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Why might the poorest of the poor be better off in a high-growth economy rather than...

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yaga49 | Valedictorian

Posted June 12, 2013 at 1:54 PM via web

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Why might the poorest of the poor be better off in a high-growth economy rather than one that prioritized the achievement of income equality?

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kipling2448 | (Level 1) Educator Emeritus

Posted June 12, 2013 at 2:17 PM (Answer #1)

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The poorest sector of the economy is better off in a high-growth economy than in one that prioritized income equality because the former provides greater opportunities for personal income growth and raises standards of living rather than lowering them to common denominator.

Achieving income equality -- as opposed to working to close a broadening income gap -- means the socialization of the economy, which means less efficient practices and lower overall standards of living.  Income equality, if taken to its logical extreme, cannot exist in a democratic society with free market economic principles.  The extent of government intervention in the market place, combined with the levels of taxation required to achieve such equality, would not long survive an electoral process in which the wealthy and the middle class both suffered in deference to those on the lower rungs of the economic ladder.  Income redistribution penalizes those who are successful and benefits those who are less so.  That is not to say that the poor deserve to be poor; in most instances they do not, as they generally have had fewer opportunities for economic and social advancement.  It is does, however, mean that there are limits to how much those who ARE successful can be expected to tolerate having their earnings taken and redistributed elsewhere.

Globally, instances of the greatest income equality have occurred in the poorest nations, where the government is highly autocratic and economic freedom is minimal or nonexistent.  North Korea can be considered to have relative equality across much of the population -- Communist Party elites excepted -- but it also has millions of people on starvation-level diets and the fewest political freedoms in the world.  In other words, the poor in North Korea do not benefit from income equality; there are simply many more poor than would otherwise be the case. 

 

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