# Global Poverty and Capitalism

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Does capitalism seek to create an individualistic society?

Evidence shows it does exactly the opposite. Even if some inequality may be necessary the distribution of wealth and earnings is unfair, dysfunctional, or immoral in capitalism. In the US, the shares of earnings and wealth of the households in the top 1 percent of the corresponding distributions are 15 percent and 30 percent, respectively.

http://www.newsocialist.org/magazine/39/article03.html [Broken]
http://www.ssc.upenn.edu/~vr0j/papers/maxrefin.pdf [Broken]
http://www.resistance.org.au/documents/wssf/toolate.shtml

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X-43D said:
Does capitalism seek to create an individualistic society?
What do you mean by "individualistic", and how does that have to do with wealth distribution?

quetzalcoatl9 said:
What do you mean by "individualistic", and how does that have to do with wealth distribution?
In the sense that all human individuals are equal.

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russ_watters
Mentor
X-43D said:
In the sense that all humans are equal.
What do equality and individualism have to do with each other? Heck, to me individualism means exactly the opposite: that all individuals are different, therefore some will naturally earn more or less than others based on their own individual abilities and opportunities. Your thesis doesn't make a whole lot of sense to me.
Even if some inequality may be necessary the distribution of wealth and earnings is unfair, dysfunctional, or immoral in capitalism.
Explain why this is so (meaning why is the current distribution unfair, dysfunctional, or immoral) and explain how it could be better.

You seem to be operating under the postulate that equality of outcome is de facto "fair". Explain why that is so.
In the US, the shares of earnings and wealth of the households in the top 1 percent of the corresponding distributions are 15 percent and 30 percent, respectively.
So what? Again, explain why that's a bad thing.

Lets just lay it out there: the global poverty rate has decreased by half from 1981 to 1991 http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20194973~menuPK:34463~pagePK:64003015~piPK:64003012~theSitePK:4607,00.html [Broken]. How do you explain this fact in light of the parallel fact of the demise of communism? The only possible conclusion from this data is that capitalism is responsible for halving the global poverty rate in 20 years. Truly extrordinary.

You speak of equality, but what's so great about equality if everyone is equally starving to death? The USSR had a pretty high level of equality (with the exception of the ruling elite) - doctors, teachers, and janitors (and their families) lived in equally tiny one-room apartments and stood in equally long lines to buy scarce food to feed their starving families. Is that the kind of equality you're looking for? North Korea has high equality as well. So high that a full 10% of the population starved to death in a realtively short period of time (I can't remember if that's the past 10 years or 20 years) and most of the population is in immediate danger of starvation. Does that level of equality appeal to you?

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vanesch
Staff Emeritus
Gold Member
russ_watters said:
What do equality and individualism have to do with each other? Heck, to me individualism means exactly the opposite: that all individuals are different, therefore some will naturally earn more or less than others based on their own individual abilities and opportunities.
As much as I think that that is in fact quite fair that your material well-being and the potential material luxury you can afford yourself is somehow related to how much material well-being and luxury you managed to provide to others, there is a problem that capitalism (but not only capitalism) suffers from, and that is that your *chances* (with equal potentialities) to do so are highly related to whether your parents, friends... etc are wealthy. Of course there is always the odd exception of the poor child making it to a billionaire, but in general, the odds of being wealthy depend much on your parents being wealthy and influential, and that is a fundamental unfairness.
But again, it is not a defect that only affects capitalism, so I'd take the rare opportunity to agree with Russ here

russ_watters
Mentor
vanesch said:
As much as I think that that is in fact quite fair that your material well-being and the potential material luxury you can afford yourself is somehow related to how much material well-being and luxury you managed to provide to others,
I'm not sure I understand what you are saying there, but ok....
...there is a problem that capitalism (but not only capitalism) suffers from, and that is that your *chances* (with equal potentialities) to do so are highly related to whether your parents, friends... etc are wealthy.
How highly? I mean, I know if your parents are wealthy and they actually give you money, that pretty much guarantees you'll be rich, but what about the corollary: how difficult is it really for someone who'se parents are poor or just don't give them a lot of money to become wealthy?

And an equally tough question is how fair is it to take money from such people in order to provide for others who were not as lucky in the gene-pool lottery?
Of course there is always the odd exception of the poor child making it to a billionaire...
How odd? Seriously, how often does that happen today? What fraction of our billionaires are self-made and/or came from poor parents? How often did it happen 500 years ago that a poor person became rich? How often does it happen in a "communist" country?
...but in general, the odds of being wealthy depend much on your parents being wealthy and influential, and that is a fundamental unfairness.
Why is that unfair? I see people claim that all the time as if it is self-evident. I don't think its self-evident: Tell me why.
But again, it is not a defect that only affects capitalism, so I'd take the rare opportunity to agree with Russ here
Well, then we may be getting a little off-topic. I agree that capitalism isn't perfect and I agree that it would be better if more people could more equally share in the fruits of capitalism's prosperity (which is not to say that there is an inherrent unfairness if they don't), but the main point I'm trying to make is simply that capitalism is vastly superior to every other system that has been tried so far.

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russ_watters said:
What do equality and individualism have to do with each other? Heck, to me individualism means exactly the opposite: that all individuals are different, therefore some will naturally earn more or less than others based on their own individual abilities and opportunities. Your thesis doesn't make a whole lot of sense to me.
No. Individualism means that all humans are equal and not that some countries should benefit and other starve to death. Also during colonial times humans were bought and sold for money. It's quite well recognized now that slavery was an outgrwth of MERCHANTILE CAPITALISM.

This is why i don't support capitalism. I think socialism is better than capitalism. It least everyone is equal and there is no racism. It's more human in that respect.

Western Europeans and North Americans benefit from capitalism mostly but other countries suffer. Capitalism is just a cut-throat, law-of-the-jungle system.

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vanesch
Staff Emeritus
Gold Member
russ_watters said:
I'm not sure I understand what you are saying there, but ok....
That's the basis of capitalism: you make money because people BUY stuff from you (your labor, your intellectual properties, the stuff you can produce with your capital...). And they BUY stuff from you because it improves their material well-being (or so they are convinced). So the more you can improve their material well-being, the more they buy from you, and the more you become wealthy yourself. Funny that I have to explain that to you :tongue:.

difficult is it really for someone who'se parents are poor or just don't give them a lot of money to become wealthy?
Now, it is one of the great qualities of the US that it is not impossible. But it remains nevertheless very difficult.

What fraction of our billionaires are self-made and/or came from poor parents? How often did it happen 500 years ago that a poor person became rich? How often does it happen in a "communist" country?
I haven't gotten any idea. The thing I see, is that people that get into top (public) schools in France, are kids of parents that went to these top schools. It wasn't that way 50 years ago. You will be shocked, but when you went to the prestigious "ecole normale superieure" or the "ecole polytechnique" you are entitled, by law, to a bonus to your salary, no matter where you work in France.
The reason why you can have a "dynasty" is that there are 2 things that matter when you want to get into these schools: 1) the secondary school you went to (which is determined by the address of your parents: if you live in that street, you go to that school) and they recruite only from the most fancy neighbourhoods in Paris ; and 2) the results of your entrance exam. Now, if you have a network knowing the professors and so on, they give you private (paid) courses, very very well designed for the problems that will be given on the entrance exam of that year (it are the same professors that give the private courses, that write up the entrance exam, and that correct them). They don't go as far as to actually GIVE you the questions, but, say, if the topic that will fall is about optics, then you can bet that - by coincidence - they will make you do a lot of optics problems, and much less problems on electricity.
Once you did manage to get into one of these top schools, you get into the Brahman class from which CEO's, top politicians etc... are taken.
Now, it is my understanding that things are much fairer in the US, but I'm sure that similar positive feedback exists.

Why is that unfair? I see people claim that all the time as if it is self-evident. I don't think its self-evident: Tell me why.
It is an hypothesis of equal a priori, from which other grand principles are derived such as justice, democracy etc...

EDIT: if you put into question the equal a priori, then there is no reason why, for instance, everybody should be equal before the law, or why there should be something like 1 person 1 vote. It is true that this idea of equal a priori is relatively recent: aristocracy is exactly its denial, and we dealt with it for more than 80% of our civilized history.

Mind you, we're not talking about you getting a fancy car from your parents, while that poor kid doesn't get his BMW, or the fact that your parents can leave you a nice house and so on.
The point is that a poor kid doesn't get (even remotely) the same chances to devellop his potential of being a productive, intelligent being with a social position that corresponds to those abilities than a rich kid, for 2 reasons: 1) it is harder to convert those potentialities into actual competences (not having the opportunities to get a good schooling) and 2) even WITH those competences, daddy's (mom's) network will get the rich (even slightly incompetent) kid much higher up the social ladder (CEO or something) than the poor kid.

Now, if you want to have a *rational* argument for this, I'd say that it is a waste. If you consider potential talents to be a scarce ressource, then it should be used optimally. So the poor kid that has the potentiality to become a good manager should get his chances, just because there is a lack of good managers in general (I didn't say that there's a lack of managers, but of GOOD managers).

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Mercator
X-43D said:
No. Individualism means that all humans are equal and not that some countries should benefit and other starve to death. Also during colonial times humans were bought and sold for money. It's quite well recognized now that slavery was an outgrwth of MERCHANTILE CAPITALISM.

This is why i don't support capitalism. I think socialism is better than capitalism. It least everyone is equal and there is no racism. It's more human in that respect.

Western Europeans and North Americans benefit from capitalism mostly but other countries suffer. Capitalism is just a cut-throat, law-of-the-jungle system.
X, there is no greater unequality than in communist China. As for more human and less racist... pardon me? But of course you can argue that China is not a real communist country, and that is right. There is no real communist country because communism is an illusion and one that has caused terrible suffering for that.

Pengwuino
Gold Member
X-43D said:
No. Individualism means that all humans are equal and not that some countries should benefit and other starve to death.
I think this line sums up your entire rant. :rofl: :rofl: :rofl:

loseyourname
Staff Emeritus
Gold Member
vanesch said:
As much as I think that that is in fact quite fair that your material well-being and the potential material luxury you can afford yourself is somehow related to how much material well-being and luxury you managed to provide to others, there is a problem that capitalism (but not only capitalism) suffers from, and that is that your *chances* (with equal potentialities) to do so are highly related to whether your parents, friends... etc are wealthy. Of course there is always the odd exception of the poor child making it to a billionaire, but in general, the odds of being wealthy depend much on your parents being wealthy and influential, and that is a fundamental unfairness.
But again, it is not a defect that only affects capitalism, so I'd take the rare opportunity to agree with Russ here
To be honest, I don't even think of this as much of a problem. Who cares if your chances of becoming a billionaire are seriously impaired by the fact that you come from a lower class? Does anyone really need a billion dollars? You do if you're a captain of industry making huge transactions on a regular basis, but for the average person, I'd think a comfortable middle class existence would be enough. That's the thing that capitalism can offer above and beyond all other systems - the chance to come up in the world, not to the level of a billionaire, but to the level of someone who owns their own home, lives relatively free of debt, doesn't live paycheck to paycheck, and enjoys the comforts of modern conveniences and a high standard of living. Capitalism, at least in the current form it takes in the US, offers that opportunity to anyone willing to make a plan and stick to it. Unless there are great extenuating circumstances, you really have no one to blame but yourself if you aren't making $40K a year at least by age 30 as a single person. Unless you desire an extravagant life, that's more than enough to enjoy amenities that a King 200 years ago would never have dreamed of. Mercator said: X, there is no greater unequality than in communist China. As for more human and less racist... pardon me? But of course you can argue that China is not a real communist country, and that is right. There is no real communist country because communism is an illusion and one that has caused terrible suffering for that. Capitalism is not better than socialism. If capitalism is a better economic ideology then why are Africans starving each day? In the end the elites are going to adhere to a system that best suits them be it socialism or capitalism. The less fortunate are always the losers. Pengwuino Gold Member Africans do not adhere to anything resembling market forces nor do they adhere to many good socialist principles. vanesch Staff Emeritus Science Advisor Gold Member X-43D said: The less fortunate are always the losers. That's unfortunately a tautology alexandra Vanesch wrote: ...but in general, the odds of being wealthy depend much on your parents being wealthy and influential, and that is a fundamental unfairness. to which the following question was raised: Why is that unfair? I see people claim that all the time as if it is self-evident. I don't think its self-evident: Tell me why. Well, the reason it is unfair is because capitalism is a system that espouses an ideology (and presents the facade) of being a meritocracy. However, a meritocracy implies that there is a 'level playing field' to begin with - and here is a quote from a second year politics course to support that a meritocracy implies equal opportunities: 2. Opening definitions. A meritocracy is a society in which important social goods, particularly jobs and incomes, are distributed to people according to 'merit', where merit is understood as function of effort and ability. Meritocracy implies (a form of) 'equality of opportunity': equal opportunity to get jobs and incomes for people of equal (actual or potential) merit. Putting the point negatively: hereditary factors should not trump merit (= effort/ability). http://www.politics.ox.ac.uk/teaching/ug/readinglist/203/WhiteMT04-1.pdf [Broken] Last edited by a moderator: alexandra X-43D said: No. Individualism means that all humans are equal and not that some countries should benefit and other starve to death. Also during colonial times humans were bought and sold for money. It's quite well recognized now that slavery was an outgrwth of MERCHANTILE CAPITALISM. This is why i don't support capitalism. I think socialism is better than capitalism. It least everyone is equal and there is no racism. It's more human in that respect. Western Europeans and North Americans benefit from capitalism mostly but other countries suffer. Capitalism is just a cut-throat, law-of-the-jungle system. I agree with you, X-43D. The human cost of capitalism is unjustifiable. I also think capitalism is dangerous for a number of other reasons, the most pressing of which is what the insatiable greed for profits does to the environment. Over the past few weeks there have been a number of urgent reports by scientists about the effects of pollution, global warming, etc - people don't realise how much is at stake here, this is why they are so complacent about the economic and political system they support. They will not see what they do not want to see. russ_watters Mentor X-43D said: No. Individualism means that all humans are equal and not that some countries should benefit and other starve to death. How does that fit with the definition of the word "individual"? "Marked by or expressing individuality; distinctive or individualistic" -- ie, different. Are we making up new definitions for words here? You're using the word almost exactly opposite from what it really means. Also during colonial times humans were bought and sold for money. It's quite well recognized now that slavery was an outgrwth of MERCHANTILE CAPITALISM. What does that have to do with anything? Slavery does not exist in capitalism today. Hard to argue that its a flaw when it doesn't exist. This is why i don't support capitalism. I think socialism is better than capitalism. It least everyone is equal and there is no racism. It's more human in that respect. Are you at all concerned with the reality of the world we live in today? Its all well and good that in Marx's book the world you describe exists, but it doesn't exist in reality. You're living in a dreamworld, Neo. Western Europeans and North Americans benefit from capitalism mostly but other countries suffer. Capitalism is just a cut-throat, law-of-the-jungle system. And what of the hard, factual data that says otherwise? Capitalism is not better than socialism. If capitalism is a better economic ideology then why are Africans starving each day? Simple: they don't live in a mature capitalistic society. There is no mature capitalistic society that isn't prospering. Last edited: russ_watters Mentor vanesch said: That's the basis of capitalism: you make money because people BUY stuff from you (your labor, your intellectual properties, the stuff you can produce with your capital...). And they BUY stuff from you because it improves their material well-being (or so they are convinced). So the more you can improve their material well-being, the more they buy from you, and the more you become wealthy yourself. Funny that I have to explain that to you :tongue:. Sorry, I thought you were talking about charity. I get it now. russ_watters Mentor alexandra said: Well, the reason it is unfair is because capitalism is a system that espouses an ideology (and presents the facade) of being a meritocracy. However, a meritocracy implies that there is a 'level playing field' to begin with - and here is a quote from a second year politics course to support that a meritocracy implies equal opportunities: No, alexandra. All capitalism claims is that the government won't interfere with your ability to succeed. And the touble with the forced "equality" (in quotes because if it is forced, it isn't real) of some systems is that success is less based on merrit if it is given by the government. No system can be a complete meritocracy, but capitalism comes closest of any. It is the only system that allows any social mobility at all. I also think capitalism is dangerous for a number of other reasons, the most pressing of which is what the insatiable greed for profits does to the environment. Over the past few weeks there have been a number of urgent reports by scientists about the effects of pollution, global warming, etc - people don't realise how much is at stake here, this is why they are so complacent about the economic and political system they support. They will not see what they do not want to see. There's a big problem with that line of reasoning: capitalistic societies are the only ones that are at all concerned with environmentalism. Yeah, maybe in theory people who are motivated soley by greed shouldn't care about the environment, but in the real world, capitalistic societies do care about the environment and are the only ones making any effort to improve it. You too, alexandra - the principles of Marx in his book sound reasonable (sorta), but in the world we live in today, it just isn't that way. Last edited: vanesch Staff Emeritus Science Advisor Gold Member loseyourname said: I'd think a comfortable middle class existence would be enough. Me too, but that, in itself, isn't so evident if you were brought up in a poor ghetto, no ? Maybe this works better in the US, but in Europe, despite all social money spend on it, the "move up" isn't that easy. Vanesch said: It starts with your neighbourhood, your friends, your school, your education, the way you can network, ... This is a function of an aristocracy. A good capalist society should attempt to curb that. I'm not sure how differant things here are from their either but if it is worse do you think it is possibly due to the cultural influence? We've never had an aristocracy here. Not a real one anyway. Vanesch said: but in general, the odds of being wealthy depend much on your parents being wealthy and influential, and that is a fundamental unfairness. If someone is rich they will have enough money to pass thsi down to their next generation. They in turn will have the ability to make this grow or squander it. This isn't inequality it's simply watching the more extreme beneficiaries of capitalism help the coming generations of their family. Alex said: Well, the reason it is unfair is because capitalism is a system that espouses an ideology (and presents the facade) of being a meritocracy. However, a meritocracy implies that there is a 'level playing field' to begin with - and here is a quote from a second year politics course to support that a meritocracy implies equal opportunities Those opertunities are also subject to chance and as stated above the benefits pass on between generations. Alex said: I also think capitalism is dangerous for a number of other reasons, the most pressing of which is what the insatiable greed for profits does to the environment. Over the past few weeks there have been a number of urgent reports by scientists about the effects of pollution, global warming, etc - people don't realise how much is at stake here, this is why they are so complacent about the economic and political system they support. They will not see what they do not want to see. Any sort of system can contribute to the decay of the environment. Russia during the industrial revolution was probably just as big a poluter as anyone else. Capitalism is just a cut-throat, law-of-the-jungle system. You might as well say that evolution is unfair. To me one of the major points for capitalism is that it parallels such a natural process so well. A natural process that has been working for hundreds of thousands of years and got us where we are now. russ_watters said: Simple: they don't live in a mature capitalistic society. There is no mature capitalistic society that isn't prospering. That's nonsense. The reason why Africa is poor is because they need to adjust their economy to meet the needs of the global market (the international trade system) including excessive debt payments. What you wrote above is clearly Eurocentric. I think you didn't even took the time to read the link i posted above. There are reasons why most of the world population is poor, including much of south america. Last edited: loseyourname Staff Emeritus Gold Member vanesch said: Me too, but that, in itself, isn't so evident if you were brought up in a poor ghetto, no ? Maybe this works better in the US, but in Europe, despite all social money spend on it, the "move up" isn't that easy. Strangely enough, it seems distinctly the case that the people in the US not moving up are the people stuck on welfare. As Russ has said, instead of teaching them how to depend on themselves, you're teaching them how to depend on government handouts. I'm not going to say it's easy getting out of the ghetto. My father, and many of his friends, managed to do it, but many of his friends are also dead or in jail. The statistics are probably against you. The point is that the opportunity is there. There are vocational school and community colleges that anybody can afford to go to, that are easy to get aid for if you're poor, that can help you get into the middle class. My father simply took an apprenticeship as a plumber when he was 20. Now he's making close to$70K a year. That's what I meant about making a plan and sticking to it. You don't need to come from any particular priviledge to learn a trade and make a living for yourself. You just have to be patient and willing to learn. Many people aren't. They'd rather rely on handouts and turn to crime when they end up with no better options. Is this capitalism's fault? Heck no. The jobs are available if you're willing to take the time to acquire the skills necessary for them. The problem is that people don't want to take this time; they don't want to discipline themselves and stick it out when the going gets rough. They just want things handed to them for free.

Capitalism never had respect for the workers. In capitalism, people gather their wealth by exploiting the workers. A worker is not paid the entire produce of his labor, as the employer retains a portion as profit. Profiting in this way tends to further enrich those with capital while not significantly enhancing the material well-being of workers. This perpetuates concentration of wealth in the hands of a few.

X-43D said:
Capitalism never had respect for the workers. In capitalism, people gather their wealth by exploiting the workers. A worker is not paid the entire produce of his labor, as the employer retains a portion as profit. Profiting in this way tends to further enrich those with capital while not significantly enhancing the material well-being of workers. This perpetuates concentration of wealth in the hands of a few.
The worker will never be paid the entire produce of his labor - it is hard to understand why that would not be the case. Otherwise, what is in it for those who took the risk of investing in the business?

I have a friend who went to work for AOL in 1994. AOL has always given stock options to all of their employees, from the high-end engineers to the low-end mailroom people. My friend was a lowly www administrator making \$30k/yr. By 2000 his options were fully vested and he is now a multi-millionaire. The same is true of any other AOL employees who got in on the ground floor <1996 and stayed for at least 4 years to fully vest their shares.

Literally thousands of workers became millionaires.

But in your eyes, they are only being exploited because they probably produced hundreds of millions?