Saturday, September 17, 2005


A common feature of all economies in the world whether developing or developed is the presence of inequalities, not only in money terms but also mainly in real terms. Till now I believe inequalities have never been quantified but rather it is measured as a discrepancy between incomes.
Inequalities will never cease to exist. It can be narrowed but only to a limited extent through redistribution of incomes and wealth. Again this is against the notion of Pareto optimality as it brings down the welfare of the rich and redistribution does not seem to hold good in most economies.
The only remedy is growth-both economically and socially so that the welfare of the rich and the poor are improved; but concentrating more on the less rich by giving the poor more opportunities to work and develop. Government intervention is not the only remedy. The government has to oversee that a moderate level of competition should prevail for the provision of such opportunities. Provision of facilities in the rural areas should be given high priority and those enterprises that provide such facilities must be given incentives.