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Sakmongkol ak 47

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Wednesday, 2 September 2009

Causes of Uneven Income Distribution.

I found this short article in Cafe Hayek worth reading. In just a short passage, it explains the reason behind uneven income distribution. Of course it assumes that the political, social and even historical background under which economic actors behaved and acted are neutral. Assuming they are, then uneven income distribution can be explained thus:-


 

Most wealth is created de novo in the process of applying ingenuity to comparatively worthless commodities, and the benefits flowing from consumers to providers in a free society bear no relation to any distributive or merit-based calculus.  There can exist no principles of just conduct – which necessarily imply free choice – that would produce a pattern of wealth distribution which could also be called just.  It is logically impossible to have a game in which both the actions of the players and the final score can be subject to rules of fairness.  If it is unfair for one team to outscore another by more than a certain margin, the behavior of the players will have to be directed by the umpires.  But if the players are to be free to act within rules of fair play, the outcome logically cannot be said to be unfair.  Likewise, if citizens following all the rules of just conduct become wealthy, there is no basis on which to condemn the resulting distribution of wealth as "unjust."  If no one actually commits an injustice, then no moral principle can reconcile justice to individuals with social justice after the fact.  Only in centrally directed social systems, such as the military, can social justice even make sense, as there are no rules of just conduct in settings where individuals are instructed what to do.

I hope this short passage can provoke thinking on this subject.

5 comments:

Anonymous,  2 September 2009 at 10:21  

Dato,

I strongly believe that this;

‘Likewise, if citizens following all the rules of just conduct become wealthy, there is no basis on which to condemn the resulting distribution of wealth as "unjust." If no one actually commits an injustice, then no moral principle can reconcile justice to individuals with social justice after the fact.’

preciously described the current situation in M’sia!

No doubt, that paragraph is used to picture an economic scenario, it can adequately applied to the M'sian political arena.

The Malay M’sian has a firm grip in politic while the Chinese M’sian has been dominant in economic activities.

Why so?

R both parties not playing to the rules of the game prescribed? Or were/are some skew-whiffs in handlings, manipulated into the forms that we see now?

Food for thought, indeed!

anomie

Paranoid Android 2 September 2009 at 11:47  

Sir,

I cannot imagine any economic scenario where the socio-politcal background is neutral, but it is still an interesting read. The writer seems to imply that there can never be injustice in the context of a market free from interference. But the inclusion of the military in the discussion as social system confounds me.

As long as we are in this topic, I would just like to include Free Market advocate Milton Friedman's thoughts to what you have just posted as well.

"A society that puts (economic) equality before (political) freedom will get neither. A society that puts freedom before equality will get a high degree of both."

Time to re-examine the ideas in his book "Capitalism and Freedom"?

Anonymous,  2 September 2009 at 13:43  

Unjust if ur opponent have an 80 year headstart..and have more friends committed to provide assistance.

Thats when referee needed..to ensure input is same at starting line.

Ree,  2 September 2009 at 15:49  

Dato Sak,

If the playing field is level, then the best deserves to win. This is "fair".

However, in real life the playing field is never level.

Nik 2 September 2009 at 18:45  

Dato'

As you said,

"Of course it assumes that the political, social and even historical background under which economic actors behaved and acted are neutral."

No such thing totally exist in modern society...
In Malaysia...Those who do not have connections tilt the field in their favour using monetary means...(MACC is there to deter this).
Others with political or personal connections use these means to leverage the outcome in their favour....
Syabas to those who made gains through their own independent merit.

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