Growth With Redistribution

I read a book on UN ideas recently and one idea that caught my eye is “growth with redistribution.” I think it is an appropriate idea in light of current instability and push towards a more sustainable growth. The book has it that if we are to continue with the current system of growth where everyone is pretty much doing things for themselves, no doubt the rich will continue to experience impressive growth in the size of their wealth, but the poor also has to reach a certain minimum level of growth in their wealth or earnings in order for them to be able to afford their basic needs.

This inter-connectedness between the rich and the poor can be explained by their demands for goods and services. The fact that much of the world now run on market economy means that prices of goods and service will adjust based on demands and supplies. The rich with their wealth will surely be willing to pay more for a certain good and if many of them do so, it will push the price of the good up if supply is limited. If the poor also demand the same good, then there would be a chance whereby the poor may not be able to obtain this good. And if the good turns out to be a basic necessity, then you have a situation whereby the poor cannot afford their basic needs.

Is this really true? Well, surely you have read about the increasing food and fuel prices lately. In some cases, governments indeed step in to subsidize these goods for the poor but is this sufficient? Perhaps not and with fiscal austerity in their minds, how long will this last?

The concept of “growth with redistribution” is about meeting basic needs for everyone. The rich with their resources can certainly grow more but with basic needs in mind, they perhaps do not need to grow their wealth at the current rate. The poor need to grow their wealth but with redistribution from the rich in mind, they perhaps do not need to slog so hard to the point that it affects their health. It is all about not overspending and using excesses for the benefits if those who are lacking.

It is a beautiful idea in an utopian society and certainly is worth trying in our society but in such a “real” society, is this another idea that is destined for the bookshelves?