ally owned resources. However, there are people who do not possess the skills or resources needed to earn a living so the government is needed to provide programs that redistribute income to the people who fall in these categories (Market Economy, n.d.). Even though the Netherlands is considered a country of high income and wealth, it also recognizes the need for income distribution programs. In order to distribute income, the Netherlands has developed various tax programs, social security. The Dutch government also provides a program to its people subsidizing higher education costs through a graduate tax or income contingent loan. This program has helped in equalizing the redistribution of income (Jacobs, 2002). The Netherlands boasts a generous welfare program that includes unemployment insurance benefits, welfare, social insurance (retirement plans), and employee insurance, (health and disability). Because the government has received much criticism about its generous welfare system, it has started to make changes in the system beginning with the social security program.
Utility maximization is the process of making choices that allow the consumer to gain the most benefit based on income and price. Because the Netherlands is considered a wealthy country, the Dutch people can consume more of the things they want thus increasing their utility maximization.
Income distribution in the command economy is one where the government dictates what a person will earn. Before the fall of Communism in Russia, Cuba experienced a thrivi
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