Economic Inequality, Human Rights, and Labour Markets

Abstract

The purpose of the article is to analyse relations between human rights and economic inequality. Further, the role played by markets in these relations is examined. The importance of choice of dimension in which to measure inequality, such as consumption or hourly wages, is outlined. It is argued that the important thing in a human rights context is inequality of opportunity, not inequality of outcome. An analysis of reasons for making inequality a social concern, and of reasons for accepting inequality under certain circumstances, is attempted. By means of this, a hierarchy of reasons for inequality is suggested, where inequality is considered least morally acceptable, if it is founded on discrimination, more morally acceptable if it is founded on differences in methods of acquisition, and most acceptable if it is founded on differences in effort and talents. Important effects of factor market interactions on such types of inequality are examined. It is suggested that market forces tend to reduce discrimination. Inequality due to differences in method of acquisition is likely to be enhanced by market forces, possibly beyond the point generally acceptable by moral standards. The same is possible concerning inequality due to differences in effort and talents. Further, it is indicated that market forces cannot prevent poverty and may enhance it. If market forces are unable to generate an acceptable distribution, redistribution will be called for. It is suggested in this article that in a democracy the extent of redistribution is likely to be determined by the preferences of the median voters.