Is the pure free market distribution of wealth and income fair and just?

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Income and Wealth Distribution

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Presentation transcript:

Is the pure free market distribution of wealth and income fair and just?

What is the just ownership of Labor? Capital Goods? Land? How can we know what is just? Where would the ethics come from?

Normative economics Is there an objective universal ethic? How can we know it exists?

The universal ethic Human equality. Good: welcomed benefits. Harm: an invasion Evil: coercive harm to others. Neutral: all other acts.

Application to economics: Self ownership. Every person properly owns his wage and products of labor. Self-ownership does not apply to land. Equality implies an equal benefit from natural resources. Benefit: the rent.

How to measure inequality

The Gini coefficient

Gini gini = A / (A+B)

Redistribution Utilitarianism: maximize total utility. Welfare-state liberalism: help the poor. Allodial libertarianism: no forced redistribution. Geo-libertarianism: keep all your wage, share the land rent. Not redistribution but the proper initial distribution.

Poverty Absolute or relative. Government: 3 times minimal food. Why poverty?

Henry George in the book Social Problems: "There is in nature no reason for poverty." Bad policy causes it. Good policy can cure it.

Why poverty? Taxes that reduce wealth. Unequal land tenure Welfare just treats the effects. The poor get locked in to get aid. HG remedy: don’t tax wages, don’t restrict enterprise, share land rent.