledge it, they defend their actions by claiming that it is an unintended side effect, that it is temporary, and/or that any alternative policy would fare even worse. The article appeals to the doctrine of double effect to criticize these arguments. Third, even if one accepts that inequalities should be contained and that today’s monetary policies exacerbate them, is it both desirable and feasible to make containing inequalities part of the mandate of central banks? The article analyzes and rejects three attempts on the part of central banks to answer this question negatively. (shrink)

Measured inequality has increased tremendously between the 1960s and 1990s, not only in the United States but throughout the majority of industrial nations. Wages among people of the same race and gender have become less equal. The hours worked by men have fallen, and the drop has been more pronounced among those who earn lower wages—as a result, inequality in labor income, which is the product of the wage rate and hours worked, has increased relative to (...) class='Hi'>inequality in wage rates. Moreover, among married couples, employment of the wives of high-income men has increased until these wives are approximately as likely to be employed outside the home as are the wives of low-income men, who have always worked for wages. In addition, due to assortative mating, wage rates of husbands and wives are positively correlated, and it is clear that the growth in inequality of labor incomes among families has outstripped the growth in inequality in individual labor income. Finally, only the highest-income families have savings in excess of home equity and company-sponsored pensions, which implies that inequality in wealth among families has been exacerbated by the growth in stock prices. (shrink)

Discrimination against particular groups has existed throughout history and in all types of societies. Few would challenge the idea that inequality of income based on discrimination is unjust. The more problematic issues are the extent to which discrimination is in fact a significant source of inequality and whether such discrimination-based inequality is inherent in a capitalist system. There is little doubt that discrimination can affect a group's income. But the link is by no means automatic (...) or certain. Thus, the incomes of blacks, particularly in past decades, seem surely to have been lowered by discrimination. Yet other examples are less clear. Jewish and Japanese Americans, for instance, have had incomes substantially above those of white non-Jewish groups, despite evidence of discrimination against them. (shrink)

Over the last century, many philosophers have argued in favour of a liberal-egalitarian accommodation of capitalism, in which the liberty of the market is to be combined with an egalitarian distribution of property. Theorists of positive freedom, amongst others, have been prominent in arguing for the liberal-egalitarian accommodation. They have argued that an egalitarian distribution of private property is necessary to give every citizen equal positive freedom. To lead an autonomous life, every citizen needs control over some private property. The (...) liberal-egalitarian accommodation to capitalism has come under threat in the last decades, as documented by a renewed widening of inequalities in wealth and income. In this essay, I will argue that this predicament requires us to look at one important precondition of the positive freedom argument. This precondition I call the de-politization of private property. Private property is conceived of as a purely private phenomenon, which has no effects on the exercise of political power. However, whether this precondition is met is a contingent matter; and so defenders of the positive freedom argument therefore need to turn their attention to the problem posed by the relation between private property and political power. (shrink)

ABSTRACTThe concept of poverty is understood differently by people across the globe. Despite this conceptual limitation, higher economic growth in the last few decades in many countries has helped reduce extreme global poverty. The growth process has been supported by globalization. The number of global poor is, however, still quite large and more than the entire population of USA, UK, France and Russia. Their numbers have gone up by 100 million in Sub Sahara region in last three decades. While removal (...) of extreme poverty is clearly vital, it cannot be considered sufficient for a dignified life. The crux of human dignity is development and it must provide every individual access to education, healthcare, nutrition, habitat, and exercising of democratic rights in accordance with the rule of law. While helping reduce poverty, globalization has also led to some morally unsustainable consequences. There is huge and rapidly increasing inequality of wealth and income in most nations. There are now new opportunities for corruption which are being exploited by multinationals. These corrupt practices are resulting in illicit flow of about one trillion Dollars every year. For a more ethical society, effective measures are needed for controlling corruption for improving quality of life. (shrink)

From the author of the #1 New York Times bestseller On Bullshit, the case for worrying less about the rich and more about the poor Economic inequality is one of the most divisive issues of our time. Yet few would argue that inequality is a greater evil than poverty. The poor suffer because they don't have enough, not because others have more, and some have far too much. So why do many people appear to be more distressed by (...) the rich than by the poor? In this provocative book, the #1 New York Times bestselling author of On Bullshit presents a compelling and unsettling response to those who believe that the goal of social justice should be economic equality or less inequality. Harry Frankfurt, one of the most influential moral philosophers in the world, argues that we are morally obligated to eliminate poverty—not achieve equality or reduce inequality. Our focus should be on making sure everyone has a sufficient amount to live a decent life. To focus instead on inequality is distracting and alienating. At the same time, Frankfurt argues that the conjunction of vast wealth and poverty is offensive. If we dedicate ourselves to making sure everyone has enough, we may reduce inequality as a side effect. But it’s essential to see that the ultimate goal of justice is to end poverty, not inequality. A serious challenge to cherished beliefs on both the political left and right, On Inequality promises to have a profound impact on one of the great debates of our time. (shrink)

The problem of economic justice is the division and distribution of income and wealth. Is a just distribution an equal distribution, or are some unequal distributions just, and if so which ones? We critically examine what the ideal theories of justice of Aristotle and Rawls say or imply about a just distribution of wealth and income in the best of circumstances. Rawls’ contractarian view takes strict equality to be the benchmark of justice; Aristotle’s teleological theory claims (...) that the equality appropriate to distributive justice is proportional, equality of ratios among persons’ shares of a good and their respective merits for that good. The applications of the two theories result in different distributional outcomes. Aristotle’s justice principle will result in unequal outcomes if the merits of persons are unequal and in equal outcomes if the merits are equal. An example of the latter is his best polis and constitution--its ideal citizens will have superlative and equal merits and they will justly receive equal political and economic shares. Although he supports reducing economic inequalities in actual cities, serious inequalities in resources will remain. Rawls’ basic principle of justice will produce equal shares. But democracies allow great inequalities in wealth and income, presumably recognizing that some inequalities promote the common good; everyone is better off when some economic incentives are rewarded. But which economic inequalities are just? Rawls in his second principle of justice identifies the most widely held way of answering this question. (shrink)

Thomas Piketty’s evidence on wealth distribution trends in Capital in the Twenty- First Century shows that – contra his own interpretation – there has been little rise in wealth inequality in Europe and America since the 1970s. This article relates that finding to the other principal trends in Piketty’s analysis: the capital/national income ratio trend, the capital-labor split of total incomes and the income inequality trend. Given that wealth inequality is not rising (...) markedly, what can we deduce about the putative causes that might be operating upstream? Only the capital-labor split looks like a plausible explanation of the wealth inequality trend. (shrink)

Chapter 3 discusses the causes, patterns and dynamics of inequalities in an exhaustive review of the literature on inequality of income, expenditure and wealth among individuals and households. It emphasizes how these inequalities reflect and affect inequality along various dimensions, including political freedom, economic opportunity, health, education and social outcomes. It gives three sets of policy recommendations for different populations: policies to improve the conditions among the poor, the vulnerable and the socially excluded; policies geared towards (...) supporting the growth and sustainability of a strong middle class; and policies that seek to curb concentration of income and wealth at the top. Some of these policy recommendations are quite consistent with what has often been proposed for the past three decades, which is that redistributive policies or welfare at the bottom should benefit the least well-off and address inequality. (shrink)

This the first part of a study (in two parts) devoted to Piketty’s theses on the history of capitalism. A summary of Pikety’s analysis is first presented, concerning the dynamics of total wealth (measured as a ratio to national income) and its components, and the tendency of wealth and income inequalities within major capitalist countries. The amplitude of the fall of total wealth in the United-Kingdom and France during World War I is questioned. Piketty explains (...) the profile of these variables concerning wealth and wealth inequalities in reference to historical mechanisms in which the rate of growth of output, the rate of savings, and the return on wealth are considered. The relevance of these mechanisms is basically questioned. We interpret the third component of wealth, other domestic capital, as a form of the capital of enterprises and substitute an alternative, more performing, model to account for the profile of this variable. (shrink)

There is currently enough systematic literature presents about socioeconomic inequalities across different disciplines. However, this study relates socioeconomic inequality to rural students educational management information systems in different schools in China. The dynamic force of information technology could not be constrained in the modern techno-based world. Similarly, the study was qualitative and ethnographic. Data were collected through an interview guide and analyzed with thematic scientific analysis. Ten male and ten female students were interviewed based on data saturation point. The (...) purposive sampling technique was used for the rural school and students’ selection. This study summarizes the findings and brings together in-depth emic and etic findings based on new Marxist conflict theory, exploitation, and domination power lens. The study found that SEI creates disparities among EMIS. Household income inequality has influenced on educational achievements of rural areas’ students. Gender-based SEI was not present among students. Family wealth and SES-based exploitation are present regarding EMIS among male and female students. Household wealth is significant for the EMIS. The study put forward a recommendation to the policymakers that exploitation could be overcome among students if the government provides equal opportunities for access to the EMIS. (shrink)

According to conventional wisdom, the causes of economic inequality under capitalism are different in kind from those operating in a socialist system. In socialist societies today the distribution of wealth and income is determined by political authority, whereas in capitalism it is thought to arise mainly from the choices of individuals freely transferring goods and services in the competitive market. Robert Nozick's account of the workings of a ‘free society’ expresses this view clearly:There is no central distribution, (...) no person or group entitled to control all the resources, jointly deciding how they are to be doled out. What each person gets, he gets from others who give to him in exchange for something, or as a gift. In a free society, diverse persons control different resources, and new holdings arise out of the voluntary exchange and actions of persons … The total result is the product of many individual decisions which the different individuals involved are entitled to make. (shrink)

Thomas Piketty'sCapital in the Twenty-First Centuryis a tour de force—a compelling and accessible read that presents an eloquent and convincing warning about the future of capitalism. Capitalism, Piketty argues, suffers from an inherent tendency to generate an explosive spiral of increasing inequality of wealth and income. This inegalitarian dynamic of capitalism is not due to textbook failures of capitalist markets (for example, natural monopolies) or failures of economic institutions (such as the failure to regulate these monopolies), but (...) to the way capitalism fundamentally works. Unless the spiral is controlled by far more progressive taxation than is now the norm, the political fallout could undermine the viability of the successful “social state” (p. 471) in the advanced economies, putting the democratic state itself at risk. (shrink)

Federal political orders often exhibit a conflict between the ideals of equality and political autonomy, since individuals in different subunits often enjoy systematically different standards of living conditions. While federal arrangements may be theoretically attractive to avoid despotism, such federal inequality would appear to conflict with the principles of egalitarian cosmopolitanism. The paper argues that individuals' interest in equal shares of income and wealth may legitimately be weighed against their interest in political control enjoyed by their subunit, (...) as long as the inequalities do not engender misery, domination, or unfair procedures. The reasons for subunit autonomy include reducing the risk of domination, increasing the responsiveness to local preferences, and reducing the burdens of decision making. These arguments also suggest that states may not always be the appropriate subunits in legitimate federal orders. (shrink)

The paper reviews statistical models for money, wealth, and income distributions developed in the econophysics literature since the late 1990s. By analogy with the Boltzmann-Gibbs distribution of energy in physics, it is shown that the probability distribution of money is exponential for certain classes of models with interacting economic agents. Alternative scenarios are also reviewed. Data analysis of the empirical distributions of wealth and income reveals a two-class distribution. The majority of the population belongs to the (...) lower class, characterized by the exponential (“thermal”) distribution, whereas a small fraction of the population in the upper class is characterized by the power-law (“superthermal”) distribution. The lower part is very stable, stationary in time, whereas the upper part is highly dynamical and out of equilibrium. (shrink)

Income inequality is emerging as the socioeconomic topic of our era. Yet there is no clear conclusion as to how income inequality affects the most comprehensive human outcome measure, subjective well-being. This study provides an explanation for the relationship between income inequality and SWB, by delving into its mechanisms, including egalitarian preferences, perceived fairness, social comparison concerns, as well as perceived social mobility. In a rigorous analysis using a large cross-country dataset, and accounting for (...) the nested structure of the data, as well as controlling for a variety of individual and country characteristics, we find that SWB is higher where income inequality is higher. Importantly, we also find support for this relationship being moderated by perceptions of poverty being caused by unfairness, an individual’s relative socioeconomic standing, as well as beliefs about hard work leading to success. Our study highlights the dire need for further scholarly attention to income inequality and its complex effects on SWB. (shrink)

Why Does Inequality Matter?is the long-awaited book-length development of T. M. Scanlon's views on objectionable inequality, and our obligations to eliminate or reduce it. The book presents an impressively nuanced and thoughtful analysis as well as succinct explanations of different objections to various forms of inequality. It is not only set to further cement Scanlon's influence on philosophical debates about equality but also makes a good guide to the problems of inequality for the nonspecialist reader. The (...) book is not without faults, however. Even within a pluralist approach to inequality such as Scanlon's, it is not sufficiently clear what, if anything, his specific objections to status inequality, and to control over other people's lives, have in common with his other egalitarian objections to inequality of political influence, opportunity, and income and wealth—or whether, in the case of control, the objection is egalitarian at all. (shrink)

This article explores how and why high levels of income inequality result from configurations of different types of entrepreneurial activities and elements of the institutional context in a multicountry sample. A configurational approach is used to unpack the complexities associated with how income inequality arises from different types of entrepreneurial activities embedded in different institutional contexts associated with Whitley’s national business systems dimensions. The findings from fuzzy-set qualitative comparative analysis reveal that high levels of both high-growth (...) and necessity entrepreneurial activity are associated with income inequality in certain contexts that are characterized by distinct institutional complementarities. (shrink)

For transition economies, income inequality is positively correlated with the share of output produced in the informal economy. Increases in income inequality also tend to be correlated with increases in the share of output produced in the unofficial economy. These hypotheses are supported significantly by empirical data for sixteen transition economies between 1987 to 1989 and 1993 to 1994. Various causal mechanisms may operate in both directions, an increasingly large informal economy causing more inequality due (...) to falling tax revenues and weakened social safety nets, and increasing inequality causing more informal activity as social solidarity and trust decline. (shrink)

Bender, Robert Review of: Income inequality, equality of opportunity and intergenerational mobility, by Miles Corak, Institute for the Study of Labor, Bonn University, 2013, 32 pages.

The paper reviews statistical models for money, wealth, and income distributions developed in the econophysics literature since the late 1990s. By analogy with the Boltzmann-Gibbs distribution of energy in physics, it is shown that the probability distribution of money is exponential for certain classes of models with interacting economic agents. Alternative scenarios are also reviewed. Data analysis of the empirical distributions of wealth and income reveals a two-class distribution. The majority of the population belongs to the (...) lower class, characterized by the exponential (“thermal”) distribution, whereas a small fraction of the population in the upper class is characterized by the power-law (“superthermal”) distribution. The lower part is very stable, stationary in time, whereas the upper part is highly dynamical and out of equilibrium. (shrink)