Economics and politics - comment and analysis
26. July 2016 I Heiner Flassbeck I General

Inequality and capitalism. Part 2

Inequality and capitalism. Part 2

  1. Global inequality is decreasing

The point is often being made that a market economy is capable of decreasing inequality all by itself, without any massive state intervention in the secondary distribution. The current decrease in global inequality seems to prove this. I is presented as an indisputable fact that the catching up o…


Inequality and capitalism. Part 2

  1. Global inequality is decreasing

The point is often being made that a market economy is capable of decreasing inequality all by itself, without any massive state intervention in the secondary distribution. The current decrease in global inequality seems to prove this. I is presented as an indisputable fact that the catching up of developing countries in living standards show that market economies do not need inequality to function.

This statement is incorrect because the catching up process of developing countries is very different process from the normal process of economic development and also because catching-up itself creates new inequalities in these countries.

Take China, the country that dominated in purely quantitative terms these processes for the past thirty years, as an example. In China, decades of catching up with growth rates of up to ten percent per year have clearly led to improvements for a lot of very poor people (estimates are between 300 and 500 million people escaping from absolutely global poverty, say an income of one dollar day, to earning a few hundreds of dollars a year today). Looking at the global income distribution, the effect of poverty reduction is China, which is clearly attributable to th…
Thanks for reading this short excerpt from the paid post! Fancy buying it to read all of it?

Read Now, Pay Later

  • Buy Now

    Just agree to pay later.
    No upfront registration and payment.

  • Read Immediately

    Access your purchase immediately.
    You are only buying this article, not a subscription.

  • Pay Later

    Buy with LaterPay until you reach a total of 5 Euro.
    Only then do you have to register and pay.

powered bybeta

1-Month Pass

1 Month access to all content on this website

Back
Validity1 Month
Access toAll content on this website
Renewal No automatic renewal
Price5.00 EUR

3-Month Pass

3 Month access to all content on this website

Back
Validity3 Months
Access toAll content on this website
Renewal No automatic renewal
Price15.00 EUR

6-Month Pass

6 Months access to all content on this website

Back
Validity6 Months
Access toAll content on this website
Renewal No automatic renewal
Price30.00 EUR