Modern Liberals on Inequality

How do Modern Liberals explain inequality?

• Cycles of Poverty - Lack of equality of opportunity leads to cycles of poverty.

• Market Power - Differences in power shape the distribution of income, and economies of scale result in the dominance of a few large firms.

• Discrimination - The amorality of the market allows discrimination to flourish.

• Technology - Technological advances increase inequality, as specialised knowledge is more necessary and demand for workers with common skills has decreased.

• Policy - Neoliberal policies have worsened inequality.

Why do Modern Liberals advocate greater equality?

• Social Mobility - Without substantial equality of social backgrounds, individuals cannot pursue their ambitions.

• Political Stability - Inequality breeds frustration and resentment. Both fascism and communism are fuelled by this resentment.

• Freedom - Positive liberties are essential for true freedom: basic necessities are rights as universal as negative liberties.

• Economic Growth - The poor are more likely to spend - therefore, redistributing towards them results in more spending, more jobs, and increased output.

• Social Welfare - Even a perfectly competitive market does not produce maximum social welfare.

• Justice - Intervention is necessary, as markets are never truly competitive, historical injustices still influence patterns of ownership, and the market distributes income based entirely on property rights.

What measures do Modern Liberals suggest to alleviate poverty?

• Welfare Reform - Benefits must remain, though reductions in welfare can help limit dependency culture.

• Manpower policies - Affirmative action programmes and government assistance in job searches will help the disadvantaged find work more easily.

• Liveable Wage - Individuals need money to remain out of poverty - raising the minimum wage does not necessitate unemployment.

• Education - Public education must be free and easily accessible.

• Tax Reform - Income tax must be made more progressive. This will incentivise productivity, as high-income households must earn more to maintain the same post-tax income.

• Fair Trade - International agreements must exist to combat the effects of globalisation on wage suppression and safety standards.

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