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Is Social Justice a Luxury or a Necessity for Egypt?

June 27, 2014
The thin line between poverty and wealth in Egypt

Calls for Social Justice and talks about wages have been hyping in Egypt, but why does inequality matter at all economically? Many people in the Egyptian political arena call for the termination of strikes until Egypt overcomes the heated transitional period. Their argument lies upon the idea that stability in itself would guarantee an increase in wages and consequently the attainment of a rather narrow-view of economic justice. The policy prescription goes on with the recommendation of austerity measures in order to reduce the budget deficit and make resources available for investment. The notion of austerity here usually means cutting down wages and expenditure on public goods such as education and health, which more often than not generate positive externalities and are vital for economic progress. Cutting down wages, from an economic point of view, is detrimental during a recession as it reduces aggregate demand for goods and services and thus prolongs the span of recession. This school of thought believes that the aptitude of rich business men to make massive investments would naturally mean that the fruits of growth generated reach the majority of the society in a mechanism…


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