Is Capitalism Good For The Poor? Essay

Is Capitalism Good For The Poor? Essay

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This paper sets out to answer the question, “Is Capitalism Good for the Poor?” The answer—yes or no—depends on the particular features of a nation’s institutions and how we measure and perceive poverty. Poverty, capitalism, economic growth, income distribution, markets, property rights, and rule of law are among the many topics addressed. Despite various impediments to positive institutional change in many nations, heightened competition spurred by the information revolution and the spread of political and economic participation worldwide through the usage of globalization has benefit people previously cut off from the path of success due to poverty. In this regard, it is important to emphasize that economic growth, where it has taken hold, has benefited all layers of society. As Ayn Rand observed, “Capitalism did not create poverty—it inherited it.” To be sure, life during the early days of capitalism was hard (as life had always been), but for anyone willing and able to work, life was better than it had ever been—and even today, is getting better.

Keywords: Absolute Poverty, Capitalism, Economic Growth
Defining Capitalism
The prevailing image of a “capitalist” may be an American businessman, but a survey of the world’s economies reveals that, like poverty, capitalism has many faces. To begin a systematic analysis of whether capitalism is good for the poor requires a working agreement on just exactly what capitalism is. Merriam-Webster defines capitalism as an economic and political system in which a country 's trade and industry are controlled by private owners for profit, rather than by the state. For the most part, capitalism can be viewed as complex system based on inequality and monopoly. It may be beneficial due to the ...

... middle of paper ... While it would be a mistake to suggest that the task is less than daunting, it is nonetheless true that adopting policies and practices that foster the introduction and strengthening of capitalist institutions – the rule of law, competitive markets, property rights, and incentives for entrepreneurship and innovation – hold the greatest hope for improving the lot of the world’s impoverished millions.
When examining the question, “Is Capitalism good for the Poor?” the evidence presented makes a strong case for answering “Yes”, and is in fact the best option at reducing poverty. Capitalist economies with high levels of market competition are those with the best record of reducing poverty and elevating overall standards of living. Capitalism only fails to benefit the poor when it is combined with a political system based on corrupt, incompetent or autocratic rule.

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