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INEQUALITY
CLASSICAL LIBERALS
MERVE DOANER
SNEM SONUGR
OUTLINE
I. Introduction
II. Explanation of Inequality
a. Individual Productivity
b. Individual Preferences
c. Technology
d. Government Intervention
III. Arguments for Inequality
a. Freedom
b. Justice
c. Efficiency
IV.Responses to Poverty
V. Conclusion
Introduction
In the nineteenth century, the
concentration of wealth and power led to
public hostility toward big business, paving
the way for increased regulation of the
economy.
In the early twentieth century, Congress
legislated progressive income and
inheritance taxes.
After the Great Depression, even stronger
efforts were made to address the problems
of poverty and inequality.
I. Explanations of Inequality
Classical Liberals offer the following
explanations of inequality:
a. Individual Productivity
In the late nineteenth century, John Bates
Clark
developed the marginal productivity theory.
John Bates Clark
American neoclassical economist
One of the pioneers of marginalist
relovution
Opponent to institutionalist school of
economics
The Philosophy of Wealth (1866)
MarginalProductivity Theory: Income distribution
to demonstrate that a perfectly competitive
market rewards each factor of production in
accordance with its contribution to output.
Poverty be ignored.
Although some Classical Liberals favored
private charity as a solution to poverty,
they warned that any assistance should
be minimal so as retain incentives to
work.
Classical Liberals to adopt a more activist
stance toward poverty.
Classical Liberals acknowleged a public
responsibility to aid citizens damaged by
misguided government policies.
Conclusion
Hierarchy and privilege cause
inequality. So, Classical Liberals effort to
demolish privilege and hierarchy.