Short Essay on Economic Equality

The twentieth century has witnessed a sharpening of concern for the economic aspect of equality and the means of securing it, either within the framework of the liberal system or by establishing a socialist society. Rapid industrialisation brought about an increasing awareness that equality of opportunity cannot be achieved by the equality of law which forbids the rich and the poor alike to steal bread or to sleep under the bridges.

Equality of opportunity does not only pre-suppose the equal allotment of certain rights, but also requires application of another rule of distribution: equality of the satisfaction of certain basic needs. It means privileges for the economically underprivileged. As Tawney wrote, ‘Equality of opportunity is not simply a matter of legal equality. Its evidence depends not merely on the absence of disabilities, but the presence of abilities. It obtains in so far as, and only in so far as, each member of the community, whatever his birth or occupation or social position, possess in fact and not merely in form equal chances of using to the full his natural endowments of physique of character and of intelligence’.

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Early liberals meant by economic equality an equality of choosing one’s trade or profession irrespective of his caste, creed or economic status. It was also understood as freedom of contract or that everybody is equal in so far as the contractual obligations are concerned. Many a time, it was also understood as equalisation of wealth and income.


However, all these measures were considered insufficient. Explaining economic equality, Rousseau wrote, ‘By equality we should understand that not the degree of power and riches be absolutely identical for everybody, but that no citizen be wealthy enough to buy another and none poor enough to be forced to sell himself. Economic equality is concerned with the apportionment of goods. To bring the poor to the general starting line, law must compensate them for those initial disadvantages by means of social legislation and social services such as minimum wages, tax exemption, unemployment benefits, free public schooling, scholarship etc.

According to Laski, economic equality is largely a problem of proportion. It means that the things without which life is meaningless must be accessible to all without distinction in degree or kind. All men must eat and drink or obtain shelter. Equality involves, up to the margin of sufficiency, identity of response for primary needs. The equal satisfaction of basic needs as a precondition for equality of opportunity does require economic equality i.e. reduction of extreme inequalities in the distribution of commodities.

Economic equality is two fold: i) it is a matter of status and ii) it is a matter of property and income. The matter of status raises the issue whether the state should seek to turn industrial production into something like a ‘partnership of equals’ and should introduce a system under which the directing and managing elements stand on an equal footing. With regard to property and income the issue is what methods the state should seek to correct inequality in their distribution.

The liberal state through its policy of mixed economy, methods of differential taxation, regulation and raising the wages by methods of social expenditure and other welfare services has been making corrections in the wide disparities of wealth. The state taxes the rich to provide welfare to the poor. While liberal sociologists like Dahrendorf, Raymond Aron, Lipset feel that through the extension of welfare services to all strata of society and redistribution of income and wealth through progressive taxation, the state has been able to lessen economic disparity and assure satisfaction of basic needs of all. Galbraith has gone to the extent of declaring that economic inequality has ceased to be an issue in men’s mind in Western democracies.


However, the liberal socialists feel that inspite of the fact that state action has resulted in greater diffusion of property, the permanent ownership of capital resources and the disparity between rich and poor continues and is still greater. State action ‘only touches the fringe of the problem of finding a general system of its more equitable distribution’. The state is yet to grapple with the problem of finding a general system of profit sharing.

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