ABSTRACT

There are many ways to describe economizing, but several familiar processes can be identified: The first is a process of calculation and control for achieving a preferred distribution of claims on labor and other resources. Economizing, therefore, requires a process for determining whose goals shall have priority and to what extent. The second is a process of calculation and control for reconciling total claims with total resources to be claimed. Economizing begins with scarce resources and ends with goods, services, leisure, and other values in the hands of consumers. Generalizations on the relationship between inequality and political instability are consequently hazardous. Incentives, or rewards and penalties, pose an impossibly large subject. Fortunately, “the incentive problem” in income distribution pertains to a limited number of specific incentives. The transfer of income through social security and other welfare expenditures is not easily estimated, because much of this expenditure is supported by taxes on those who receive the payments and services.