ABSTRACT
The purpose of my chapter is to demonstrate, with the help of heterodox economic theories, that unregulated markets endogenously produce levels of inequality that are unfair and pose a threat to the functioning of the economic system. Only proper institutions and comprehensive regulations can prevent a rise in inequality. Two areas are particularly relevant. The first is the asset market: the wealthier people become, the faster they can increase their wealth. The second is the labour market, which, if left unchecked, tends towards extremely high wage dispersion and a large low-wage sector. The higher the unemployment rate, the greater, in turn, the likelihood of high wage dispersion and inequality. Overall, an unregulated market economy is unstable and is accompanied by stagnation and high unemployment.
