Posted by Prof Comisso on February 7, 2009, 3:51 pm, in reply to "Re: Utilitarianism question"
132.239.208.141
Wait a minute. Socialism and capitalism are defined by the ownership system, not the distribution of income. In capitalism, assets are woned privately and individuals derive returns from the assets they own. In socialism, assets are owned by the state and (according to K. Marx) the state is controlled by a propertyless class; assets are managed as accords with public preferences and distribution is "according to work." So, insofar as the value/price of labor varies, it is not perfect egalitarianism; it just means all income from capital and land flow to the state (society, the public, the rulers, whatever you want to call it), and individuals are paid according to the value of their labor. If you look at "classic" capitalist systems, this would be a more egalitarian distribution of income--generally, Gini indices that examine only "earned" income (phrase is from IRS and others, not Karl Marx!!) show a more equalitarian distribution than a Gini index of incomes from all sources, because only a relatively small number of people receive income from bonds, stocks, bank accounts ("unearned" income), rent, etc.
Communism, BTW, is where the "state withers away" and scarcity is no longer. So no one enforces property rights and each receives "according to need." It is also not perfectly egalitarian: sick people, for example, would receive more health care than healthy people, long distance runners or Michael Phelps more high caloric food intake than little skinny folks, etc. Needs vary.
The system Jake describes could be either capitalist or socialist--capitalism with redistribution, socialism with redistribution. BTW productivity rates in Germany, Sweden, France and many other European countries are equal to or higher than productivity rates in the US and Britain. But the distribution of income is much more egalitarian. So beware of simple minded stereotypes re incentives.
In analyzing income growth, average income is no longer used as a meaningful figure--if you have a tiny number of incredibly wealthy high income households (as was the case in the US as of 2008), the entire average goes up, even if 90% of households have not made any gains. The more meaningful figure is usually median income, and where the distribution is very skewed (USA, UK since, say, 1982), median income is significantly below average income.
We can come back to this in the business ethics unit BTW.
25
Message Thread:
« Back to thread