Crisis оf distribution in the modern world: trends and consequences

Main causes of crisis of distribution in the modern world are considered in the article. While the COVID- 19 pandemic is spreading, the problem of distribution and related crises have become main issues that attract attention of both governments and the world community. Rising unemployment, gender disparities, income inequality and wealth are some of the side effects of the coronavirus pandemic. The crisis has exacerbated inequality on the all main dividing lines of society and pushed back achievements in reducing poverty all around the world. The pandemic and its aftermath have reminded us of the need to move to a society, which would be fairer and more sustainable one. The distribution crisis can lead to the collapse of many social subsystems. The systems, structures and organizations, which are able to change in a permanent way and effectively overcome conflicts, become the most successful. Distribution policy does not necessarily mean welfare programs for low-income groups or a broad distribution of public goods and finances. Redistributing manager’s power is also subject to redistribution policy. The idea of welfare state, its development and further all-encompassing crisis draw attention to the most important moments of human existence, such as distribution of goods and the right to access to resources both within a state and in the world as a whole. The states with a high welfare level enjoy widely available educational programs, largely funded by taxes. Thus, in order to ensure equal opportunities and achieve equal results, a coordination of professional training and an existing labor market is needed. A clear legal system is needed to address distribution challenges and distribution risks, especially in economic legislation and, first of all, in tax, financial and antitrust regulations, which solve distribution problems in practice. Thus, distribution crises must be effectively controlled and resolved by strengthening economic regulation.

Liberalism, the Only True Humanism

Liberalism is often criticized because it is said that it is concerned only by economic problems (and not more general human problems) and because it is in favor of selfishness. This is wrong and, in fact, liberalism is, on the contrary, the necessary consequence of a universal and valid conception of ethics. The foundation of liberalism consists in the fact that everyone must be respectful of the legitimate rights of any person (as regards, for instance, his body, his mind, and his legitimate property rights). Therefore, it implies that one ought to be respectful of another person either if this person is generous or if he is selfish (one is not obliged to be selfish, but one has the right to be selfish). Thus, liberalism is founded on the fundamental universal ethics and it is respectful of the individual conceptions of personal ethics. It is not in favor of selfishness, but in favor of individualism. This is why it must be said that liberalism is the only humanistic approach of social problems. However, many people consider that it is ethically justified to impose a redistribution policy to decrease so-called “social inequalities.” But, so doing, a state is not respectful of the legitimate property rights of those who are obliged by legal constraint to pay taxes. A voluntary distribution of resources from individuals who give part of their legitimate resources to other individuals is ethically justified. But it is not the case whenever this transfer of resources is made by using coercion. And it must be added that it has negative consequences. Those who benefit from the redistribution policy are less induced to make productive efforts. And those who have to pay the taxes are also less induced to develop their productive activities. Therefore, the production of resources is diminished by the redistribution policy and all the members of a society (for instance a country) suffer from this non-ethical policy.

A typology of emerging farmers in three rural provinces of South Africa: what are the implications for the land redistribution policy?

PurposeUnderstanding diversity amongst potential beneficiaries of land redistribution is of critical importance for both design and planning of successful land reform interventions. This study seeks to add to the existing literature on farming types, with specific emphasis on understanding diversity within a sub-group of commercially oriented or emerging smallholders.Design/methodology/approachUsing a multivariate statistical analysis – principal component and cluster analyses applied to a sample of 442 commercially-oriented smallholders – five distinct clusters of emerging farmers are identified, using variables related to farmers' characteristics, income and expenditure and farm production indicators and willingness to participate in land redistribution. The five clusters are discussed in light of a predefined selection criteria that is based on the current policies and scholarly thinking.FindingsThe results suggest that there are distinct differences in farming types, and each identified cluster of farmers requires tailored support for the effective implementation of land reform. The identified homogenous sub-groups of smallholders, allows us to understand which farmers could be a better target for a successful land redistribution policy.Originality/valueMost of the existing typology studies in South Africa tend to focus on general smallholders and in the Eastern Cape province; this study extends the literature by focussing on specific prime beneficiaries of land reform in three provinces. This study uses a more detailed dataset than the Statistics general and agricultural household surveys.

Redistribution and the Monetary-Fiscal Policy Mix

We show that the effectiveness of redistribution policy in stimulating the economy and improving welfare is directly tied to how much inflation it generates, which in turn hinges on monetary-fiscal adjustments that ultimately finance the transfers. We compare two distinct types of monetary-fiscal adjustments: In the monetary regime, the government eventually raises taxes to finance transfers, while in the fiscal regime, inflation rises, effectively imposing inflation taxes on public debt holders. We show analytically in a simple model how the fiscal regime generates larger and more persistent inflation than the monetary regime. In a quantitative application, we use a two-sector, two-agent New Keynesian model, situate the model economy in a COVID-19 recession, and quantify the effects of the transfer components of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. We find that the transfer multipliers are significantly larger under the fiscal regime—which results in a milder contraction—than under the monetary regime, primarily because inflationary pressures of this regime counteract the deflationary forces during the recession. Moreover, redistribution produces a Pareto improvement under the fiscal regime.

On «tax productivity» of Russian manufacturing industry

The government considers economy as a source for solving its problems, such as the production of public goods, the redistribution policy, etc. Since the mechanism for collecting these resources is taxation, a “tax productivity” may be of interest along with labor productivity expressed in the income or added value created. The possibility of calculating this indicator at the micro level (data of taxpayers) appeared with the Federal Tax Service of Russia publication of open data on tax paid, the average personnel headcount and other enterprise indicators. According to the open data available, calculations of indicators reflecting labor productivity (the ratio of income to the average headcount), the tax burden (the ratio of taxes paid to income) and tax productivity are presented in the article, with the sectoral distribution of median indicators (OKVED subsections) for the manufacturing industry in 2019. It is shown that each job in industry gives the government about 50-300 thousand rubles a year. Based on the results of the calculations, significant differences in productivity between industries and within them are confirmed. In general, Russian taxation system maintains horizontal equality of tax liabilities, except for activities subject to excise duties. For the data array of taxpaying enterprises, this relationship is weakening, i.e., enterprises with higher labor productivity may have higher or lower tax burdens. From the point of view of tax productivity, there is no reason to speak of an obvious, pronounced stimulating or restraining nature of the tax system, which ensures a decrease in the burden or, conversely, an increase in fees for efficient industrial enterprises.