Wednesday, September 07, 2005

Inequality and Risk

Business organizations are full of people with strong opinions and weak logic. The ability to examine evidence and arguments critically is an important one; students who wish to get top marks in our course should take every opportunity to develop and practise the kind of critical intelligence that comes from serious debate.

So here's something to get you started. Paul Graham's essay on Inequality and Risk argues that economic inequality is a Good Thing, largely on the grounds that intervention to reduce inequality is a Bad Thing. (See also comments by Tim Bray.)

The question of economic inequality itself is not part of the syllabus of our Business and Organization course. But in the course of his argument, Graham touches on a lot of issues that are very relevant to Business and Organizations. He talks about innovation, risk and incentive, and tries to separate notions of wealth and power. He makes some important assumptions about the possibilities of intervention and change in complex socioeconomic systems. His argument therefore represents a synthesis of economic, ethical, social and systems thinking.

In a free society, people are free to adopt different positions on such important and controversial topics, and we certainly don't expect everyone to agree on the conclusions. But those who disagree with Graham's conclusion may accept some parts of his argument; meanwhile even those who broadly agree with Graham's conclusion may not be comfortable with all the details of his argument. You really have to work it out for yourself.

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