Discussion Week 6
I agree with Adam Smith’s argument on the origin of economic inequality that individuals were “naturally motivated by self-interest.” I think Smith was right on this account in the context of market and self-interests. As a result, it would be a problem if economic inequality would reach high levels in the United States partly because of self-interest that makes people exert significant influence over lawmakers to shape public policy to violate others’ economic liberties. In general, economic inequality driven by self-interests violates the economic rights of other people.
When individuals’ economic rights are violated, there would be a significant gap between private rewards and social contributions. The private incentives would be excess and social returns would remain low, contributing to a bloated market and economic inequality. The country would start experiencing increased poverty levels, unemployment, and discrimination. These issues would disproportionately affect minority communities and low-income individuals in the United States. Increased unemployment rates would lead to dire consequences for both the unemployed demographics and the national economy. Specifically, widespread and lingering unemployment would contribute to adverse consequences on the national economy since it would be fiscally stunted. Unemployed individuals would experience psychological and emotional distress and destruction.
Also, violation of economic liberties by few influential lawmakers for their self-interest would be deceptive. It would be true mainly considering the fundamental nature of economic rights under the Universal Declaration of Human Rights, which protects people’s rights to a standard of living that is adequate for well-being and health. Resources would be unevenly distributed, creating an unequal society. According to Smith, when the market’s completion fails or is imperfect, private and social returns may not be well aligned. It is possible to solve economic inequality issues mainly by government intervention. The government can reasonably correct market failures through sound financial regulations and well-designed financial policies.