Article Critique

Article Critique

Summary

Inequality depends upon certain economic and social factors. "Life is very tough," is a truism often repeated. This applies to many things. In terms of individual justice or injustice, inequalities of income are easy to grasp (Williamson, 2009). As agents in the workings of the national economy, however, these inequalities are far below the surface of ordinary debate. This article focuses on income inequalities in terms of political economy.

This means the economy of the whole polity the wider society within which inequalities occur and work their effects. Economic inequalities conjure up a wide array of problems of meaning, measurement, explanation, and policy prescription. The debate on inequality should be at the forefront of Latin American economic debate, for economic inequality has been growing in the Latin America for some time, and very evidently so in the 1980s.

Critique

A general statement about the relation between inequality and growth (Williamson, 2009) says that it tends to increase in early stages of economic growth and development, and to decrease in later, more mature stages of development. Distribution almost always means some degree of inequality. This turns out to be ambiguous. Inequality can be good or bad depending on a host of intricate connections with nearly all facets of economy and society (Acemoglu, Johnson, Robinson, 2002).

Income, wealth, size of firms, size of communities all functioning entities in society can be, and are, of unequal size. As a consequence, they control different sized parts of the whole that is distributed among them. This includes the control of the creation and allocation of human capital. The meaning of inequality touches on many factors, both individual and collective (Hoffman, Jacks, Levin, Lindert, 2002).

Among them are incentives to exertion; reward for effort; the resources to realise one's potential; welfare, both individual and collective; and power within society power to maintain one's private sphere versus the power of great wealth to coerce or enforce the will of the rich and the economically powerful.

This article in the very starting presents us a clear concept that Latin America has habitually been unequal (Williamson, 2009). Regardless, the incentives and rewards can depend on how entire strata of society fare in the distribution of the pie of production to which all are contributing, directly or indirectly. If there is not equal pay for equal effort, then the reward to an individual may be dwarfed by the reward for being in a favored category. Economic theory says that we get the worth of what we produce; however, daily experience tells us that any such a theory is imperfect. It is in part a tautology, for the existing distributions contribute to deciding what we are worth in the market sense. (Williamson, 2009)

How much inequality is right for maintaining both incentive and reward, while also maintaining a healthy balance in society? Too much or too little spoils the balance. This basic fact of life is what economists should keep in mind when they try to explain economic margins and economic ...