Hayek's View Of Governing Inequality

In The Price of Inequality, Joseph Stiglitz argues that the rising rate of relative inequality in the United States is having drastic negative effects on the U.S. economy, and thus the government should enact new reforms in order to close the gap between the top income earners and the lowest income earners. These new policies and reforms would likely include an increase in the tax rate of high earners along with other redistribution policies. In terms of economic growth, this would be a mistake. I will argue that Joseph Stiglitz is wrong to entrust the state to enact reforms to reduce inequality, and that it is much better for the economic health of the United States to become more

Stiglitz identifies dwindling opportunity, monopoly power and tax treatment, and the investments of the government as the effects from manipulating the economy to exclusively benefit the top 1%. The societal impact becomes clear when the author states that the ultimate price is the “erosion of our sense of identity,” which includes “fair play, equality of opportunity, and a sense of community” because a majority of people realize the importance of these topics related to the success of themselves and their country (Stiglitz, “Of the 1%, by the 1%, for the 1%”). The article concludes with the significance of paying attention to common welfare as a “precondition for one’s own ultimate well-being” that the top 1% have a history of failing to grasp before meeting their

Stewart Lansley, author of ‘The Cost of Inequality: Why Economic Equality is Essential for Recovery’ speaks very seriously in “The Hourglass Society” article about inequality.

Friedrich von Hayek views about government were the opposite. Hayek believed that in the pursuit of prosperity, society’s attempts at central planning will inevitably lead to totalitarianism. He believed that central planning was inherently undemocratic because the people of a nation would be subject to the will of a small minority, becoming a means for the ruling minority in service of “social welfare.” Hayek also postulated that socialism would be inferior to a democracy for assuring equality. The competition of the free market also would provide superior regulation to the economy because the market would adjust without input from any authority, unlike the coercive nature of central planning. Hayek stated that the only way to improve the

The significance of income inequality has a major effect on the wellbeing of the social and economic makeup of the United States. It is not just an impulse, but a civic duty for every citizen of the country to partake in enacting their opinion. As Jean-Jacques Rousseau, the renowned French philosopher whose enlightened thinking influenced many of the Founding Fathers of the United States put it, “The very right to vote imposes on me the duty to instruct myself in public affair, however little influence my voice may have in them.” The uniqueness of the extraordinary government of the United States resides in the fact that its citizens partake in having an impact that best suits their interests. After considering the facts and numerous perspectives on whether a large income inequality distribution is positive or negative, you think back on your construction experience. Was what you witnessed that one day at your construction job in the nearby building an actual fact or was what you witnessed a hallucination of an oasis in your mind from the deprivation of

In Chapter 10, Stiglitz works to outline the steps we must take to make our economy operate more efficiently and fairly. Stiglitz believes that “another world is possible” (333), and that there is hope in our society in this battle against inequality. Stiglitz starts by clearly defining the argument that central to all the points he makes through out the book; “the model that best describes income determination at the top is not based on individuals contributions to society” (334). Stiglitz asserts that the first glaring inefficiency that must be addressed in our economic system is our mode for determining income. Stiglitz believes that must first start with building an economy in which individuals are rewarded based on their contributions to society, not one’s ability to successfully rent seek.

Within the United States, a multitude of Americans live in poverty, actually, according to the Census Bureau in 2010, “there were 42 million poor people in the United States,” and a large portion of those who reside in the middle class are approaching the poverty line, thus, augmenting the amount of people who live in the lower class. As a result of this occurrence, income inequality has become a paramount topic in recent times, especially in the 2016 election. In addition of politicians and other government members discussing this gargantuan issue, professors, journalists, and others have written about this topic to inform the populace about income inequality, and provided ways to fix the issue. The authors Robert B. Reich, Gregory Mantsios, Alan Ajas, Daniel Bustillo, William Darity Jr., and Darrick Hamilton are experts within the field of economics and labor; however, all of these writers are people from different backgrounds, such as Robert B. Reich, who was the Secretary of Labor under President William J. Clinton, and Alan Ajas, who is a professor at Brooklyn College. Although these authors write about income inequality and its causes in the United States, each of the three essays written have a unique focus to each of them, a unique style they are written, and unique solutions to the problem plaguing the U.S.

Income Inequality is “The unequal distribution of household or individual income across the various participants in an economy. Income inequality is often presented as the percentage of income to a percentage of population.” (Investopedia). Some believe income equality is the biggest problem of the 21st century, President Obama believes it to be “the defining challenge of our time” (white house). Some economist believe that increase inequality has a correlation effect with higher rates of health problems, social problems, that it harms economic growth, creates higher persistent unemployment and polarizes opportunity. Historically one can make the argument that other advance nations who have collapsed, have had great inequality and economic stratification. Other economist argue that true ‘equality’ is impossible because people have different skills and abilities. Income inequality natural and a benefit because I creates incentive to work harder. It’s important to understand the effects of income inequality on a nation’s society and labor force. What type of problems income inequality could cause or doesn’t cause. This essay will give a comparative study of Income inequality in the United States of America and France, and how it effects labor and economic activity.

Joseph E. Stiglitz’ The Great Divide: Unequal Societies and What We Can Do About Them is a compilation of the plethora of his essays and articles on the growing inequality gap. Like Thomas Piketty’s Capital in the 21st Century (without the historical breadth), The Great Divide is a contribution to the conversation on inequality broadly considered. Inequality is the outcome of differences in the way the society responds to the 1 percent and the rest of us in terms of education, health care, and the legal system. The contours of the conversations on inequality are mainly ideologically and formulated by the 1 percent for their benefit. A CEO receives a mammoth payoff even as the company files for bankruptcy projection. Bankers are bailed out by the tune of $700 for wrecking the U.S. economy. An important quality of the book is that it is written largely

Humans are never born equal. These individuals are birthed into the same species, and the government fills the heads of these people that every man has the same basic rights as another, yet it has become increasingly apparent that all sentient beings are born into different situations, with a bias to fit that situation. As a result, some see this wealth gap, and believe that taking wealth from the rich and equally distributing it among the poor would fix the issue. However, Equal wealth distribution will be the catalyst of rapid deterioration in the overall well-being of the economy of a nation, by virtue of past failures in government forms which attempt to close the wage gap, accompanied by the actuality that product payment is based on supply

It forms a legitimate engagement with a system that promises “the American dream” but is in fact much more negative and exploitive in practise(Stiglitz,2011).Injustice is here shaped via an economic redistribution and exchanges equality with the promise of efficiency/individual freedom. The state becomes a negative instrument as it interferes while markets become justified because of its ability to reward individuals (Hayek,1976).These rewards are however not fairly distributed and are often defined only by what the market is valuing as skilful. Drawing from patriarchy, racist and class structures one could suppose that certain groups will be excluded from equality of opportunity as they are viewed as less “skilful” due to prejudices(Hayek,1976).Just because equality exists under the law, does not mean it exist in practise. This concept denies full equal recognition and misses the fact that human actions are in fact connected to socialization rather than human nature which is a crucial for more optimistic outcome(Fraser,1995). Hayek(1976) draws the problem toward individual capabilities to coordinate(or not coordinate) their actions as inequality is neither deliberate or an undeliberate process and therefore individuals cannot

Hayek argues that social justice is meaningless, because for him, justice is that individuals are equal and have the same rights. According to Hayek, justice is not about society. The free market is a natural process, so its outcome cannot be unjust. Most people are lucky but some are left behind, but this is not unjust. It is important that all individuals start equal, unjust outcomes are not important. Hayek is against the redistribution of

First of all, although the U.S. Constitution proffers equal rights to all, money is the source of power. Consequently, when a person owns more money and they have skills that others don’t, they usually come on top begetting power and great influence in the world. Although there are many different branches of inequality, two inequalities focused in this paragraph are social inequality and economic inequality; which are closely related to one another. Furthermore economic inequality is the difference found in various measures of economic well-being among individuals in a group, among groups in a population, or among countries. To put it simply, economic inequality is the difference in wealth of the people and of the world. Also, social inequality is the existence of unequal opportunities and rewards given for different social positions or statuses within a group of society, meaning those with power and money are open to paths with more opportunities and rewards while others are only given so much opportunity, but no person should

First let us define Hayek’s theory of economics, he believed less government intervention meant more economic freedom (free markets) and when people are free to choose, (using knowledge as a tool), the economy runs more effectively. Hayek also believed that an unintentional consequence of human actions causes a spontaneous reaction, negative or positive.

His example also discussed that England has long achieved such a high level of security within these means without infringing the freedoms of its citizens (Pg. 148). Some critics of this book say that this statement on Hayek's part is contradicting with the brief cores of libertarianism in which every man or woman can provide for themselves without the government's help. What Hayek is describing here though is that he believes that every nation has a right to provide some of the basic amenities to its citizens which include food, shelter, and clothing. This will give these citizens a sense of security, and help them prosper in future endeavors. This, then establishes that every nation does truly have a right to provide some common goods to its citizens. Another point in this chapter that I found very significant was the idea of restrictionism. The definition of this term is control, and limitation of output so that prices will secure an “adequate” return (Pg. 153). The problem that Hayek describes along with this idea of a controlled economy is that it restricts multiple opportunities of