Distribution - Economics and Ecology: United for a Sustainable World - page 94

But economic methodology has erected formidable bulwarks against nor-
mative arguments (those based on value), which question the fairness of dis-
tributional practices and their results. For instance, arguments in defense of
continual economic growth, as the ultimate answer to questions of distribu-
tion, contend that inequality is a necessary effect (the other side of the coin,
if you will) of the accumulations of capital required for the large-investment
projects deemed necessary to keep the economy moving. In their most vir-
ulent form, these arguments contend that concentrations of wealth (read
“inequality”) demonstrate to the worker, the underclass, or those just start-
ing out, that they, too, can reap the benefits of the “land of opportunity” if
only they are diligent and hard working. Recitation of this fairy tale could
continue ad infinitum. .
Although the fairy tale may have been more-or-less true for some peo-
ple throughout the economic history of the United States, it has not been
true for many others, no matter how hard they have worked. An old adage
helps to explain this inequity: It takes money to make money. Such amounts
of money are seldom available to the average person, no matter how hard
that person works. With the foregoing in mind, it is helpful to review briefly
the conventional wisdom of mainstream market economics on the issue of
distribution.
Every economic system employs all sorts of resources or components
of production. Here, however, we are focused on the human component,
because the primary issue with respect to the distribution of income is the
equity with which employees are treated in terms of monetary compensa-
tion for their labor. The question thus becomes one of how the products and
services generated by an economy (usually symbolized by gross domestic
product, or GDP) are supposedly reallocated or distributed to the partici-
pants in that economy, most of whom contributed in some way to its creation
and maintenance.
The theory of a free-enterprise market economy is crystal clear on this
point: The valuable products of an economic system are reallocated to the
components of production (be they people or machines) in the proportion
to which either the people or the machines contributed to the making of
the products. Pay no attention to the fact that this proportion is difficult to
determine empirically. In other words, whoever contributes to the produc-
tion of the gross national product (GNP) theoretically gets to consume it in
like measure.
Despite the superficially workable logic of this “benefits received” viewpoint,
it is fraught with perils when examined from an overall philosophical perspec-
tive. Four points, listed without additional comment, define and highlight the
structural underpinnings of the distribution theory in market capitalism:
• The “market” makes decisions impersonally.
• If you do not produce something, you do not get to consume.