Reference no: EM132526587

This week has covered various perspectives, orthodox and heterodox, on who gets paid how much and why. Recognizing that income inequality is a fact of modern capitalist economies (as well as any other type of economy), discussions on the topic often focus on whether or not that inequality is morally objectionable; however, in economics we're concerned first and foremost with understanding the causes of that inequality. As you've learned in this module, neoclassical theory tends to relate a person's income to her contribution--her 'productivity'--with the assumption that a profit maximizing firm wouldn't pay someone more than what they contributed to the bottom line. Heterodox economists, on the other hand, often take a more holistic approach, understanding incomes as the result of different classes conflicting and cooperating in various ways that determines the distribution of what the economy produces.

In this week's discussion, use one (or both) of these perspectives to explain a particular topic or example of your choice concerning the distribution of income. How does that perspective help us understand the underlying causes of 'who gets paid how much and why'? What are the limitations of that perspective in addressing the issue generally?