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Abstract

"Inequality is what economics should be all about," argued the late R.H. Tawney. It isn't, because concern with the patterns of distribution of wealth and income is shared with production, upon which consumption is contingent. Concentration of wealth and unequal levels of income largely reflect the patterns of returns to labor and investment in a traditional capitalist economy. Additionally, income tromfers, rationalized on other than a labor or investment compensation basis, alter the patterns of income and wealth holdings. Pronounced economic inequality, while prevalent in capitalist economies, would not seem to result from the market mechanism. Broadly based ownership of the means of production, by workers and others, perhaps linked to co-determination schemes for direction of production policies, has evolved as a potential alternative to wealth concentrations of an extreme form as a source of investment capital. It should be cautioned that the feasibility of this investment source substitute for wealth formation has not yet been fully established.

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