IL Explainer - Ep 1 | Economic Growth with Social Justice by B.R. Shenoy

Source: https://www.youtube.com/watch?v=3hCLozngwE8 Duration: 157.7s

Narrator (00:00): In a 1977 paper titled Economic Growth with Social Justice, B. R. Shenoy, an Indian liberal and economist, spoke about the relationship between consumer sovereignty, economic freedoms, and social justice. In this video, I’ll take a deeper look at what he meant by the relationship between consumer sovereignty and social justice. Shenoy argued that in truly free societies, citizens or consumers control economic affairs. All economic affairs of a free ir own. Then do that we have make goods and services in an economy, and then in turn the prices define the direction of the economy. Now but what exactly is meant by consumer sovereignty? Consumer sovereignty as an economic concept argues that consumers have some power over the goods and services that are produced in an economy. This also means that consumers are the best judge of their own welfare in an economy. Now an economy that is focused on the individual on individual consumer can be better understood by what it’s not. Shenoy did this by talking about the consumer in a communist society. In his paper, he wrote, in a communist society, the state determines the needs of consumers, arranges the distribution of goods and services, and allocates resources among alternative uses. Individuals do not enjoy fundamental economic rights, and forward markets do not exist. What did Shenoy mean when he used the word social injustice in this context? He defined social injustice as an inevitable state under the socialist economic system, which would inevitably then reinforce various inequalities. These inequalities, he argued, would be reinforced through monopolies, privileges, and even subsidies. He argued such a system would bring to privilege in individuals and groups unearned and unmerited incomes at the expense of the rest of the community. With greater economic freedom, he argued that there was no need or no room for monopolies to exist. Now there was also no need for monopolies in production, distribution, imports, and exports. All incomes of all individuals, wages, interests, rents, and profits would correspond to their respective contributions to the national project. Situation permits windfalls. Hence, no one can appropriate someone else’s earnings. That is there can be no social injustice.