4.2 - Inequality + Capitalism Flashcards
1
Q
What is the profit motive?
A
Commercial firms supposedly driven by profit motive when making investment, output + employment decisions
2
Q
How does the profit motive widen inequality?
A
Dividends flow to shareholders
Shares listed on stock exchange
Investors earn capital gains
3
Q
How can profit driven inequality be reduced?
A
Objectives - Social enterprise etc
Tax systems
Industry regulators protect welfare
Co-operative business structures
4
Q
How does a capitalist labour market influence inequality?
A
Few limits to the pay of top earners
Market forces value specific skills
Executives set their own remuneration
5
Q
How can labour market intervention reduce inequality?
A
Minimum wage legislation
Executive wage ceilings
Employee protection/Unions
