There recently has been debate on this page about whether economics is a science or not. It looked ridiculous to me, since every economist bases his or her economic theory on personal beliefs about humanity and society, and often on unrealistic hypotheses, none of which can be proved scientifically.
Economic theory is also determined by the economic class to which one belongs. There can never be universal truth in an economic theory. This problem was demonstrated in economic professor Michael Spence's Dec. 31 article, "The distributional challenge." Spence listed three main ways of ameliorating economic inequality: social security policies, tax system reform and industrial policies. He says "all of these measures have implications for economies' efficiency and adaptability."
I think it very strange that Spence does not mention the most prominent cause of economic inequality, which can be remedied in a straightforward manner: the preferences given to unearned income. The degeneration of companies into tools for the greedy few to amass fortunes is eroding capitalism. This trend is destroying not only the fabric of society but also the natural environment through the reckless exploitation of resources.
Tax systems, corporate accounting systems and financial regulations must be rectified to punish management whenever it delivers disproportionate rewards to shareholders amid the sacrifices of workers, and to punish those bankers who become engaged in reckless moneymaking not for the development of industry but for personal profit.
It is quite simple; without these measures, economies are destined to turn into Sodom.
The opinions expressed in this letter to the editor are the writer's own and do not necessarily reflect the policies of The Japan Times.