John Stuart Mill Income Inequality

John Stuart Mill on Income Inequality
Introduction & Background on John Stuart Mill and His Economic Theory:
John Stuart Mill (1806-1873); from a young age was one of the most notorious and influential utilitarians of the nineteenth century and was a budding economist, political theorist and philosopher. It was predominantly his use of economic theory and political decision making that enabled him to be an advocate for the well-being of all within society. This also allowed him to defer from the most common beliefs of natural rights and conservatism, which had been strongly enforced by those before him in economic policy. Naturally, the fact that his ideas were contrasting would bring forth the assumption that they derived from empirical notions,

In their hierarchical capitalist systems, class is distinctly separated and is dependent on income levels, for example those of higher class tend to associate with each other, limiting the potential of the lower class with low incomes to merge into the higher classes. One of the main social inequalities, predominant in the nineteenth century but still relevant today, is gender inequality. In Mill’s time, women were treated similar to slaves everything they owned (including their income) belonged to the men in their lives. Essentially, almost half of the population had no income. In today’s world there have been significant improvements, however women still only earn two thirds as much as men. As of 2012 only 3% of chair positions in the Australian Stock Exchange 200 were held by women. (Dixon, T. & O’Mahony, J. 2013) This highlights the positional inequality and thus the income inequality with in Australia between men and

By implementing ways to increase the income of the poor and reduce those of the rich, the government can close the income inequality. Unemployment in the economy is one of the main causes for income inequality, by increasing welfare payments to those who are unemployed it would result in an over increase in the level of equality. Similarly, elderly people who are supported by pensions would benefit from an increase in pensions, this again would close the gap as the elderly is another critical area of inequality. Increasing the minimum wage can reduce inequality, providing that unemployment doesn’t change, as it lifts the income of the poorest people. Mills would most likely suggest that there is an increase in the progressive tax system, more specifically on large businesses and high profit earners as he perceives them to be the issue with the struggling lower class. This would decrease the income of those at the top end of the income scale and allow for more money to be redistributed to those at the bottom