Some Micro—Economic Reflections on Income and Wealth Inequalities

Abstract

Concern about inequality involves naive anthro pomorphism and the Judaic-Christian tradition. Both lead to anachronistic images of modern society and to concern with sharing its presumably effortlessly-acquired surplus. Ob served inequality in contemporary society is largely the by product of the success of that society in providing opportuni ties for self-fulfillment. As examples, consumption needs and income-earning capacity are poorly synchronized over time, implying cross-sectional inequalities between people at differ ent ages; people's consumption preferences also differ early and late in life. People differ in their preferences for either risky or safe occupations. The policy problem of inequality reform is to correct inequalities of opportunity without taxing socially useful exercises of choice and subsidizing socially undesirable ones. One of the major sources of difficulty is the role of the family in the transmission of material property, genetic char acteristics—good or bad—and attitudes towards work and life. Few, indeed, would be prepared to alter sufficiently the insti tution of the family to eliminate these family-transmitted sources of inequality.