Distribution - Economics and Ecology: United for a Sustainable World - page 95

• Some inequality exists because of innately unequal endowments of
talent, skills, and training among people as workers.
• Benign competition exists at all levels of the economic process.
The results are Darwinian in that the most fit (most adaptable) survive; in
addition to which, they are supposedly value free. Observably, some people
in a mass economy fall through the cracks and either cannot work (are dis-
abled or handicapped) or cannot find a job (are unemployed). Although it is
hoped that unemployment is temporary, it is, nevertheless, tacitly assumed
that the unemployed have little training, few skills, and would thus have
low increments of productivity. Although capitalistic thinking reluctantly
acknowledges that allowances must be made for these “problems” (i.e., dis-
abled, handicapped, and unemployed people), much controversy has always
existed, from the poorhouses of Charles Dickens to unemployment compen-
sation of today, over questions concerning the nature of the support they
deserve and how much. Despite its problem areas, the capitalistic approach
to wage determination, and thus of surplus allocation, is a process much
revered in the literature of free enterprise and market economics.
The sum total of all these conditions amounts to that which economists refer
to as efficiency in the overall allocation of resources. This state of efficiency
supposedly ensures that the resources available to a particular economy are
employed in creating the maximum possible amount of human welfare within
that society or economic system. Although this intellectual construct is a prod-
uct of capitalistic, market-based economics, a similar condition of efficiency
is supposedly attainable for any economic system, be it large or small, rich or
poor, complex or simple. It refers to an economy's use of its resources (employ-
ment, harvesting, mining, depletion) in the production of goods and services
for distribution and ultimate consumption to satisfy human desires as much
as possible.
The optimistic conclusion is that the market contains enough magic to
automatically handle virtually every question dealing with distribution, and
that the resultant inequalities are explainable and acceptable. But, of course,
this says nothing about equity or fairness of the resultant patterns of distri-
bution and wealth. The fairness of distributional patterns and endowments
of wealth is supposedly a political question, not an economic one. Thus, by
its own internal logic, economics does not concern itself with fairness.
Inequality and Economic Realities
Despite this utopian notion, some simple examples will assist in under-
standing the real effects of income distribution on an economy. Assume, for