Wealth redistribution is poor in a capitalist economy because of Lack of any economic regulations by...........

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Wealth redistribution is poor in a capitalist economy because of

Lack of any economic regulations by the State
Lack of centralized economic planning that may seem to bring about greater equity

Which of the above is/are correct?

1 only

2 only

Both 1 and 2

None

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Explanation:

By the very nature of a capitalistic economy, the goods are bought by the consumers and money flows to the entrepreneurs. As there is little state intervention or taxes; there is little redistribution.

Statement 1: But, states regulate economies by way of laws, rules and regulations, for e.g. licensing of certain industries or labour laws that prevent the exploitation of labour.

Statement 2: If the state plans for more equitable growth, it can for e.g. provide greater incentives for capitalists to setup industries in rural or backward areas so that rural-urban disparity can be minimized.