Friday, September 05, 2008

I am not a Maoist

Will slower population growth decrease the degree of inequality in the distribution of income?

Allowing the poor a chance for greater fertility control will help reduce income inequality. Increases in labor supply (due to rapid population growth) relative to other factors of wealth creation (i.e. capital and natural resources) usually reduces the rate of return to labor and increases the rate of return to the other factors.

Because high-income groups usually own these other factors – their incomes will be expected to increase disproportionately – exacerbating income inequality.

Reduced income inequality is a desirable goal of any society for various reasons. It reduces societal tensions between the ‘haves’ and ‘have-nots.’ These tensions may at times translate to increased crime rates – necessitating further public spending on security to maintain order. Reducing income inequality also leads to reducing the need (perceived or not) for ‘dole-outs.’ These are subsidies shouldered by this country’s tax base – the salaried middle class.

A just society is able to fairly reward those who work. Charity is the province of patronage politics.

No comments: