Saturday, April 25, 2020

Ricardo, Marx and interpersonal inequality — Branko Milanovic

It is a question often asked: what do Ricardo and Marx have to say about interpersonal inequality of income? The answer is, strictly speaking, very little. In writings of neither Ricardo nor Marx does inequality in personal incomes feature at all, and I even think that the concept of what we call “interpersonal inequality” or “size distribution of incomes” does not appear.
The reason why this is the case is both simple and revealing. Ricardo and Marx were concerned with functional (between factors of production) distribution of income, that is with the distribution of net product between workers, capitalists and landlords (the three big classes introduced by Adam Smith). In Ricardo, this concern was such that he wrote on page 1 of The Principles, the famous sentence that the principal problem of political economy is to study the distribution between “proprietors of land, the owners…of capital and the labourers”. Actually, the entire book is organized around that idea. Marx likewise (with a few exceptions) dealt with functional distribution only....
Global Inequality
Ricardo, Marx and interpersonal inequality
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Stone Center on Socio-economic Inequality, senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace

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