DP13342 The Half Life of Economic Injustice

Author(s): David Miles
Publication Date: November 2018
Date Revised: January 2019
Keyword(s): Distributive justice, Human Capital, income distribution, Solow growth model
JEL(s): O15, P14, P26, P48
Programme Areas: Financial Economics, Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13342

How much of today's income (GDP) is a result of unjust economic transactions? How much is a legacy of past acquisition of wealth (capital) which was itself unjust? To answer that question requires two things: first, a principle to determine what is, and what is not, a just acquisition of wealth or a just source of income; second, a means of using that principle to estimate what fraction of wealth and income is unjust. I use a principle put forward by Robert Nozick to provide the first of these things and then use some calculations based on standard neoclassical models of economic growth to illustrate its implications for the scale of unfairness today.