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Dr. Shahram Yazdani
Wealth Redistribution Policies
Shahid Beheshti University of Medical SciencesSchool of Medical Education
Strategic Policy Sessions: 05
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“It’s Your money, not the government’s”
Ronald Reagan
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“As long as there existed a business owning, class oppression would continue. Private property is illegal.
Karl Marx
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What is an Ideology?
Generally speaking, it is a value system through which we perceive, explain and accept the world.
According to the political theorist Robert Dahl, all individuals are ideologues in the sense that we all map out our own interpretations of what the world is and how it should be.
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The Major Components of Ideologies
The state of human nature The role of the individual in society The role of the state The sources and limits of political
authority The preferred economic and social order
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Ideologies: The Preferred Economic and Social Order
Ideologies have to deal with the fundamental question of who controls the wealth in society. Should wealth be equally shared, or should some individuals be allowed to possess more wealth than others?
For communists, private ownership is not allowed. They are committed to providing an equitable distribution of wealth
For capitalists, people need to compete with one another in order to have an incentive for material gain. Economic and social inequities are allowed to exist
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“The Economy”
How politics and economics interact, and how they balance conflicting values of freedom and equality
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Components of Political Economy Markets – interaction between supply and
demand that functions to allocate resources Freely allow individuals to buy, sell, and
trade what they produce for what they will consume
Sets values, or “prices” for these goods and services
Markets arise spontaneously, and are difficult for the state to control
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Components of Political Economy
Property – ownership of goods and services State can choose to play a role in protecting
property rights – the right to sell property freely, or to not have it taken away In LDCs, frequently property exists without
a fundamental protection of property rights, due to the state’s inability to monitor instances of fraud
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Components of Political Economy
Public Goods – goods provided and/or secured by the state Examples (universal): Roads, lighthouses,
the military Examples (in some cases)
Health care in Britain, Canada Oil in Nigeria and Saudi Arabia Most businesses in Cuba
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Components of Political Economy
Taxation Means to provide for public goods and social
expenditures Subject of political battles, determined
partially by ideology toward the role of the state
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Components of Political Economy
Social Expenditures Commonly called “The Welfare State” –
redistribution of wealth through government taxing some, and paying others
Typically provided to the elderly, the unemployed, the poor, and the disabled
Often a subject of political battle, due to the question of who benefits from expenditures
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Components of Political Economy Money, Inflation, and Unemployment
States create and manage the money supply through a central bank
Creation of too much money in effort to stimulate the economy and reduce unemployment can cause inflation
Slowing the growth of money to control inflation can slow economic growth and cause unemployment to rise
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Components of Political Economy
Regulation – rules or orders to set the boundaries of given procedures States can ban production or sale of goods,
set safety requirements, outlaw monopoly control, etc.
Trade – access to goods and services from foreign states States can allow open trade, or restrict it
through tariffs, quotas, and other non-tariff barriers
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Tax Rates as % of GDP (2008)
Sweden: 54.2 % Denmark: 48.8 % Finland: 46.9 % Belgium: 45.6 % France: 45.3 % Austria: 43.7 % Italy: 42 % Netherlands: 41.4 % Norway: 40.3 % Germany: 37.9 % United Kingdom: 37.4 %
Russia: 36.9 % Canada: 35.8 % Switzerland: 35.7 % New Zealand: 35.1 % Australia: 31.5 % Ireland: 31.1 % United States: 29.6 % Japan: 27.1 % China: 17% Mexico: 9.7% Iran: 7.3% Nigeria: 6.1%
Dr. S
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Gini Coefficient for the 6 Countries
Sweden – 23.1 Germany – 28.3 U.S. – 40.8 China – 44.7 United Kingdom – 36.0 Russia – 31.0 Mexico – 54.6 Iran – 43.0 Nigeria – 50.6
Dr. S
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Priori + Experience = Posteriori
Success is one percent inspiration and ninety-nine percent perspiration
Where I was born
Who are my parents Inspiration
PerspirationHow I was developed
What is my IQ
Who am I now
What have I now+ =
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Wealth Redistribution
Revenue Model Logarithmic (Regressive) Full Range Increasing (Proportional) Increasing (Proportional) with Threshold Exponential (Progressive)
Payback Model Full Range Flat Rate Flat Rate with Threshold Full Range Decreasing Decreasing with Threshold Inverse Exponential
Full-Range Flat Rate
Flat Rate with Threshold
Full-Range Decreasing
Decreasing with Threshold
Full RangeIncreasing
Increasing with Threshold
Exponential
InverseExponential
Income Redistributive Policies
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Thank You !
Any Question ?