A Research On Equilibrium Theory, Effect Analysis And Institution Design Of Harmonious Income Distribution

Income distribution is a problem which has concerned by economist and sociologist for a long time and it is also be found in the policy program of many politics. Because income distribution is always related to the contradiction of fairness and efficiency in economic, there are many different opinions about it among these schools of theory. It is believed that harmonious income distribution relationship is the core of harmonious relationship between people in the background of harmonious society construction. How to narrow the gap of income distribution and create the institution conditions for harmonious distribution relationship by policy measure and market mechanism, it is a hot problem which concerned by both theory circle and policy makers.There are four representative income distribution forms: Clark's marginal productivity income distribution form, Marshall's equilibrium price income distribution form, Marx's distribution according to one's performance form and distribution according to one's performance and production factors form. Different distribution forms lead to different distribution relationship. Marginal productivity distribution form and equilibrium price distribution belong to factor value theory and they are based on market exchange institution. In real economy life, these two distribution forms can't achieve the harmonious income distribution relationship because of the differences in possession production factor, market disequilibrium and imperfect. Distribution according to one's performance form was just implemented in centralized planning economy and price was just a measure instrument in this economy. Theoretically, one person will get the equate income if he or she do equate work, so the income distribution relationship will be harmonious. But there is not an institution which can translate complex works into simple work in centralize planning economy and equate works can't obtain equate income. So income distribution relationship can't be harmonious. Distribution according to one's performance and production factors form is implemented in China's Socialism market economy and it is also based on market exchange. But market imperfect and disequilibrium can't carry out equal value exchange in the period of economy transition in China and this distribution form can't get harmonious distribution relationship.Market main bodies actualize their own economy value through exchange in market economy. Different market pattern and different supply- demand relation may lead to different result in exchange. If supply of goods fall short of demand, the price will be high and producer will have consumers'surplus. On the contrary, if supply of goods is in excess of the demand, the price will be low and consumer will have producers'surplus. The distribution relationship isn't harmonious in these two disequilibrium market patterns. The imperfect market, such as monopoly, corruption, will artificially lead to unbalance between supply and demand and destroy market equilibrium. Distribution relationship will not harmonious unless exchange is equal, because producers can't have consumers'surplus and consumers can't have producers'surplus. Furthermore, exchange will be not equal unless market is equilibrium and perfect. So market equilibrium and perfect is the necessary condition of harmonious income distribution relationship.To actualize harmonious income distribution relationship, China not only need to narrow income distribution gap through secondary distribution measures such as fiscal transfer payment, social security institution and third distribution measures such as charitable cause, but also need to begin at primary distribution measures such as improving the legal system, establishing perfect market system and pushing market to the state of equilibrium through macroeconomic policy. Secondary and third distribution measures are temporary solution of actualizing harmonious distribution relationship and primary distribution measures are permanent solution. China will actualize harmonious distribution relationship only if we take both temporary and permanent solutions.