Question

To what extent is an unequal distribution of income and wealth a positive or a normative problem? Evaluate the different methods to re-distribute income and wealth in a country.
Word Limit: 700 words

Answer 1

Answer) I will answer the given question in following 7 parts and will use concepts and reasonable assumptions as and when required

1. Positive economics
2. Normative economics
3. Exploring relationship between positive economics and unequal distribution of wealth and income
4. Exploring relationship between normative economics and unequal distribution of wealth and income
5. View -whether unequal distribution is linked to postive economics or normative economics problem and to what extent
6. Evaluation of different methods to redistribute wealth and income in a country
7. Conclusion

1. Positive economics-When we talk about positive economics,we talk about cause and effect relationship ,also known as value free economics ,we look at a statement or observation and can test it scientifically,unlike normative economics it looks at what is and whether it is correct or not,for example if someone proposes that increasing tax rate can reduce poverty,we can check whether it is true or not based on past data.
2. Normative economics deals with what ought to be,it looks at moral statements or value and are comparitevely subjective such as taxes should be 0% for doctors,now this type of economics is subjective and does not follow cause and effect relationship.
3. When we talk about unequal distribution of wealth and when we look at positive economics we see that positive economics helps us with why such unequal distribution exist,we can check reasons and see if they are valid reasons or not and whether taking any steps will bring a change or not,so linking with positive economics gives us a scientific view.
4. When we link unequal distribution with normative economics we aim to look at moral viewpoint,why unequal distribution exist and what we should do to eradicate such unequality,it looks at a general view point and is lot less scientific.
5. Our view point-Based on points above relationship between positive economics and unequal distribution exist and it exists to a strong extent that is this unequal distribution exist owing to poor policy decisions,wrong methods to eradicate this difference and bad implementation,problem and solution both lies in positive economics and can be solved wiyh a scientific approach.
6. When we look at different methods to bridge this gap,first that comes in mind is taxes,now taxes have been used as a bad term for economic growth but economic growth is of no use if it serves few people and a fair tax system utilized properly can aid in building a strong economy,second method is investing in human capital to impart knowledge and skills to bridge this gap,third method is to increase minimum wages,one cannot decide the upper limit but a wage enough for atleast dignified living,fourth method is through reducing corruption and bad governance at all levels which hurts the poor most and finally gap in corporate where top leadership gets a lot more than someone at the bottom,this corporate gap should be relooked and reworked upon to see a breakthrough
7. In conclusion,I would say that unequal distribution is a big and old problem and one has to look at the reasons and remedies scientifically in order to reduce this problem.

Answer is complete.Thank you!