Capitalism - For the greedy or the worthy?

Capitalism - For the greedy or the worthy?

“The question is which system has the greatest chance for enabling poor people to improve their lives?” Milton Freedman says, “And on that, the evidence of history speaks with a single voice. The freer the system the better off the ordinary poor people have been.” Is that really true, though? In many ways, yes. The economy grows and inflation declines. Countries become richer, economic successes. From the outside capitalistic societies look like miracles at work. Harmonious sequences of independent free thinkers creating opportunities and profiting from them in a scalable fashion. Yet, if you dive deeper, the reality is jarring. For the average person, day to day harsh realities of life are overshadowed by the economic progress seen in the dollar signs. Much of the economic gains accrue to the rich and not the middle- and lower-class participants. As a result, many were not seeing their lives improve.

When you remove the social safety nets, does that improve prosperity through free market?
The western world has touted that Capitalism provides the best opportunity for the poor to reach economic freedom. Many citizens are fed the notion that by removing restraints on the free market, they will get the full benefits of the free market. Less regulations means more money for the people. The reality is that removing those restraints ends up making it harder for people to improve their lives because it takes time for the free market to give returns on investments. Many will go years before they can cash in on their pensions and benefits of privatized infrastructure. Often many see in America and Chile that those who pay into their retirement plans over decades find themselves with returns that are less than the threshold for living in poverty. This affects everyone in the middle and lower class.

Who is affected because of this? Well marginalized communities of course. These guard rails are in place to benefit everyone and minimize the effects of greed and corruption. They act as an accountability system to make sure that organizations don’t try to take advantage of the system to cut expenses and line their pockets with the savings. When that accountability is gone, what is left to balance the power structure?

For more reading go to:

No comments:

Post a Comment