Why With Capitalism the Gap Between the Rich and the Poor Gets Larger

Income inequality will inevitably continue to rise even if income increases.Of course there are several arguments to support this


Owners of capital all around the world exercise great freedom and manifest monopoly over resources. Hence benefits of capitalism accruing mainly to the owners of capital has some sense.

Two factors determine one's income: labour and capital. The price of labour will decrease due to the increase in technology. However, capital will become more scarce as capital represents an ownership of resources. Since the supply of most resources will
be unchanged or even decreased, the price paid to capital owners will increase. Capital begets capital, therefore, inequality will increase. Some may say that technology will create new jobs. First, there's no evidence to show that . Second on aggregate, the jobs created have more value than the jobs lost. Furthermore, since the jobs created are always less (but perhaps more valuable) than the jobs lost, there is then inequality. A few programmers can create a spreadsheet and replaces an entire nation's worth of bookkeepers. This leads to loss of income for a vast majority widening the poverty gap.


Capital can take advantage of those with ideas because you need capital to develop and grow such ideas. Therefore, capitalists will always get more ahead. A few talented individuals might always get ahead. But the masses will have to rely on their labour which given its decreasing price relative to capital will see their share of wealth decrease.

Government has enabled those who are richest and most politically connected to get away with taking more money and give less to society. Part of the way to increase profits is by downsizing and laying off of workers in the domestic countries and moving overseas to take advantage of cheap labour, less regulations and tax holidays. Its just as easy as paying less salaries, firing people and taking away benefits to keep all the money.

The 001% have so much money that it doesn't make them any better off. What's sh.500m to sh.700m? But going from sh.30,000 to sh.60,000 is a dramatic increase.

Regardless, as billions continue to ebb in poverty world over, governments need to equip them to earn more than taking from the rich to close the gap. Education, facilities, housing, opportunities and second chances e.t.c. Indeed if a critical mass of people in a society are poor, uneducated, victimized and feel disconnected, they will riot.
Share on Google Plus

About Rowland Mtetezi

This is a short description in the author block about the author. You edit it by entering text in the "Biographical Info" field in the user admin panel.
    Blogger Comment
    Facebook Comment

0 comments:

Post a Comment