From: @yahoo.com

DISTRIBUTIONS OF WEALTH AND PEOPLE'S ECONOMY
(Including the Economics of Amartya Sen compared with P R Sarkar)

The question of wealth distribution requires a fundamental look at what forms
a wholistic economy.  Sarkar states that a developed economy should consist of
four parts: people's economy, psycho-economy, commercial economy and general
economy.  It is the 
people's economy that offers economic liberation and security for all.  Its
scope, implementation and invigoration of economic and human rights needs to
be brought to the forefront, as conventional economists are unable to come to
grips with the failures 
in economies around the world

Guaranteed minimum necessities

People's economy deals with the essential needs of the people in general and
with aspects such as production, distribution and marketing.  In particular,
it is directly concerned with the guaranteed provision of minimum requirements
like food, clothes, 
housing, medical care, education, transportation, energy supply and supply of
irrigational waters.  The objective is continuous improvement and ready
availability of these essentials.

In order for minimum requirements to be assured there must be guaranteed
purchasing power.  The time has come to recognise that the right to guaranteed
purchasing power is a universal and fundamental human right and as such
requires constitutional 
protection, ie there must be constitutional recognition of the benefits of
economic prosperity for all people.

Grossly unjust wealth distributions

Current laws emphasize property rights and give compensation for expropriation
and misappropriation of property whether by governments or other individuals. 
However, in doing so there is disregard as to whether the distribution of such
property rights 
can be or is justified, particularly in the case of over-accumulation.  A
highly skewed distributions of wealth ranging from some individuals amassing
billions in assets while others struggle on a few cents a day represents an
inefficient production, 
distribution and marketing system that does not serve the needs of a people's
economy.  Despite capitalism being a relatively somewhat better system than
communism in terms of the production of goods and the incentive to innovate,
the large scale wealth 
inequalities evident in capitalism does, of itself, mean that there are many
pernicious loopholes in such a free market system.

In terms of a comparison with investment theory, it is certainly arguable that
if a particular investor can derive an abnormal return consistently distinct
from what may be considered as being within a range of an average or normal
return in the market, 
then the investor is probably privy to certain information that enables them
to exploit arbitrage or speculative opportunities.  Indeed the situation may
be worse and involve, for example, favouritism, collusion, cronyism, bribery
or other biased 
distribution mechanisms.  Abnormal opportunities such as these represent
inefficiency and unfairness in the economy if such loopholes are readily
available and allowed to persist.  A truly efficient economy would
continuously marginalise and virtually 
eliminate the opportunity to make such abnormal gains or profits.  This also
includes the ability to amass unprecedented or abnormal levels of wealth.

Minimizing the gap - a sign of an efficient and rational economy

An efficient economy would, instead, minimize the gap between the minimum
requirements needed generally by all people and the maximum amenities required
by particular persons or groups so that they are capable of rendering more
service and useful outputs 
for the benefit of society. For instance, ordinary people may be provided with
motorcycles instead of bicycles.  Here, there is some difference between a
motorcycle and a car, but the gap that existed between a car and a bicycle has
been partially 
reduced.  In an economy that is efficient in what it distributes (ie
marginalises and seeks to eliminate the ability to make abnormal gains in
wealth accumulation), or in another sense is a rational distributor, the
economic gap between ordinary people 
and meritorious people is constantly reduced as much as possible, but the gap
will never vanish altogether. That is, the difference between the minimum
requirements of all and the maximum or special amenities of the meritorious is
never entirely 
eliminated.

Even though the gap exists, there must nevertheless be efforts to continuously
reduce the gap.  An important reason for that is because if the gap increases
disproportionally there is every likelihood of economic loopholes again
arising to abnormally 
skew the distribution of wealth to irrational proportions.  This affects the
economic welfare of all members of society and the common people, such that
the value of their labour and participation in the economy is not properly
recognised, thereby giving 
scope for a large segment of society to become deprived - and exploitation
will again re-emerge in society in the guise of special amenities to which
no-one else is entitled to. Accordingly, the provision of special or maximum
amenities should not go 
against the common interest. This is the relationship between minimum
requirements and maximum amenities.

It also, however, means the ordinary public will not and should not be
deprived of maximum amenities - efforts must be there to give them as much of
the maximum amenities as possible and available to society at the time, but
without destroying the 
incentive of the more meritorious to produce better outputs and contributions
for society in all spheres of endeavour.  A close analysis reveals that such a
system of production is based on consumption for the benefit of all members of
society, rather 
than profit being the underlying motive in the field of production. 
Naturally, with the marginalisation of profits and the elimination of the
ability to make excess or abnormal profits, eg with the continual lessening of
opportunities to make 
speculative gains, the economy is then in a better position to truly serve
consumption needs rather than profiteering objectives.

Rational distribution of rational profits

Profits, must of course be made, but these have to be rational or normal
profits.  What should be eliminated in an economy that rationally distributes
resources and makes maximum utilization of resources is the ability to make
abnormal or irrational 
profits.  There is no scope for speculative gains in a people's economy.


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