Question

How would you like a distribution to be, equitable, or efficient? Why? Is there any way for a distribution to have both these two features? Explain.

Answer 1

Distribution system should be efficient in nature, because it distributes resources, income and wealth on the basis of what people do, own responsibilities, take risks among the others. On this basis, distribution system not only helps people get what they deserve, but also it makes encouragement to the private property rights. It also encourages principle of invisible hand that creates opportunities for the others when distribution system is efficient. In theory, when everyone will have the same capabilities, same level of resources and take same risk, then it is possible for equitable and efficient distribution. Though, in real world scenario, it is very difficult to achieve in the economy. So, each one can come at the cost of another one. So, higher degree of equitable Distribution can be achieved with loss of some degree of efficient distribution.