The political economy of justice

The fact that the only political response is to compensate those who bear the brunt of this failure is, in my view, an abdication of political responsibility, writes Rathin Roy

The second theorem of welfare economics posits that any desired income distribution can be achieved when an economy is at full potential by taxing those who earn more than society wishes and transferring these to those who earn less. I have previously argued that universal basic income proposals essentially genuflect to this theorem.^[i] In this column, I address the political economy underlying the transfers recently proposed by the national political parties.

The political economy argument for transfers rests on the case for justice. John Rawls^[ii] distinguishes between “justice as fairness” and “distributive justice”. The first requires that economic arrangements are