Thursday, July 16, 2009

The bogey of "inequality"

Dear Friends,
 
I am amused and irritated whenever i read and hear about the cry
"...growing inquality of incomes" etc whenever people comment about
liberalisation, etc.
 
I am not an economist and not much aware of economic theory.
But shouldn't the net poverty ratio and absolute number of people
in poverty be the most important criterion when we discuss about
"growing inequality" ?
 
Suppose a nation has 100 % people below poverty line and
all living on one square meal a day ; and another nation has
10 % people below poverty line, 80 % middle class and
10 % in rich category. Statistically, the first nation has
most equality of income and what not, than the second
nation. So which is better ?
 
I suppose, theoritically, with relative statistics, it
is possible to prove that war torn and starving Rawanda or
Sudan has less 'income inequality' than, say Sweden.
 
there is similar talk about China and India. But both these
large nations are much much better when compared to
1980.
 
Relative statistics ?

---------------
a reply from my Professor :
 
Dear Athiyaman,

At this URL you would get technical reasons for what you had stated so
clearly and elegantly in understandable English on inequality.  You will
have to (free) download the article from the site.

S.Neelakantan.
 

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