A Simple Fix for Economic Inequity
even though, as I understand it, such inequity is not of itself an injustice
According to my understanding of what justice is, differences in income/wealth are not of themselves an injustice, no matter how large they might be. They might imply injustice in how they are generated, but that is another issue.
Even so, I would not mind one bit living in a nation with less economic inequality. That could be achieved by adopting two rules:
- Any business is limited to investing in itself: its plant, equipment, and ‘human capital’ (the people employed in the business), i.e., wages/salaries and (‘in-kind’) benefits.
- The total remuneration of the employee in the business with the highest total compensation cannot exceed [some multiple of] the total remuneration of the employee with the lowest total compensation.
The first rule does nothing to hamper the growth, expansion, or improvement of the business. Both together ensure that, lacking any need for immediate investment in plant or equipment, the business will have nothing to do with its profits (after setting aside as much money as might be advisable) but to increase the compensation of its employees. The second rule ensures that for the total remuneration of the highest-paid employee to increase, the total compensation of the lowest paid must increase (as it happens, Rawls’s famous “difference principle” at work).