Table of Contents

The Elgar Companion to Social Economics

The Elgar Companion to Social Economics

Elgar original reference

Edited by John B. Davis and Wilfred Dolfsma

As this comprehensive Companion demonstrates, social economics is a dynamic and growing field that emphasizes the key role that values play in the economy and in economic life. Social economics treats the economy and economics as being embedded in the larger web of social and ethical relationships. It also regards economics and ethics as essentially connected, and adds values such as justice, fairness, dignity, well-being, freedom and equality to the standard emphasis on efficiency. The Elgar Companion to Social Economics brings together the leading contributors in the field to elucidate a wide range of recent developments across different subject areas and topics. In so doing the contributors also map the likely trends and directions of future research. This Companion will undoubtedly become a leading reference source and guide to social economics for many years to come.

Chapter 13: Income Distribution and Inequality

Frank A. Cowell

Subjects: economics and finance, methodology of economics, public sector economics, social policy and sociology, economics of social policy

Extract

Frank A. Cowell The produce of the earth – all that is derived from its surface by the united application of labour, machinery, and capital, is divided among three classes of the community; namely, the proprietor of the land, the owner of the stock or capital necessary for its cultivation, and the labourers by whose industry it is cultivated. . . . To determine the laws which regulate this distribution, is the principal problem in Political Economy. (David Ricardo, On The Principles of Political Economy and Taxation. London: John Murray, 1817 (3rd edn 1821)) 1. Introduction The central place that Ricardo accorded the subject of income distribution in nineteenth century political economy is appropriate also in twentyfirst-century socio-economics. Although the field was relatively neglected by economists for several decades, in the last 15 years there has been a resurgence of interest driven partly by developments in economic theory and partly by major developments in the interpersonal income distributions within many developed countries (Atkinson, 1997). In recent years the subject of economic inequality has developed in such a way as to have a life of its own separate from the obvious connection with the distribution of income, the distribution of wealth, the structure of wages and other related empirical topics. This distinct area of study has been built upon new insights in welfare economics and on the relationship to information theory (Cowell, 2000; Sen and Foster, 1997). Our treatment of this pair of subjects is organized as follows. Section 3 examines the ways in...

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