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Globalization, Inequality, Say’s Law, and Fiscal Globalism

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  • Gerasimos T. Soldatos

    (Department of Economics, Westminster Tashkent, Tashkent 10047, Uzbekistan)

Abstract

This is a brief note maintaining that financial globalization has been faster than the integration of the remaining sectors of the world economy, thus encouraging wealth inequality, under-production, and under-consumption in line with Say’s Law. Financial investment has become more profitable than real investment, discouraging production ventures, and weakening labor’s relative income position and purchasing power. Moreover, this article works out a model of international government indirect tax competition as a policy means against increasing inequality. The mentality under which this tax policy paradigm is put forward is that the competition of nation states in a fiscal globalism fashion crystallizes the optimal level of centralization under globalism; optimal, that is, from the viewpoint of safeguarding against the manipulation of world markets by financiers.

Suggested Citation

  • Gerasimos T. Soldatos, 2017. "Globalization, Inequality, Say’s Law, and Fiscal Globalism," Challenges, MDPI, vol. 8(2), pages 1-9, July.
    • Handle: RePEc:gam:jchals:v:8:y:2017:i:2:p:17-:d:104207
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    References listed on IDEAS

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    1. Mariana Mazzucato & L. Randall Wray, 2015. "Financing the Capital Development of the Economy: A Keynes-Schumpeter-Minsky Synthesis," LEM Papers Series 2015/14, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Sheila Dow & Guðrún Johnsen & Alberto Montagnoli, 2015. "A critique of full reserve banking," Working Papers 2015008, The University of Sheffield, Department of Economics.
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