![]() Government intervention can regulate monopolies and promote competition. Without government intervention, we are liable to see the growth of monopoly power. Without government intervention, firms can exploit monopoly power to pay low wages to workers and charge high prices to consumers. In a free market, inequality can be created, not through ability and handwork, but privilege and monopoly power. Therefore income redistribution can be justified from a utilitarian perspective. Therefore, redistributing income can lead to a net welfare gain for society. A 10% increase in income gives a substantial boost in living standards and quality of life.
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