Abstract

According to conventional wisdom, the causes of economic inequality under capitalism are different in kind from those operating in a socialist system. In socialist societies today the distribution of wealth and income is determined by political authority, whereas in capitalism it is thought to arise mainly from the choices of individuals freely transferring goods and services in the competitive market. Robert Nozick's account of the workings of a ‘free society’ expresses this view clearly:There is no central distribution, no person or group entitled to control all the resources, jointly deciding how they are to be doled out. What each person gets, he gets from others who give to him in exchange for something, or as a gift. In a free society, diverse persons control different resources, and new holdings arise out of the voluntary exchange and actions of persons … The total result is the product of many individual decisions which the different individuals involved are entitled to make.