PKT message, Re: Income distribution

This is a very dismal outlook, Brett.

Mainstream economics may not have a cure for the income distribution problem, because of its reliance on consumer sovereignty in free markets. (Markets, of course, being devices to test the relative buying power of the participants, tend to reinforce differentials in wealth). However, this does not mean that SOCIETY can have no cure.

It is not many decades ago that the United Nations adopted a target of 1.0% of GDP as an annual contribution of the developed countries in aid to the developing countries. That the current average is only one third of that figure, and declining, does not prove your point but instead shows that the current international selfishness, evidenced by reliance on neo-liberal solutions to world trade and investment, is of recent origin; it is not written in the stars.

The world cannot long continue to tolerate the injustices and instabilities built into the modern financial and trading systems, whereby there continues to be a net transfer of wealth from the poor to the rich, such as through unconscionable debt repayments. Not for ethical reasons can this continue, nor for reasons of the self-interest of the West. Nor for environmental reasons, (although that is a different argument).

Your comment about 'the government' is a mystery. A problem in nearly all the Anglo-Saxon countries is declining capacity of governments to address problems, a trend brought on deliberately in the past three decades in the form of tax cuts, privatisation, deregulation and outsourcing. This also will pass, as taxpayers demand services. Also, in developing countries, the incapacity of governments is notorious - and a major cause of their poverty. It is not government which is getting richer, but corporations, which means investors, which in turn means (more-or-less) the already wealthy.

There are cures for the income distribution problem. There are proven formulae. Some social democratic states progress fairly well to that end, so long as they are not destabilised by external interference or faulty economic theory.

Geoff Edwards

PhD Student

Griffith University

Brisbane, Australia

-----Original Message-----
From: pkt-owner@xxxxxxxxxxxxxxxx [mailto:pkt-owner@xxxxxxxxxxxxxxxx]On Behalf Of Brett Haselton
Sent: Saturday, August 31, 2002 7:40 AM
To: Harry L. Cook; Post Keynesian
Subject: Re: Income distribution

As I have suggested many times, though we may be able to learn from the dead, we must also take the initiative to develop new methods for solving problems.

There is no cure for the income distribution problem.. The rich do not want to give it up. The poor don't have anything to give up/get. The only one getting richer in this modern redistribution is the govt.

-----Original Message-----
From: pkt-owner@xxxxxxxxxxxxxxxx [mailto:pkt-owner@xxxxxxxxxxxxxxxx]On Behalf Of Harry L. Cook
Sent: Friday, August 30, 2002 11:17 AM
To: Post Keynesian
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