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Is capitalism creating an expanding gap between the rich and the poor?

Communism has lost the conflict of ideologies. All that remains is capitalism, and a failing capitalism at that. While the world is in recession the investment banks take advantage to continue paying immense bonuses despite having been bailed out only a few months earlier. When the pay of workers is cut the top bosses receive ever more share options and perks. Capitalism leads to an ever expanding gap between rich and poor.

All the Yes points:

  1. We can see it on a global scale
  2. It is those who do not work who reap the rewards from those who do
  3. China is an example of this occurring
  4. limited resources and the zero-sum game
  5. Referendum For A New Democracy

All the No points:

  1. it just appears that way
  2. there is a difference between egalitarian equality and political equality
  3. Income is based upon the market value of each person’s productivity

We can see it on a global scale

Yes because…

All we need to do is look at Bono’s charitable efforts to see that our nation is expediently wealthier than third world countries. The gap is continuing despite the recession. Because as the recession reigns people’s spending in, it also reigns in the amount of their money that they give to charities. In Britain we find it terrible when we have to go a week buying the value goods from our supermarkets. But this is incomparable to the poverty experienced in developing, third world countries. Britain’s living standards have increased dramatically, and so is what we expect out of life. However, those in Africa have the same expectations as they did 10 years ago. This is the true increase in inequality caused by a capitalist state which dictates that nothing is worthwhile unless it makes a profit.

No because…

The expansion of capitalism has brought great economical benefits, and the reasons behind an existing poverty gap are not purely due to capitalism per se, what PROP is saying is false. They say that Africa has no more expectations of economical growth than what they had 10 years ago, this is totally wrong since Africa´s GDP growth has increased in the past decade in a 5.4%, in addition expectations for next year’s growth are around 7% [[www.engineeringnews.co.za/article/africas-economic-growth-may-reach-7-in-2010-2010-02-22]].

This growth is because of the change in their policies towards a more open economy, bringing as a result attraction of foreign direct investment which has a direct impact in the country´s wealth and on the peoples living conditions; more jobs are being created and a constant accumulation of capital.

The reasons behind the poverty gap are not purely capitalistic; a clear example may be seen at the development of the African region between the 60´s and the 80´s, where wars, political and social instability hampered economical growth that would had improved the regions wealth. Nigeria reduced its population below the poverty line from 43% to 34% from 1985 to 1993 and 59% of its GDP was related to private merchandise trade; right after the sub-Saharan region came into a period of greater stability.[[data.worldbank.org/country/nigeria]]On the other hand countries as Somalia, where armed conflicts are in progress, have had less or even no growth nor trade or investment[[data.worldbank.org/country/Somalia]]showing that the true reasons why there is poverty are other.

OPP believes that the solution to the great poverty gap is in having less and less armed conflicts and political instability and that capitalism has positive impact in combating poverty. As studies have shown income per capita is increasing and prize volatility is decreasing bringing the region a step forward to combat the gap of poverty rather than harming it.Economical is directly related to the improvement of living standards and the possibility of breaking this poverty gap.[[http://www.imf.org/external/pubs/ft/survey/so/2008/car022108b.htm]]

It is those who do not work who reap the rewards from those who do

Yes because…

Karl Marx attested the fact that in capitalism, what makes the money is the labour. It is those of the poor classes who provide the physical labour. The capitalist takes that labour and gives a wage. That wage is not equal to the amount of money made by the labour and that is how the capitalist makes their profit. This can be seen as nothing more and nothing less than exploitation. So whilst the capitalist can set a wage and exploit as many people as he wants, his profits are unlimited. What put him in this privileged position in the first place? The fact that he owned the equipment bought through previous wealth. So in his life time, the capitalist will continue to increase his profits whilst the labourers will earn the same set wage that the capitalist so decides. This is what is increasing the income gap between the rich and the poor.

No because…

It is a rather broad generalisation to state that the capitalist owned the equipment due to previous wealth that he had been born into. There is a vast amount of social mobility in Britain whereby people can earn money and make big profits when they had very little to start with. Alan Sugar is one example. From selling goods out of the back of a van this is now one of the richest and famous men in Britain. It is his hard work that created the gap between him and the poorest, not the capitalist system.

Also we have to point out that a capitalist system is a more fair system where people are paid proportional to the work performed. Contrary to what Prop is saying this is not explotation, you are not rewarding a person who fixes pipes the same as a doctor at a hospital, they are different works which demand different capabilities and hence different rewards. Explotation would be if they recieved no benefits, but workers in the status quo have ensurance, health care, and wages; which may be not as high as the CEO of the company they work for, but they are good, suficient and fairly established through meritocracy. In the times of Karl Marx explotations of the workers were true and evident but right now it is not creating a gap between people, in the status quo persons are recieving benefits and opportunities where enterpreneurship can happen to be succesfull(as on Alan Sugar´s example). Finally, the “capitalist” doen not completely set the wages he desires, they are regulations of the government and labour unions that protect workers.

As we have shown, social mobility and oportunities created by the capitalist system are making this gap that the world has been carrying for centuries less and less by giving people a greater capability of improving their living standards. With free trade, investment, foreign companies in a country etc. the GDP of a country increases and hence more jobs, higher wages and greater possibilities of getting out of poverty.

China is an example of this occurring

Yes because…

In the late 1990’s China moved towards a capitalist state as opposed to a socialist one. This change saw an increase in many of the problems that we have in Britain today which has resulted in inequality.

China, under the communist system, had relatively no unemployment. Upon undertaking Capitalism, this statistic started to grow. The welfare state started to disintegrate so that benefits were cut off from the poorer parts of the population, the rural parts.

Government was also seen to want a part in the economic rising occurring since 1978 so Government started to act as a capitalist itself; investing in the most lucrative industries which at the time were the costal exporters. Nowadays, we can see government helping big industries, we only need look at the banks in the recession; the government helping the bourgeoisie instead of the proletariats.

All of these things that we have seen occur through China are an exact illustration of how Capitalism increases the income gap between the rich and the poor.

No because…

limited resources and the zero-sum game

Yes because…

The reason the gap is widening is because wants (as anyone who has ever studied economics will tell you) are limitless. If the rich keep working towards satisfying their wants and remaining rich, the poor will/do, given the limits problem,lose out. Most of the poor are not provided with the opportunity to be rich, as the rich keep hogging these opportunities in an attempt to maintain their economic status quo…

No because…

Referendum For A New Democracy

Yes because…

Yes. And it can be reversed when we start asking questions about the big picture…
Do we need a Referendum For A New Democracy?

Are you concerned about the future of democracy? Do you feel democracy is under attack by extreme greed in countries around the world? Are you sick and tired of: living in fear, corporate greed, growing police state, government for the rich, working more but having less?

Can we use both elections and random selection (in the way we select government officials) to rid democracy of undue influence by extreme wealth and wealth-dominated mass media campaigns?

The world’s first democracy (Athenian democracy, 600 B.C.) used both elections and random selection. Even Aristotle (the cofounder of Western thought) promoted the use random selection as the best way to protect democracy. The idea of randomly selecting (after screening) juries remains from Athenian democracy, but not randomly selecting (after screening) government officials. Why is it used only for individual justice and not also for social justice? Who wins from that? …the extremely wealthy?

What is the best way to combine elections and random selection to protect democracy in today’s world? Can we use elections as the way to screen candidates, and random selection as the way to do the final selection? Who wins from that? …the people?

No because…

it just appears that way

No because…

The only reason this has come into issue now is due to the vast amount of press coverage given to the topic. This does not mean that the income gap is rising, just that we are hearing about it and making abigger deal out of it now. The gap is becoming more visible to us now. But surely this is a great thing. If we can see the inequaltiy we can attempt to change it. When we fail to see the inequality, that is where the problem lies. In communism, the inequalities are hidden. So this capitalism is well placed.

Yes because…

there is a difference between egalitarian equality and political equality

No because…

What is riling people’s feathers is that there are some rich people and a lot of poor people. An egalitarian would like to see all people earning the same. However, this is not political equality. What people earn should be based upon their efforts and achievements, not some abstract notion of equality. People should be rewarded for their efforts. The emotion that is driving this anti-capitalist ideology is not reason and rationality but laziness and envy. This is a meritocratic society whereby those who work longer hours, those who plan and those who try earn more than those who have a poor work ethic. This is justice, and this is what our capitalist state provides.

Yes because…

This simply does not work out mathematically. The gap is now so big between the rich and the poor, “political equality” would have to argue that the rich have worked 55,000 times harder than the average worker. Think of those billionaires who struck luck on the stock market after investing in a few shares. Compare them to those who work two jobs in order to keep their family above the bread line. Of these two sets, how can the wealthier be said to work harder? This is too simple of an analysis. It looks towards what capitalism is supposed to provide instead of what capitalism is actually doing.

Income is based upon the market value of each person’s productivity

No because…

The capitalist system is not creating the gap between the rich and the poor, it is the people themselves who are creating the gap. The rich continue to do what made them rich and the poor continue to do what made them poor. Surely criticizing the rich for choosing the most lucrative appointment of their time is not helping the scenario. They did what anyone with a sense of ambition would do. Everyone has the opportunity to choose the most lucrative use of their own time. They cannot complain when they have made the wrong choices. It is this blame the system not myself attitude that got poor people where they are in the first place.

Peter Schwartz
Criticizing income inequality is like complaining that a computer carries a higher price than a paper clip.

Yes because…

This is assuming that Britain is truly meritocratic; that anyone born in any circumstances can get educated and achieve great things. This is quite simply not the case. The capitalist system gives more opportunities to those who have capital. Education is money orientated; those who go to private school are more likely to be accepted into Oxbridge due to the old school tie network that is at play.

The capitalist system is a system whereby the rich get richer and the poor get poorer, the rich can reinvest their capital whilst the poor have to continue to work and spend every penny they have on living costs. These living costs, including utility bills and food, are profits for the rich. So the poor remain unable to save their money to make investments because they spend all their money on capitalist living costs which make the already rich even more rich. This is the injustice of our capitalist system.

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3 years ago

who does write these texts? i’d like to use it in my essay about Marx’s theory for sociology course, but I can’t find author of these quotes to make reference of it

Robert M. Renk
7 years ago

Capitalism is an economic system of private property with free trade between people. This system is responsible for the vast wealth creation in around the world. Under a capitalist system both buyer and seller benefit from free trade. For someone to become rich under capitalism one has to sell a product or service that consumers are willing to freely exchange their money. In order to keep making profits to become rich(or stay rich) producers have to keep finding ways to produce better or less expensive products or the consumer will by from another or not buy at all. So products and services become cheaper and better over time in a truly capitalist system. Just one example is a mainframe computer $4.7 million in 1970; today PCs 20x faster with more memory sell for less than $500 with accessories.
As for the income disparity frowning between rich and less wealthy, maybe government(socialism) could be responsible for that? In the USA the federal reserve can basically counterfeit money and hand it out the it’s politically connected allies. Or maybe there is some other reason for this income disparity.

“So you can take a market and beat it, tax it, regulate it, subsidize it, flood it with fake money, punish its performers and reward its losers, hobble its capital sector, strangle consumers, nationalize stuff at will, and erect every barrier to trade and cooperation, and STILL call it a market. When the scheme fails, it’s the free market that failed, so clearly we need the totalitarian state to sweep into action.”

– Jeffrey Tucker

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