Final answer:
Proponents of the marginal productivity theory of income distribution believe that each factor of production is paid according to its marginal contribution to the production process, reflecting a competitive market's valuation of each unit of factor's productivity. Therefore, improving worker productivity in low-income countries could lead to better income distribution based on increased marginal productivity. They also suggest that redistribution could disrupt productivity-based incentives, preferring instead to enhance economic output and equality through opportunities for productivity growth.
Step-by-step explanation:
Those who advocate the marginal productivity theory of income distribution argue that each factor of production, such as labor or capital, is paid according to its marginal contribution to the production process. In other words, the income received by a factor of production (e.g., a worker) reflects the additional value or output produced by the last unit of that factor employed. The theory suggests that in a competitive market, each unit of factor is paid the value of its marginal productivity.
This theory also implies that any differences in income distribution are due to differences in the productivity of the resources contributed by individuals or firms. Hence, according to this perspective, if low-income countries are able to increase their worker productivity and thereby their economic growth, they could see a change in their income distribution reflecting the increased marginal productivity of their workers.
Additionally, proponents of this theory might argue that efforts to redistribute income through taxation to achieve greater equality could potentially disrupt the incentives that align payment with productivity. They tend to favor the idea that creating opportunities for increasing productivity, such as through education and job training, can lead to improved economic output and a natural progression towards more equitable income levels without sacrificing economic efficiency.