Values
neer the “desired” society, but that brought about the “Great Recession” and fueled the sense of injustice in the first place. If the main argument against wealth is that it is earned on the back of ordinary people, meaning at their expense, it can only be done in several ways – by force, that is by plundering and violation of the law; by rules that favor some at the expense of others; through monetary policy which channels cash flows in one direction and takes away a bit (or sometimes a lot) of everybody’s money (by depreciating their value along the way); and through fiscal policy that redistributes taxpayers’ money in someone’s favor. The rich earn at the expense of the poor when there is no rule of law, or when there is a form of crony capitalism. Free markets do not allow this to happen.
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the very process of their formation. If that is true, the perception of unfairness cannot be countered with redistribution, as it has nothing to do with the process of creating. The welfare state is no answer to the widespread perception of injustice. An indepth discussion of unfairness is in reality a critique of modern-day crony capitalism. The article is based upon several public discussions, among them one held at the University of National and World Economy in Sofia on March 19, 2014 and organized by the Institute for Market Economics and the Friedrich Naumann Foundation. The text, however, reflects the views of the author and should not be considered a summary of these discussions. ∞
CONCLUSIONS The modern debate on inequality is, in practice, a discussion about the morality of capitalism. To simplify this debate by presenting two opposing worlds – a capitalist society where skills and effort lead to inequality, and a socialist society where the state can secure equality, may be a good learning experience, but leaves aside the challenges that we face in the modern world. Such a framework is inadequate to tackle the unfair inequality that we face in present-day capitalist society where the state plays a huge role – usually called the welfare state. In this article we try to show that if we investigate in depth the modern-world inequalities and the widespread notion of unfairness, we can dig down to the foundations of unfairness that seems to be at the heart of the issue. The anger roaming throughout the modern world is not rooted in the material differences (if that was so, the sole idea of capitalism would have never been put into practice), but in
PETAR GANEV A Senior Economist at the Institute for Market Economics (IME) in Sofia, Bulgaria, since 2007. His research interests focus on economic growth and the business cycle, fiscal policy and the role of government, free markets and inequality. He is also a board member of the Bulgarian Macroeconomic Association and an author of numerous articles in Bulgarian media. He is also responsible for the educational initiatives of IME.