Question

Whats the major argument in the case for income equality?

Whats the major argument in the case for income inequality?

Answer 1

Income equality leads to less use of natural resources and less obvious consumption and standard of living for countries with equal incomes is usually lower. Equality ensures consumer satisfaction among poor and generates less political influence. There are lesser incentives for corruption and illegal financial gains.

Income inequality leads to greater incentive to work hard, higher savings and investments and high-quality and innovative products which can lead to more opportunities to stimulate the economy. This is in line with the invisible hand concept of Adam Smith which states that an entrepreneur’s selfish efforts towards well being also benefit the economy.