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The Equity-Efficiency Tradeoff under Capitalism and Market Socialism

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  • James A. Yunker

    (Western Illinois University)

Abstract

This paper utilizes a simple general equilibrium tax policy model and empirical data on labor income and capital wealth distribution in the United States to examine the equity-efficiency tradeoff under capitalism and a specific variant of market socialism designated "pragmatic market socialism." Under this variant of market socialism, property return produced by a publicly owned, but commercially oriented, business enterprise sector would be distributed on the basis of labor income rather than financial capital ownership. Under arguably reasonable assumptions, the pragmatic market socialist economy would display both higher output and greater consumption equality than the equivalent capitalist economy.

Suggested Citation

  • James A. Yunker, 1991. "The Equity-Efficiency Tradeoff under Capitalism and Market Socialism," Eastern Economic Journal, Eastern Economic Association, vol. 17(1), pages 31-44, Jan-Mar.
    • Handle: RePEc:eej:eeconj:v:17:y:1991:i:1:p:31-44
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume17/V17N1P31_44.pdf
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    References listed on IDEAS

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    1. Vaughn, Karen I, 1980. "Economic Calculation under Socialism: The Austrian Contribution," Economic Inquiry, Western Economic Association International, vol. 18(4), pages 535-554, October.
    2. Zimbalist, Andrew & Sherman, Howard J., 1984. "Comparing Economic Systems," Elsevier Monographs, Elsevier, edition 1, number 9780127810508.
    3. Abram Bergson, 1967. "Market Socialism Revisited," Journal of Political Economy, University of Chicago Press, vol. 75, pages 655-655.
    4. N/A, 1985. "General Policy," India Quarterly: A Journal of International Affairs, , vol. 41(1), pages 74-79, January.
    5. Dwight Israelseni, L., 1980. "Collectives, communes, and incentives," Journal of Comparative Economics, Elsevier, vol. 4(2), pages 99-124, June.
    6. Danziger, Sheldon & Haveman, Robert & Plotnick, Robert, 1981. "How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 975-1028, September.
    7. Browning, Edgar K & Johnson, William R, 1984. "The Trade-Off between Equality and Efficiency," Journal of Political Economy, University of Chicago Press, vol. 92(2), pages 175-203, April.
    8. Peter Murrell, 1983. "Did the theory of market socialism answer the challenge of Ludwig von Mises? A reinterpretation of the socialist controversy," History of Political Economy, Duke University Press, vol. 15(1), pages 92-105, Spring.
    9. N/A, 1985. "General Policy," India Quarterly: A Journal of International Affairs, , vol. 41(1), pages 112-117, January.
    10. Ballard, Charles L & Shoven, John B & Whalley, John, 1985. "General Equilibrium Computations of the Marginal Welfare Costs of Taxes in the United States," American Economic Review, American Economic Association, vol. 75(1), pages 128-138, March.
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    Cited by:

    1. Yunker James A., 2013. "The Basic Income Guarantee: A General Equilibrium Evaluation," Basic Income Studies, De Gruyter, vol. 8(2), pages 1-31, December.

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    More about this item

    Keywords

    Capitalism; Socialism;

    JEL classification:

    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • P17 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Performance and Prospects
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

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