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Why the Poor stays poor and the Rich stays rich in an Capitalistic Society and how that Effects the Economy.
May 28, 2009 by noga
In a capitalistic economy, the riches stay rich and the poor stays poor. The government doesn’t care whether one is poor or not, but only about how much tax they can get from the citizens. A huge point to consider nowadays in a capitalistic society is the neglection of social welfare from the government. The government leaves the businesses alone, which means that if one becomes broke due to a failure of business, the government is not there to back you up or even pat you on the back. We have collected information’s from http://www.fiji.gov.fj/cgi-bin/cms/exec/view.cgi/44/3674 that the social services are being neglected because of the increasing wages and salaries, the increasing GDP. This means that the poor who don’t make money, are not helped, and the government, even though they know the fact that they know that these people need social services, will neglect it just because the governmental cost on running their own government. Everybody basically revolves around money because it’s the only thing that basically gives one power to do what they desire or provide one their necessities. In certain countries such as China, Vietnam, Indonesia, Thailand, and many other countries, the workers are being exploited with not enough wage, but the government is not beside them to support their daily needs such as food, clothing, medication and education. I would like to quote something that was written by Che Guavara in the Marxist Revolutionary, “The world is hungry but lacks the money to buy food; and paradoxically, in the underdeveloped world, in the world of the hungry, possible ways of expanding food production are discouraged in order to keep prices up, in order to be able to eat. This is the inexorable law of the philosophy of plunder, which must cease to be the rule in relations between peoples”.” What this quote sais is that even though there are workers who are not provided with enough wage for their necessities, the world, which is the government in this case, doesn’t provide much services because if they do, it will interfere with several company’s businesses by providing the materials for free.
Now, I would like to explain how the poor stays poor and the rich stays rich and how this hurts the economy. This is because as the economy proceeds, and the government printing more and more money, the poor don’t have enough money to even start business nor keep up with the increasing inflation rate, so they have no choice but to stay poor. On the other hand, the wealthy people who has enough money to invest and own private property, will stay rich because they can make money with the money that they already have and also, follow the inflation rate. I would also like to mention about the inflation for the rich and the deflation of the poor and why it hurts the economy. The graph that is presented by http://online.wsj.com/media/info-poverty0604-richpoor.gif, we found out that since the year 1969 until the year 2004, the comparison of the rich as the poor drastically changed. Even though the number of poor decreased from around 13% to 11%, the percentage of the rich has increased from 4% to 19%. This means that the price of the goods that were cheaper in the 1969s, has increased, which effected the 11% of people who are below the poverty line. This will hurt the economy because the system of Capitalism, mentioned by http://dontfearthetruth.com/2009/04/01/inflation-for-the-rich-deflation-for-the-poor/ adjusts the prices of goods depending on the incomes of the citizens, which means that the price of materials will go up, due to the increasing number of the rich. In a website called http://www.globalissues.org/article/26/poverty-facts-and-stats, we have collected information’s that atleast 80% of the world’s population lives under $10 a day. I would also like to mention about the fact that the poorest 40% of the poorest population makes up 5% of the global income, while the 20% of the rich ones make ¾ of the worlds income. If this keeps to continue, then the system will have to adjust the price to the poor, which will cause deflation. If deflation is caused, although it sounds like it will help the rich people, it will hurt them because the cost of houses, cars and stocks that used to cost more, will go down. http://dontfearthetruth.com/2009/04/01/inflation-for-the-rich-deflation-for-the-poor/ also mentions that if this happens, the banks, IBs, and the investors will be affected too since the % of the interest loan will decrease and because of that, the economy will start to fall. I would like to remind the opposition and the audiences that this is the main reason why the global economic crisis happened.
Posted in Uncategorized | tagged capitalism, economy, Global crisis | | 3 Comments
on May 31st, 2009 at 3:25 am
Interesting how you talk about the increasing socio-economic gap in our world. But as a rich person, how have you, or will contribute to lessening this crisis?
on May 31st, 2009 at 6:27 am
Nowadays, since there are so many people who are below the poverty line, the word wealthy can be in use to everyone who is above the line. As a person who is above this poverty line, honestly, I cannot make much difference, but its what “we” can do to prevent these things from happening. Firstly, we can lower the tax rate to prevent people from going bankrupt trying to pay taxes and support their family at the same time, secondly, we can all support each other instead of focusing too much on competition. It is true that competition will encourage one to work harder, but it is also putting many companies out of business.