Chapter 15: The social economics of growth and inequality
Economic growth is of fundamental importance to social and material well-being, and it is therefore of fundamental importance to identify the determinants of growth and those conditions by which most individuals benefit from the growth process. By tradition, social economics has been particularly concerned with the social justice implications of economic theory and policy. It has also paid special attention to the nature and extent of the social embeddedness of individual decision-making. I focus on the determinants of growth, which touch upon social context, and how these determinants relate to social justice concerns. With regard to the latter, special attention is paid to the level of material well-being as well as the well-being derived from rights which enable individuals to construct and realize their true preferences. True preferences are the choices that an individual would choose to make under ideal choice conditions, such as individual freedom (absence of coercion), and full information, given their social context (Altman, 2006a; Nussbaum, 2000). Traditional and current discourse on the determinants of growth pay little heed to social context and social justice concerns, apart from the embedded assumption that sustained growth should, as a rule, improve the material well-being of the population at large – a trickle-down effect. Given a free market, inclusive of free trade and capital flows, plus the rule of law, with minimal government intervention, economic growth should be maximized, as should the material welfare of society at large.
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