Financing Social Justice in Egpyt
Watch this great interview with the Egyptian commentator on business and economics, Wael Gamal. As he points out, government-provided energy subsidies to crony-capitalists are essentially a policy to provide these businessmen with supra-competitive profits. Egypt could save a $1 billion a year simply by reducing this subsidy by 50%, not even 100%, and the global competitiveness of these firms would not be hurt, and we would reduce the power of the NDP crony capitalists, to boot! More generally, I would add that increasing the income of the poor is not the only way to increase their standard of living: so too, by providing them with higher quality services, e.g., education and health, you effectively increase their income by reducing their expenses. Future economic policy must, simultaneously, increase overall economic efficiency, including, by attracting increased investment, and introduce effective policies of redistribution whose aim is not simply increasing the real income of the relatively less well-off, but by increasing their productivity by giving them greater access to education, health care, sanitation, etc.