THE CONSEQUENCES OF A POLITICAL DETERMINATION OF THE INCOMES OF THE DIFFERENT GROUPS
Political choices about how incomes are set can have harmful effects on society. Organized groups of producers often work against the overall need for everyone to adapt to changes in the economy. These groups might resist new competitors or shifts in demand, which are necessary for the economy to adjust and grow. This resistance can create a situation where the market becomes rigid and unable to change.
Some countries have responded to these problems by trying to implement ‘incomes policies’ to control wages and incomes through political means instead of letting the market decide. However, these policies often do not succeed because they fail to solve issues like inflation and market flexibility, and they can even make things worse over time. When political authority tries to set fair prices and wages, it can lead to perceptions of unfairness since no one can really know what is just and right.
In Britain, for instance, a rigid wage system led to serious economic difficulties, which became known as the ‘English disease.’ Moreover, it is essential to understand that the real sources of exploitation in society are not just individual business owners but also powerful organizations that gain strength from people acting together. These groups can distort the marketplace and create real injustices. Therefore, it is important to create fair rules for these organizations to protect individuals and create a fairer society.
Political choices about how incomes are set can have harmful effects on society. Organized groups of producers often work against the overall need for everyone to adapt to changes in the economy. These groups might resist new competitors or shifts in demand, which are necessary for the economy to adjust and grow. This resistance can create a situation where the market becomes rigid and unable to change.
Some countries have responded to these problems by trying to implement ‘incomes policies’ to control wages and incomes through political means instead of letting the market decide. However, these policies often do not succeed because they fail to solve issues like inflation and market flexibility, and they can even make things worse over time. When political authority tries to set fair prices and wages, it can lead to perceptions of unfairness since no one can really know what is just and right.
In Britain, for instance, a rigid wage system led to serious economic difficulties, which became known as the ‘English disease.’ Moreover, it is essential to understand that the real sources of exploitation in society are not just individual business owners but also powerful organizations that gain strength from people acting together. These groups can distort the marketplace and create real injustices. Therefore, it is important to create fair rules for these organizations to protect individuals and create a fairer society.