3.Rationing and the Distribution of Income
Not everyone does equally well under a system of price rationing. The system discriminates in favor of some by giving them large amounts of goods and services, and against others to whom it gives very little. We call the first group the rich and the second group the poor.
People with skill and ability, luck, and willingness to work hard do well under a system of price rationing. They are either able to sell their labor to others for high amounts, or produce and sell things (goods, services, or ideas) that others value highly. Some who do well have had the luck to inherit wealth, usually from an ancestor who had skill, ability, and willingness to work hard. There are others who do well because they evade the rules of the system, using deceit and force to obtain wealth and income. The poor, on the other hand, are those who for some reason do not have anything to sell that others value highly.
Though income is the obvious way to measure how well people do under a system of price rationing, it is not the only item that matters. Some people know how to use their money better than others. Some people can "stretch" the dollar or "make it go a long way." People must pursue their goals in a world of uncertainty and partial knowledge. The following people do better under a system of price rationing: those who can distinguish a product of high quality from one of low quality, those who buy when and where prices are lower, and those who buy only those items that best lead to their goals.
The question of rich and poor has interested economists in the past.