Sunday, April 16, 2006

Free Markets in Japan, Finally!

In the Sunday edition of the NYT, there is a story on growing income gap in Japan amid the economy's continued revival after a decade-long slump. Of course, in the eyes of the NYT, income inequality is a big minus.

"Today, in a country whose view of itself was once captured in the slogan, "100 million, all-middle class society," catchphrases harshly sort people into "winners" and "losers," and describe Japan as a "society of widening disparities.""

What brings about income inequality in the first place?

Shouldn't people who are more productive (in the value-creating sense) get higher rewards than those who are less productive? Unless every one is equally productive, the "100 million, all-middle class society" implies that Japan's labor market is not doing its job.

In other words, growing income inequality in Japan means that markets are finally allowed to work properly in Japan. And what's wrong with that!

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