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Business Is One Reason For Economic Inequality – And Also For Equality

By Bill Conerly ~ Forbes ~

Is business a reason for economic inequality, or does business reduce economic inequality? I believe the answer is “Yes.”

Private business both increases and decreases inequality, in conjunction with changes in the structure of the economy, technology, social attitudes and public policy. Private business does not definitively determine the distribution of income, but it influences it.

(This article is based on my presentation in Moscow, Russia at a conference sponsored by Carnegie Moscow Center, September 19, 2018.)

I will preface my remarks with a caution about being too focused on inequality. I care much more about poverty. For example, income distribution is far less equal in my own country of the United States than in a country such as Cambodia. Yet the poor in America have much higher incomes than the average Cambodian.

Business practices affect inequality in three different ways, through corruption, scalability, and the search for undervalued resources. I close with a story about a for-profit business helping people who have lost their jobs.

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