ABSTRACT
As discussed in the previous chapter, competitive markets are a powerful force to elicit the maximum effort from individuals and harness their self-interested action to promote the growth of the national income of society as a whole. But from a distributional point of view, competition must not only be free; it must also be fair. With free competition alone, the incomes of individuals depend not only on their efforts but also on the resources they own and the opportunities they have for participating in the market economy. When these resources and opportunities are unequally distributed, it is as if a race was being run with different starting points for the participants. The distribution of income resulting from the operation of market forces alone may be modified to some extent in the short term by the policies discussed in the previous chapter for the regulation of the resulting prices and structure of production. But to make competition also fair, individuals must be enabled to start on a more equal footing.
