Re: Income distribution

["John O'Donnell" <jackodonnell@xxxxxxx>]

With such obvious recognition of the problem economic I find it particularly aggravating that economists refuse to accept that it is the effect of taxes and subsidies [i.e. -- The costs that can be affected by government policy.] on pricing decisions of producers. The simple tactic of instituting policies that change the forms and quantitative determination of taxes and subsidies that optimize lower "variable" costs of production and increase the "fixed" costs of production while maintaining the total costs of production will inevitably increase production while at the same time ensure a more equitable distribution of the "rents" created by a viable society.

Gunnar Tomasson wrote:

Re. the following: The problem is the system - the framework of political and economic institutions that is our political economy- and unless we understand it, how it works and what makes it like it is, we can't fix it. Agree. But that is precisely why we need "economic theory and methodology" - or, more generally, since the former is inconceivable without the latter, we need "economic theory" of the kind of which Keynes wrote (1922): "The Theory of Economics does not furnish a body of settled conclusions immediately applicable to a policy.  It is a method rather than a doctrine, an apparatus of the mind, a technique of thinking, which helps its possessor to draw correct conclusions." Absent such theory, there is no way the system can be fixed except by trial and error. In the context of Paul Davidson's point the other day, "deductive logic" is of the essence for working out the inner structure of such "doctrine" or "apparatus of the mind." But, since theory so construed "does not furnish a body of settled conclusions immediately applicable to a policy", fixing the system is essentially dependent on "plain common sense". Gunnar 

----- Original Message -----

From: Harry L. Cook

To: Post Keynesian

Sent: Friday, August 30, 2002 1:16 PM

Subject: Income distribution

 With referance to income distribution.   Income distribution is a matter of politics and ideology at least as much as it is economics.  Restricting discussion of economics in general, or income distribution in particular, to economic theory and methodology may make for  intellectually amusing intercourse, but it is about as useful as doing the cross word puzzles. Income distribution is largely determined by the interplay  of  politics and economics within the framework of our political economy.  Our system may be, and is, a lot better that many other systems, but it can be argued that it has a long way to go to achieve satisfactory standards of fairness and justice. The problem is the system - the framework of political and economic institutions that is our political economy- and unless we understand it, how it works and what makes it like it is, we can't fix it. It seems to me that this is less methodology than plain common sense and common  observation, besides I am suggesting specifically that we pay some attention  what David Ricardo in the opening lines of his Principles of Political Economy said was the principal problem in political economy, namely income distribution.                                             Harry L. Cook

--
   -- jbod

  Tax Privilege, Not People
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