Question

What is the "left" view of income distribution (prevalent in communist and socialist countries)? How do they believe wealth should be distributed and why?

300 words or less

What is the "right" view of income distribution (prevalent in capitalist countries)? How do they believe wealth should be distributed and why?

300 words or less

Answer 1

The basis of both of the essays will be based on the equity and efficiency trade off, and then would move to market failure in both cases.

1. The left view of income distribution is such that they prefer equity over efficiency. Historically, it was a new effort on a mass scale, and its failure, yet is unsoothing, but doesn't establish the opposite.

The left nations beleived that welfare is certainly not about efficiency, but about equity. That is the reason, the philosophy to argue that the current distribution is unequal and the desired equity can not be brought by efficiency. According to them, efficiency has not been able to achieve equity as efficiency is possible in an unequally distributed society, which was the prior, and hence had no reason to transit to an equally distributed society and be efficient again in the posterior. For them, the ground reason for this was unequal distribution of power and wealth, and people with those priviledges wouldn't want to lose those. Hence, they desired a state owned production means and centrally planned economy, so that it should be left to the government for equal distribution of income and wealth. The government would do it via taxing the rich and giving to the poor, but only in theory. In practice, several kind of atrocities were put on wealthy and land owners.

The equal distribution of land, which was a resource, was indeed intended for a more equal distribution of income from that resource. But several administrative, techinal and societal obstacles were there, so much so that the centrally planned economies are rarely there in this modern era, as that leaded several nations to market failures of different intensities.

2. The right view of income distribution is such that they prefer efficiency over equity. Historically, it didn't failed so much as the left, but didn't succeed either.

The right nations beleived that welfare is about efficiency, and equity is secondary objective in a society. They emphasized the trade-off between them, stating that equity would actaully leave lesser incentive for more productive and capital goods supplying agents, so much so that it would certainly compromise efficiency. That is the reason and philosophy to argue that yet the current distribution is unequal and the desired equity can not be brought by efficiency, it have to be balanced enough so that equity can be reached along with efficiency. In practice however, their reason which is given commonly by the policy makers, has been to be politically oppose from the left nations. For them, the ground reason for this was indeed unequal distribution of power and wealth, but the poorer people can be skilled via the government to be more productive and in that way, the trade-off might seem lesser and lesser in existence with time. Hence, they desired a private ownership of production means and free-market-laissez-faire economy, in which government's only role is to improve the infrastructure. The wealth and income distribution is as per the free-market.

But here also, several obstacles are there, so much so that the free-market economies, yet exist persistently in this modern era, they doesn't avoid market failures of different intensities. The efficiency objective, however much is achieved, doesn't bring about a forever kind peace in socioeconomic terms.