Re: Income distribution [and growth]

["Harry L. Cook" <hlc710@xxxxxxxxxxx>]

John,
The common sense of income distribution is  that it is about 90% the
consequence of concentrated political and economic power.

Teachers, labor unions and big business all contribute to political parties
and candidates who they think will be good for the country and for them.  It
seems possible that the contributors with the most money will have the most
influence in shaping the institutional structure to their advantage.
                            Harry
----- Original Message -----
From: "John Gelles" <johng@xxxxxxxxxx>
To: "Post Keynesian" <pkt@xxxxxxxxxxxxxxxx>; "Harry L. Cook"
<hlc710@xxxxxxxxxxx>; <haselton@xxxxxxxx>; "Gunnar Tomasson"
<gunnar.tomasson@xxxxxxxxxxx>
Cc: "Victory Over Want" <vow@xxxxxxxxxx>
Sent: Saturday, August 31, 2002 3:11 PM
Subject: Re: Income distribution [and growth]


> The common sense of income distribution demands that
> it will tend to maximize income growth, (consistent with
> environmental and peace imperatives.)
>
> Such economic growth has both its supply-side and
> demand-side problems.
>
> We know there is ordinarily a chronic deficit in demand
> relative to both supply and need; (need generally asks
> that supply grow--often many times its current level).
>
> Income distribution, as a logical notion, suggests that
> we RE-distribute monetized demand from the rich to
> the poor.
>             The reasons NOT to do this proclaim that such
> added demand from the poor requires supplies of water,
> food, medicine, education, housing and care, etc., be
> radically raised to meet demand-- and then.
>             They proclaim that the motivation and
> systems to raise supply by meaningful amouints will
> be undercut by "giving" the poor money they never
> "earned" competing to be professional suppliers who
> can maximize quality and quantity of supply.
>             So, the nay-sayers offer a catch 22: the
> supply we have at any moment cannot be raised to
> help to the poor without tending to lower supply
> for everyone else including the poor.
>
> Now who is right?  Those who would redistribute
> income from the rich to the poor or those who
> won't?
>
> Under socialism the idea was to empower the poor
> to produce more supply for themselves without
> relying on the rich to take charge of the system.
>
> It is said that socialism failed on account of over-
> regulation of everything and an absence of human
> rights enforcement. Why this happened is not
> clear:  the Washington consensus claims that
> commerce and commercial systems tend to
> support freedom from over-regulation and
> freedom in general relative to protection of
> human political rights (if weak on economic
> rights needed by the poor).
>
> At Johannesburg the two sides of the argument,
> social versus commercial, are at loggerheads.
> They agree on what is needed but not on how
> to produce and distribute it. It seems to me that
> a balanced meshing together of both camps is
> necessary--and one way to mesh them is by
> reforming money and financing systems on
> which commerce relies.
>
> Money is no longer in the hands of bankers.
> Governments control it. But government is
> no longer in the hands of Lincolnesque types;
> bankers appear to control it.
>
> If Lincoln were alive today he would use his
> greenbacks (with the power that Nixon gave
> us to forget gold) and the theories of Adler
> which imply that prices--not tax revenues--are
> key to stimulating growth;   and that if work is
> rewarded by affordable "things" (and savings
> workers trust), government can spend into cir-
> culation money enough to grow an economy
> big enough to distribute income enough to
> end poverty, pollution and some of the
> threats to peace.
>             The sought after balanced meshing of
> command and commerical economies would
> rely on commands for priority programs that
> spent all the money they needed.  Commerce
> would be untaxed and unhindered--but in no
> position to monopolize production, restrain
> competition or interfere with priority programs.
>             At its heart would be money managed
> so well you wanted to have an inflation-indexed
> dollar in the bank for every dollar you were
> worth in non-monetary property.
>
>     John Gelles
>
>
>
>