[afro-nets] Food for a faceless and cozy thought (2)

[Claudio Schuftan <claudio@hcmc.netnam.vn>]

Food for a faceless and cozy thought (2)
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From: George Kent 

On May 1, 2006, at 10:14 PM, Claudio wrote:
"The World Development Report 2006 (WB, 2006) makes a remarkable
statement. It says that economic inequality results from unfair power
structures and political influence and an absence of corrective measures
of market failures." This is remarkable not only because the World Bank
fails to propose remedies, but, more fundamentally, it is remarkable
because it fails to recognize the way in which free markets necessarily
and inescapably produce economic inequality. Permit me to quote from p.
19 of my book, Children in the International Political Economy:

"The ordinary, normal working of the market system creates wealth, but
it also leads to poverty, and thus to concentration and to steadily
widening gaps. The way in which the market system concentrates wealth
and power in the hands of some and impoverishes others is very
straightforward. The elementary transaction of the market system is the
bargain, the negotiated exchange. One's bargaining strength depends on
the quality of one's alternatives. Some people (or companies, or
nations) are stronger than others because they have better options.

Those who have greater bargaining strength tend to gain more out of each
transaction than those who have lesser bargaining strength. Thus, over
repeated transactions, stronger parties systematically enlarge their
advantages over weaker parties. Bargainers do not move to an equilibrium
at which the benefits are equally distributed, but instead move apart,
with the gap between them steadily widening. Asymmetrical exchange feeds
on itself, making the situation more and more asymmetrical."

No wonder it is the rich who are the strongest advocates of "free"
markets.

--
Claudio Schuftan
claudio@hcmc.netnam.vn