The Rising Inequality Challenge Along with the Polarization

by Shamsul
Rising Inequality Challenge
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The Rising Inequality, Along with the Polarization

Rising inequality alongside polarization has become a defining issue of our times. As economic gaps widen, so too do social and political divisions. This dual trend amplifies disparities in wealth, access to opportunities, and even basic rights. It underscores the urgent need for inclusive policies and social cohesion efforts to address these challenges effectively.

Explain Theory X and Theory Y

From the perspective of both supervisor and worker behavior

Theory X presents a traditional view of management, which resembles the autocratic leadership style. The theory assumes that employees are lazy, unwilling to take responsibility, lacking ambition, and prefer to be supervised. The managerial implication of this theory is to attain organizational objectives by implementing a coercive and controlling management system. Conversely, theory Y believes people are happy to work and motivated to pursue goals. Moreover, people are ready for responsibilities and have a creative problem-solving approach. Managerial implications for this theory are to attain organizational objectives through different rewards. The challenge for this theory is to develop an environment where employees can develop their creativity.

What is a Professional Bureaucracy?

Compare and contrast a machine bureaucracy and a divisional structure

Professional bureaucracy refers to the fact that firms can be bureaucratic without being centralized. The operating work of such organizations is stable, which results in predictable, standardized behavior. It is a complex process that is controlled by its operators.

Machine Bureaucracy

A highly bureaucratic organization is like a machine. Governmental agencies and other types of set-in-their-ways larger corporations symbolize this style. The strengths of this form are longevity, consistency, and structure; however, the downside includes limited openness to a newer perspective and inefficiencies that result from bureaucratic processes, which are very common.

Divisional Structure

This is very common amongst larger corporations that handle various product lines and multiple units of business. In some instances, corporations might divide their products or businesses within divisions to promote specific management of every division. This format refers to implementing centralized control, where the divisional presidents tend to oversee all work facets within their respective divisions.

How Do Feedback Systems Work in Management Theories?

Describe relevant theories and give concrete examples

The concept of an organization as a system has introduced the importance of feedback. Businesses and organizations are greatly dependent upon their environment for inputs and the acceptance of the output. As a result, companies need to develop means to adjust according to environmental demands. To put this simply, feedback systems collect information that reflects the activity or a series of activities undertaken by the company.

When applied to managerial aspects, the systems theory can be related to Total Quality Management (TQM). In this theory, the systemic conception of the firm strengthens by emphasizing the importance of relationships as being a part of the goal that needs to be attained. The feedback system theory can also be applied to the goal-setting theory of management, where feedback plays a very important role as this element provides information through which the organization progresses toward goal attainment. Organizations and individuals can set goals based on the feedback they receive. For example, if a company has launched a product that is initially considered to have high demand; however, through the feedback system, the company comes to know that the market for the new product is moderate, it can immediately change several aspects like the budget allocated for the production process or work upon marketing activities.

Applying Coase and Benkler

What are three ways of structuring business transactions? Be thorough in your explanations.

The three ways of business transaction structuring involve:

  • fiscal
  • legal
  • financial evaluation

Yochai Benkler developed the transaction cost approach, which refers to the cost of delivering a product or service from the market instead of providing it from within the company. However, Ronald Coase’s theorem states that markets are always competitive where there is no transaction cost, along with an efficient set of outputs and inputs, which will result in the making of an optimal decision.

How do behavioral economics and classical economics differ? What are the implications of those differences in terms of real-life impact?

Behavioral and classical economics are two distinct, opposite realms within economic modeling. Understanding the difference between the two allows for interpreting its implications in real-life impact. On one side, behavioral economics deals with the inconsistency between what is desired and what is the outcome. For example, if a person is willing to lose weight but is never able to get it done. Additionally, this modeling states that man has irrational behavior. This is related to classical economics, which states that individuals are rational beings. However, behavioral economics assumes that the opposite of this is true.

Within classical economics, consumption and production can be determined through cost and benefit at the margin. Both the producer and the consumer believe they make rational decisions. The buying power of the consumers is fostered by gaining the most benefit from every dollar spent, whereas producers tend to work towards attaining the highest possible profit.

What are the Fundamental Differences

in values between economic conservatives and economic liberals?

Economic liberals support the rule of law (contract), property rights, free trade, equity injustice, and capitalism. They believe that every individual is provided with equal opportunity for economic success and must not be deprived of the unjust rewards associated with his labor. It refers to the freedom of an individual in the economy to carry on with activities with minimal interference from the government.

Economic conservatives, on the other hand, view social stability and order as integral components of economic success. Conservatives of one generation most often defend the conservatives of the previous generation because of the perceived threat that change might bring.

Explain Externalities and the Tragedy of the Commons

Economic efficiency involves people making decisions on the basis of accurate prices – receiving full benefits for things produced and paying the total cost of the resources consumed. Positive and Negative externalities are situations in which accurate prices are not present. Operating in a world where there are no patents might lead to numerous positive externalities. For example, a company has worked on a remedy for migraine headaches for almost a decade, and when it is successful, someone else copies it and sells it without paying any royalty. This will affect economic efficiency as fewer people will attempt to do research.

An example of a negative externality is the Tragedy of the Commons. Cows are bought and sent to the commons for grazing until the time arrives for slaughtering. The price of the cow is determined by its weight at the time of sale, and the weight depends upon the amount of grass eaten. The amount of grass the cow has eaten depends upon the total number of other cows that were also grazing with the commons.

When a farmer adds a cow to the commons, that added cow, by eating grass, imposes a cost on farmers overall as their cows will now not gain as much weight as they would have before adding the new cow. However, this is an external cost, and the farmer adding the cow does not have to pay. As such, this cost is not considered in deciding whether a cow should be bought and grazed with the commons.

Broad CSR:

Broad CSR argues that universal core ethical values should shape business decisions; neoliberalism holds that only profit maximization should. Which view can better deal with externalities like pollution, and why?

CSR has more potential to deal with ethical core values related to externalities like pollution. CSR is the organization’s legal and moral responsibility towards the environment and community through contributing to education and social programs, working on pollution and water reduction processes, and earning adequate returns over resources employed. The CSR is effective towards pollution because it holds the concept of conducting business activities under strict compliance with the law while still making profits and voluntarily considering the impact of their operations on the environment within their business decisions. This approach effectively improves the quality of life and implements sustainable development.

What Factor Best Accounts for the Rise in Inequality:

Technological innovation, ideology, or another factor? Explain in detail and give your reasoning why.

The rising inequality and polarization of societies pose serious risks to the economy. Technology creates financial inclusion in countries without financial infrastructure, and global markets generate trading opportunities. Intelligent automation strikes middle-income groups. Only in the banking sector are many jobs at risk of being decimated because of the utilization of artificial intelligence for performing tasks that were previously considered very complex for automation. Additionally, with advancements within biohacking and gene editing, there is a threat to human augmentation and longevity, which also results in a newer segment of individuals where the elite class emerges from both mental as well as physical up-gradation.

Richard Thaler discusses “humans” and “econs” as having different decision-making methods. Are humans and econs two different types of people, or are we humans, sometimes econs? Give supporting evidence for your answer.

Economics Versus Humans

The notion of economics versus humans is straightforward to understand in decision-making. Humans are only sometimes logical as they can react automatically, have intuitions as well as emotions for making decisions, and can also make errors from a rational viewpoint. Econs, on the other side, have logical and rational behavior. They usually have the will and make mental efforts to make decisions. In short, humans are different from econs. Humans are emotional, imperfect, and full of bias, whereas econs are perfect, objective, and calculated. Evidence of this statement is that if a person is willing to lose weight and has the information about the number of calories required to attain this goal and those available in different foods.

In such a situation, he will only go for a food product that has minimal calories. However, after pursuing the weight loss ambition, the person views an advertisement for ice cream with an attractive price and states that an individual should have 2000 calories daily to function effectively. This appealing deal leads the person to fall into temptation, which eventually results in falling out from the bandwagon of weight loss, representing a lack of self-control, which is an evident characteristic of a human.


Neoliberalism is based on two principles: market fundamentalism, which is the vision that markets are efficient and sufficient for sustained growth and full employment, and the cascade effect economy, which is the vision that growth inevitably benefits everyone, including the poor and the best way to help the poor is to maximize growth.

Neither economic theory nor the evidence supports any of these propositions. Periodic crises and massive unemployment have plagued the market economy; without government intervention, companies have polluted our air and waters; unregulated or poorly regulated banking has caused problems in country after country. Recent scandals in the United States involving Enron, Arthur Andersen, and almost every central bank have shown trouble even in one of the best-performing market economies.

I agree with neoliberals that markets are at the heart of all successful economies, but markets and governments need to work in partnership. A balance is necessary, “a third way”, between the extremes of excessive government intervention and the kind of `minimalist government that neoliberals advocate.

United States Government

In the fastest-growing countries, governments have played a central role. Even today in the United States the government continues to play an important role, such as in promoting technology (the Internet was an invention of the United States government and the first telegraph line was also financed by the United States government more than 150 years ago. years) in providing education, even in giving financing (up to a quarter of all loans come from either government-sponsored companies or government guarantees), in ensuring income and health for older people. My research on markets with asymmetric information (different people know different things) showed that Adam Smith’s invisible hand was invisible – according to which markets lead to efficiency – because it simply did not exist.

In the same way, there have been long periods in history when people with low incomes have become poorer as economies grow. Neoliberal policies have focused on macro-stability, privatization, and liberalization. Certain aspects of these policies make sense when done the right way, but neoliberals often lose a sense of perspective, ignore critical issues of time and sequence, and confuse means with ends.

Macro stability has been misinterpreted as an exclusive focus on inflation rather than growth-oriented stability. The government should focus its attention on those activities in which the private sector cannot engage; thus, it makes sense to privatize steel companies and other industries that the private sector can serve well.


But when there are efficient government enterprises, such as the Korean steel mills or the Chilean copper mines, privatization may actually do little and may deprive the government of severely needed revenue, especially if privatization is done poorly, which is a frequent case. Privatizing monopolies without proper regulation has proven problematic around the world.

Similarly, some aspects of liberalization make sense, such as removing some regulations. However, deregulating banking and liberalizing capital markets, especially if done excessively fast, has led to crises country after country and has been one of the most significant sources of global instability. Some of the problems in America today are the result of deregulation.

Economic Inequality in America

Economic inequality in the United States started in the early years of the 1970s decade, incurred after several years of economic stability. The country exhibited higher rates of inequality than most developed countries, arguably because of its less regulated markets.

The income division in the US has not always been as vast as it is today. In response to the staggering economic inequality in the early 1990s, progressive policymakers and various social movements successfully fought to reduce taxation levels and level the bottom through increased unionization and other reforms.

According to Census Bureau figures, the gap between rich and poor grew in the United States last year to its highest level in more than 50 years of inequality records.

Income Inequality in the United States

Income inequality in the United States grew between 2017 and 2018, driven by significant increases in several states in the heart of the United States. Still, the inequality rate remained higher in some wealthy coastal states. This inequality can be associated with the structural theory, which states that an individual’s problem is not only his problem. If a person cannot access a healthcare facility for his child, it is considered a family issue and impacts society. If the child fails to get good care, it means that future generations will be neglected, which can harm society. Additionally, a parent needs to be at home every time to look after the child, resulting in withdrawing from the workforce, which can also mean the economy loses a skilled worker.

An increased level of inequality within a country is closely associated with the distribution of income and wealth within a nation, which can lead to poor outcomes in education, health, and happiness. The link between inequality and environmental impact is identified on a global level. According to the World Bank (2010), people living in countries with poor economies are more exposed to disasters such as floods, drought, and heat waves. Conversely, high-income economies have proper planning and better infrastructures to deal with environmental disasters.

Addressing Inequality

Addressing inequality requires rethinking the problem. First, tax escalation is fundamental to effective tax policy, including fiscal policies and progressive taxation. Our research shows that in the upper segment of the income distribution, it is possible to raise marginal tax rates without sacrificing economic growth.

The use of digital tools in tax collection can also be part of a comprehensive strategy to stimulate internal revenue. Reducing corruption can improve collection and also strengthen confidence in the government. Most importantly, these strategies allow the generation of the necessary resources to make investments that multiply the opportunities for the communities and people lagging.

Budgeting with a gender perspective is another valuable fiscal tool in the fight against inequality. Many countries recognize the need to improve gender equality and empower women, but governments can use gender budgeting to structure spending and taxation in ways that further drive gender equality; in turn, the increase in female participation in the labor force strengthens growth and stability.

Second, social spending policies are increasingly important in combating inequality. When well designed, they can be instrumental in mitigating income inequality and its adverse effects on inequality of opportunity and social cohesion.

Education, for example, prepares young people to be productive citizens who contribute to society as adults. Health care saves lives and can improve the quality of life. Pension programs can help preserve people’s dignity in old age.

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