What is wrong with the economies of the West—and with economics? It depends on whether we are talking about the good or the just.
Many of us in Western Europe and America feel that our economies are far from just, though our views on justice differ somewhat. One band of economists, led for decades by the British economist Anthony Atkinson, sees the West as being in another Gilded Age of inequality in income and wealth.1 Adopting Jeremy Bentham’s utilitarian view, they would redistribute income from those in high brackets to those farther down—until we reach the highest “sum of utilities.” It is a question, though, whether this doctrine captures intuitive views of what is just.
Philosophers over these same decades have been more interested in the work by the American philosopher John Rawls. His book A Theory of Justice argues for a fundamental shift away from Bentham: economic justice is about the distribution of “utilities,” for him a word usually denoting the satisfactions of consumption and leisure, not the sum of those utilities.2 It is about the terms on which each participant contributes to the fruit of the society’s economy. For Rawls, justice requires the state to use taxes and subsidies to pull up people with the lowest wages to the highest level possible. That way, the least advantaged get the largest possible portion of the gain from people’s cooperation in the economy.
A struggle persists between these views. The Benthamite view has morphed into the corporatist idea that a nation’s government ought to provide benefits, whether in the form of money or tax advantages, or free services, to interest groups—whether corporations, or unions, or consumers—that voice a need until more benefits would be deemed to cost too much. Meeting these claims of many different interests has left little in the public purse for low-wage workers.
- Setor Financeiro E A Economia
THE ECONOMIST
What's wrong with finance
In this year’s presidential address to the American Financial Association, Luigi Zingales asked “Does Finance Benefit Society?”. He concluded that “at the current state of knowledge there is...
- A Armadilha De Ideias Ruins
Bryan Caplan explica:
Thus, the least pleasant places in the world to live normally have three features in common: First, low economic growth; second, policies that discourage growth; and third, resistance to the idea that...
- Sobre O Uso Adequado Do Crédito
Guest Post: The Proper Use Of Credit
Submitted by Tyler Durden on
04/04/2013 11:03 -0400
ETC
Federal Reserve
Free Money
Guest Post
Submitted by Charles Hugh-Smith of OfTwoMinds
blog,
Great
fortunes are built on the proper use of credit....
- Keynes' Teoria Especial
TheMoneyIllusion
A slightly off-center perspective on monetary problems.
The Special Theory of Employment, Interest and Money
I recently reread John Cochrane’s now infamous 2009 attack on fiscal stimulus for about the 4th time, and it’s not getting...
- Desigualdade Salárial Aumenta
The Economist online Income inequality is rising in rich countriesTHE gap between rich and poor has grown ever wider in wealthy countries over the past three decades. A new report by the OECD has reams of data on this phenomenon and is well worth looking...
