Not Demanding Fracture of ‘Invisible Hand’

Equality is defining feature of our modern societies, which gained a lot of prominence post-French Revolution of 1789, clearing the way for the equal and universal adult franchise (one person, one vote), gender equality, equality of opportunity irrespective of social and economic background, etc., However, nothing was given without struggle and protest, often violent.

Having achieved some success in ensuring social equality, today we are more concerned about ‘economic inequality’ i.e., a huge gap between the haves and have nots, further brought into the limelight by Covid-19.

From enlisting ‘mitigation of economic inequality as an SDG to setting up recent ‘Global Tax Regime’, nations are continuously striving to achieve it or at least they look like doing so.

But what is it we tend to achieve through the abolition of economic inequality, do we want absolute equality of wealth and income, as we witnessed in the former USSR? Which precipitated mass poverty and concentration of wealth and power in few hands.

But didn’t our so-called ‘liberal-democratic-capitalist-laissez-faire’ nation-states lead us to the same consequences only with some minor differences i.e., slow poverty alleviation and quick wealth and power concentration?

I leave it to you to interpret and analyze.

However, when we are demanding for economic equality, we aren’t/shouldnot demand absolute economic equality as it will snatch away motivation to innovate and will be fracturing Adam Smith’s ‘Invisible Hand’ (i.e., Supply and demand concept >– price and cost >– profits >– motivation to do better), as happened in former USSR leading to its disintegration.

Rather what we are demanding is ‘Equality of Opportunity’, which means the right to survive of small fish (it does not mean spoon-feeding by state) and become bigger fish one day if it desires so.

The creation of wealth is not bad, is even desirable, but wicked means employed for its creation are. For example- tax evasion using shell companies, shifting HQ to tax heavens (the race to the bottom), by finding loopholes in taxing policy itself, further, using public entitlements, moulding and influencing state policies for personal gains, employing unfair means to fight competitions, etc., thus, leaving many in miserable conditions and killing potential of growing.

Such wealth creation does not lead to innovations and rise in the standard of living rather also ruins the previous achievements.



Categories: General, Governance and Transparency, International Affairs, Politics, Polity and Governance, Society

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