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Social Welfare System

Distribution of Wealth & Justice

Distributive Justice concerns what is right with respect to the allocation of goods in a society according to the philosophical or ideological principles of the resident nationat a specific time, and on that basis, determines whether the state of affairs is acceptable. Thus, a community whose individual members are rendered their due would be considered a society guided by the principles of distributive justice. Often contrasted with procedural justice, which is concerned with just processes such as in the administration of law, distributive justice concentrates on just outcomes and consequences.

For example, someone who evaluates a situation by looking at the standard of living, absolute wealth, wealth disparity, or any other such utilitarian standard, is thinking in terms of distributive justice. Generally, those people who hold egalitarianism to be important, even implicitly, rely on notions of distributive justice. What unites them is the mutual interest in achieving the best possible results, or in terms of the example above, the most perfect distribution of wealth.

Distribution of wealth is a comparison of the wealth of various members or groups in a society, and is one aspect of the economy and social structure. Typically, various racial and ethnic groups possess differing amounts of wealth, and the same is true when people are grouped by age or education. Different jobs bring in greatly different wages; the pay for some jobs is thousands of times greater than the pay for other jobs.

The phrase "distribution of wealth" should not be confused with the phrase "redistribution of wealth". The statistical study of the distribution of wealth is designed to provide data, not recommend policy.

Statistical distributions
There are any number of ways in which the distribution of wealth can be analysed. One example is to compare the wealth of the richest ten percent with the wealth of the poorest ten percent. In many societies, the richest ten percent control more than half of the total wealth.

Mathematically, a Pareto distribution has often been used to quantify the distribution of wealth, since it models an unequal distribution. More sophisticated models have also been proposed.

Redistribution of wealth and public policy
In some countries, attempts are made through taxation or regulation to redistribute capital and diminish extreme inequalities of wealth.

Motivations for such limitations on wealth include the desire for equality of opportunity, a fear that great wealth leads to political corruption, to gain the political favor of a voting bloc, fear that extreme concentration of wealth results in a limited consumer base or motivated by some ideological/religious principles.

The political systems of socialism and communism are intended to diminish the perceived conflicts arising from the unequal distribution of wealth in capitalist societies. The idea is that a government, serving the interests of the proletariat, would confiscate the wealth of the rich and then distribute benefits to the poor. Critics of state-managed economies, point out that the slogan "From each according to his ability, to each according to his need." turns ability into a liability and need into an asset.

The Islamic system attempts, based on divine principles, to find a middle way, whereby the state infrastructure, laws and regulations guarantee the basic minimum for the needy, whilst encouraging and promoting free enterprise for the majority.

Wealth Creation and its Effects
Alternative political systems such as capitalism or objectivism reject most redistributions in favour of wealth creation and abolishment of trade barriers, effectively 'survival of the fittest'. Wealth can be created through several means, such as harvesting and selling natural resources, improving production methods to allow faster creation of wealth, or applying skill and labour to increase the value of materials.

The creation of wealth affects economic growth that can boost demand and trade, create jobs and increase wages. However, since wealth often trickles down unevenly, the standard of living may improve while simultaneously increasing wealth inequality. Thus wealth distribution must be considered alongside such factors as job opportunities, the costs of goods and services, and the base standard of living, a model that the islamic soio-economic endeavours to achieve.

Charity
In addition to government efforts to redistribute wealth, the tradition of charity is a means of wealth transferrence, some of which can be voluntary (sadaqah) or mandatory (eg Zakat – poor due). 

Distribution of wealth in the 21st century
At the end of the twentieth century, wealth is concentrated among the G8 and Western industrialized nations, along with several Asian nations. In the United States at the end of 2001, 10% of the population owned 71% of the wealth, and the top 1% controlled 38%. On the other hand, the bottom 40% owned less than 1% of the total wealth.
Due to progressive taxation, in 2003, the top 1% paid over 34% of the nation's federal income tax, while the wealthiest 10% bore 66% of the total tax load. The trend continues down the income scale to where 25% of income earners paid 84% of the income taxes, and the upper half accounted for virtually the entire revenue (nearly 97 percent).

Despite this, the distribution has been changing quite rapidly in the direction of greater concentration of wealth. Such hoarding of wealth is discouraged within the islamic socio-economic system in favour of mechanisms which actively promote wealth circulation.

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