AM10 Govt

Chapter 9: Government, taxation and the (re)distribution of income: is a just society just too expensive? . . . . . . . . . . . . . . 196 Hill & Myatt Anti-Textbook

The main point of this chapter is to examine the role of the government in the re-distribution of income. The textbooks argue that there is tradeoff between equity and efficiency and promote the pursuit of efficiency together with implicit or explicit appeal to the idea of the trickle-down effect -- basically we should just try to get as much wealth as fast as we can, and not worry about who it is going to -- once we get the wealth, then everybody will automatically enjoy the benefits.

The anti-textbook argues that this message is fundamentally wrong. EQUITY is the PRIME economic problem, Efficiency is not as important, because it is only a means and not an end.

Sample Final Question: The Leaky Bucket Argument

1. Provide the META-REASON why textbooks want to argue that government interventions will lead to inefficiency.

2. Describe TWO theoretical arguments from textbooks which show that if government want to create equity, it will lead to loss of efficiency.

3. Explain TWO anti-text arguments which show that there is no tradeoff -- we can increase BOTH efficiency AND equity at the SAME time.

4. Evaluate, with reference to REAL WORLD observations the idea that there is an equity-efficiency tradeoff.