Question

Using the concept of opportunity cost present an argument in which you incorporate the ideas of Rawls, Titmuss, and Abramovitz into a well-thought out essay defending aid for the poor. What are the unintended consequences of not providing for the poor?

Hint: How will this enhance social capital and improve the lives of all people?

Answer 1

Rawls opined that there should be equal opportunity, basic rights and promotion of people who are least advantaged in a country. While Titmuss emphasized importance of universal welfare society and that altruism is of higher importance. Abramovitz also focused on redistributive social policy and that wealth through welfare should benefit everyone equally.

Thus all three emphasize aid for the poor and that it should be distributed equally. Now opportunity cost is the one which is foregone. Countries have often incurred a higher opportunity cost because the aid distributed through fiscal, social structures has not benefited everyone and infact affluent individuals have benefited the most. They have foregone the growth rate which they would have achieved had there been an egalitarian society, to the growth which they achieve by benefitting only the upper class. By imposing social cuts, the poverty gaps go on increasing which leads to higher unemployment and lower demand for products in an economy as less number of people are able to afford them because of poverty, this indirectly affects the growth rate, which turns out to be lower.

By focusing on policies put forth by these economists and policy makers, social welfare proves an important stepping stone in an economy and it enhances the strength of the population in terms of higher consumption power, spending, and productivity thereby improving social capital of that society, as an egalitarian society benefits everyone equally thereby redistributing wealth leading to higher economic growth rate.