La répartition des richesse est une politique très importante pour le développement

Dear Dariusz,

It's probably me but I'm not getting your question. I would greatly appreciate if you could elaborate on what you are asking for. Are you asking for the typical Keynesian policies in case of a contraction?

Best,

I would say that the policies regarding the distribution of wealth to avoid the cyclical downturn of the economy, in the form of Social Security Programs (employment insurance, Sick Leave payments, healthcare, pensions, etc.) are the most effective tools to maintain the liquidity within the local and national markets. Having the evidence of the last big crisis, stimulus are effective buffers against social, economic and democratic degradation. Austerity on the other hand tends to enhance the societal gap.

David,

Respectfully, I'm going to disagree. That's like sweeping the problem under the rug. The room will look clean but it really isn't. Once all that dirt and dust comes out and with the additional new dirt and dust the room is going to be dirtier. The same is true with re-distributional schemes. You do not alleviate the problem of poverty by re-distributing incomes and wealth. All you do is to make everybody equally poor. It's the trade-off between the size of the pizza pie vs. how you divide up a given pie as equally as possible among guests.

Best,

--

M.D.

I thank you for your words. I see that there is a tendency of over-simplifying the the argument for redistribution by assuming that the goal is to achieve perfect equality. In truth, as idyllic as that might sound (or not), it is unattainable and unreachable due to our own human nature.

Instead, what distribution does, is to create the conditions necessary (in the case of a downturn) to avoid a full and deep crisis based on the lack of moving capital, and (whenever else) to foster a social net that allows for a more resilient society based on sound responsible practices. In the end redistribution, by means of taxation, is the base of a solid economy. We can ask our Scandinavian friends, or to my fellow Canadians. As a personal anecdote, when my economic situation did not allow, I used health care services without having to worry about a common dilema for some of our southern neighbours have: to eat or to get some medical attention. Now, that I am able, I am happy to pay high taxes knowing that I am not a medical bill away from bankruptcy. If this is a single empirical micro-economics example, then we can extrapolate the collective impact that individual experiences and situations can have on a national context.

The economic system we have right now is the best we have been able to come up with so far (taking in consideration past examples such as enslavement, feudalism, colonialism,etc.), but it is still an social experiment, and a far cry from perfect. Hopefully we can all get our heads together and try to figure out an economic model that is more social, environmental, cultural and economically more responsible that what are have.

Cheers,

David

P.S. Here is some further reading that I hope you find interesting:

On social rights and Democracy - Wiesner, C. 2016. Capitalism, Democracy, and the European Union. Zeitschrift Für Vergleichende Politikwissenschaft 10, no. 3 (December 1): 219–239.

On Rights and globalisation: Mishra, R. 1998. Beyond the Nation State: Social Policy in an Age of Globalization. Social Policy & Administration 32, no. 5 (December): 481–500.

On inequality and democcracy: Munck, G.L. 2016. What Is Democracy? A Reconceptualization of the Quality of Democracy. Democratization 23, no. 1 (January 2): 1–26.

On liberal democracy and capitalism: Thomas, G. 2017. Can Liberal Democracy Survive Capitalism? Critical Review 29, no. 4 (October 2): 530–544.

On healthcare costs: Moreno-Serra, R., and P.C. Smith. 2012. Does Progress towards Universal Health Coverage Improve Population Health? The Lancet 380, no. 9845 (September 8): 917–923.

On access to social services: Arranz, J.M., C. García Serrano, and V. Hernanz. 2009. El Sistema Español de Protección Por Desempleo: Eficacia, Equidad Y Perspectivas. Ed. Luis Toharia. Universidad de Alcalá.

Unfortunately, there is a fundamental difference in thinking. First of, given the current state of global affairs even the most capitalistic countries are nothing but only mixed economies with a smaller or larger 'welfare state' mechanisms. There is already quite a lot re-distribution in many of them. Second, in a serious downturn, either you call it distribution or I call it re-distribution, none of that will be enough because the more dramatic decline is always in investment spending and the international sector (i.e. Great Depression of 1930's, Great Recession of 2008 etc).

A survey by market data firm Market showed that the UK economy is currently contracting at the fastest pace since 2009, and this comes as the British vote for the EU exit in June 2016.

The company said its monthly Purchasing Managers' Index in July showed a sharp decline in corporate activity compared to its June level. The study indicated that the UK economy contracted by 0.4% in the three-month period to September, a rate not seen since the beginning of 2009 .

On the other hand, Reuters conducted a survey in August 2016 that economists believe that the probability of entering the UK in the case of economic contraction in 2016 up to 60% following the referendum exit (Brexit).

The British Financial Times earlier published views of a group of economists who warned that the UK economy would shrink if the UK came out of the EU.

In its July 6, 2016 edition, the newspaper reported a decline in the level of consumption and employment and a decline in real estate prices due to widespread uncertainty, lack of confidence and a lack of clear vision for individuals and companies in the future.

Source / https://www.aljazeera.net/encyclopedia/economy/2016/9/8

La répartition des richesse est une politique très importante pour le développement

thank you Doctor...

Certainly, provided that the distribution of wealth is fair on the one hand, and on the other hand the state should support the disadvantaged groups in particular.

..Which is certainly happening via public policies (as well as privately). I always liked the aphorism which reads; "A rising tide lifts all boats." Because, if the tide is not rising you can keep re-distributing incomes and wealth to oblivion. In the words of Arthur Laffer, "if you tax people who work, and you pay people who don't... don't be surprised if you find a lot of people not working." We'll ultimately need improvements in the overall economy, which will benefit all participants in that economy.

The objective of the Keynesian policy is full employment, Keynes asserted that free markets have no self-balancing mechanisms to lead it. Keynesian economists justify government intervention in the economy. However, instruments of socio economic policy are not mentioned in the Keynesian Theory.

Public spending is one of the instruments of economic policy, as long as it has an impact on full employment.

The great depression of the 1930s had a profound influence on both economic and political thinking. The consequences: broad consensus emerged on government role to drive economic growth through effective demand.

Dear Friends and Colleagues of RG

The issues of specific programs to improve the economic, financial, material and housing situation of households as key instruments of pro-development state intervention and significant components of the socio-economic policy of the state I described in the publications:

Article FAMILY 500 PLUS PROGRAMS AND FLAT PLUS WITH KEY INSTRUMENTS ...

Article Ability to Generate Financial Savings by Households in Poland

Article ECONOMIC AND FINANCIAL SITUATION OF HOUSEHOLDS IN POLAND – A...

I invite you to discussion and cooperation.

Best wishes

It´s important to point out that Keynes never mentioned instruments

of socio-economic policy. Its General Theory of Employment, Interest and Money in 1936, is about macroeconomic policy.

Social policy instruments or strategies are the same in developing and developed countries, of course, that drive demand, but their main objectives are very clear:

1) Support the poor population

2) Electoral issues

On the basis of the above considerations and conclusions from the discussion on interesting issues discussed, I formulated the following thesis that in the context of the need to revive economic processes, during periods of economic slowdown, in countries where the process of unfavorable demographic changes involving the aging of the population has been progressing for many years, the importance is growing and pressure to apply pro-development, Keynsian, counter-cyclical, national and regional socio-economic policy. In addition, especially in the period of economic downturn in the context of business cycle analysis, it is particularly important to apply pro-development, Keynsian, counter-cyclical, national and regional socio-economic policy.

I would like to add a few words to the above discussion on interesting issues related to the application of development-oriented, Keynsian, counter-cyclical, national and regional socio-economic policies. In the context of the above discussion, I am asking you:

- What kind of financial determinants, economic conditions determine the use of pro-development, Keynsian, counter-cyclical, national and regional socio-economic policy?

- What kind of pro-development, Keynsian, countercyclical, national and regional socio-economic policy instruments do you consider to be key?

- What kind of socio-economic policy is adequate for a possible slowdown in global economic growth in 2020?

What do you think about this topic?

What is your opinion on this topic?

Please reply

I invite you to discussion

The role of governments in the economy was limited since the late 1980´s.This policy is linked to "Washington Consensus" in general a greater role for markets in allocating resources. However is known social programs, they are not part of this scheme .

Dear Dariusz:

As you the term Keynesian has been used to indicate that aggregate demand drives economic growth, therefore anticyclical policy.

Dear Dariuz:

As I mentioned before If we make an analogy between social policy and welfare policy, the Keynesian theory is not the promoter. Arthur Cecil Pigou was a pioneer of welfare economics.

  It is important to point out to another specialist in Social Welfare issues Timothy John Besley postulates that: "The welfare economy provides the basis for judging the achievements of the market and of policy makers in the distribution or allocation of resources".

Best Regards