In today’s column I propose to take last week’s discussion concerning the impact of massive wage and salary spreads along with the prevalence of the phantom economy on Guyana’s inequality and poverty one step further, through engaging an important emerging global line of thought on these matters. As was observed in standard mainstream neo-liberal economic analysis growth does not normally generate income and wealth inequality. Why is this unlikely? The answer is that in capitalistic market econo-mies there are so-called built-in automatic stabilizers to prevent this from occurring. Indeed these stabilizers are considered to be intrinsic to the operation of all competitive markets.
Growing divergences or inequalities can result only if there are market imperfections. And if these occur there are trusted public policies for correcting such non-egalitarian forces, provided they are directed at securing an environment suitable to competitive market outcomes. In an environment of competitive markets for the productive factors, these will always earn the income
