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Causes of wealth inequality in america
Causes of wealth inequality in america
Causes of wealth inequality in america
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According to the Top 200, an Institute for Policy Studies, of the 100 largest economies in the world, 51 are corporations; only 49 are countries. General Motors is bigger than Denmark and over three times the size of New Zealand; the top 200 corporations’ combined sales are bigger than the combined economies of all countries except the largest ten. “It is size with the protection afforded by company law and governments that gives corporations power to make the rules and encourages their arrogance” (Madeley). Globalization presently is dominated by corporations that have too much freedom without any repercussions to their actions. Corporations are able to increase their wealth as well as political and economic power through freedoms above that of individuals. Governments around the world are to blame for letting these corporations "exploit" the system and financial deregulation has only furthered this problem.
Governments have presented cutbacks in health, education and other vital social services around the world as a result to structural adjustment policies prescribed by the International Monetary Fund (an organization that supposedly works to foster global growth and economic stability) and the World Bank as conditions for loans and repayment (Stiglitz). In other words the government depletes the money used in communities to in essence “bail” out and support large corporations in trouble. It is becoming a major concern of why businesses are receiving more support from the government than individuals do. In addition, it is vital for emerging nations to open their economies to compete with each other and with more powerful and established industrialized nations. These developing nations are constantly competing to see ...
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...eignty; in addition, to having no repercussions with regards to their actions. Corporations will carry on dominating as well as soar in size. Large businesses will maintain relations with government officials causing our economy and societies to be exhausted of its wealth. This is why abolishing particular laws following corporate personhood are vital to ending corporate rule and building a better democratic society. Starting local is key. Addressing governments and asserting the problems with corporate rights is how success can be reached. We must make government and the courts familiar with the ideas and help them reach a better understanding of why the removal of these rights is in the best interest of the people. “Ending corporate personhood would result, not in a level playing field, but in a field where We the People have the advantage again” (Meyers).
In a capitalist system, businesses compete with one another to produce the most innovative merchandise at the most competitive prices; in turn, consumers freely select the most desirable products. According to Adam Smith, this competition, when left unregulated, fosters maximum wealth and the common good (Economist 2-3). Indeed, unmanaged competition may ensure prices are affordable for consumers (2). However, in a global free market that exploits cheap labour; market demand dwindles, resulting in excessive credit lending and debt crises (Li 295-6). In this way, capitalism’s efficiency and promotion of the common good is questionable.
Democratic ideologies in the United States provide the basis for both the limitations and boundaries given to each individual living in the country. However, the term individual is very tricky in a society that promotes democratic ideals but functions by capitalistic principles. This imbalance is seen throughout society but remains highly prevalent in lower economic classes in the country. The core values of Capitalism are not incorrect; however, when intertwined with American core values – democracy, equal opportunities, and pursuit of happiness – they cause conflict and damage the lives of certain individuals. Low-wage workers are often victims of this disparity and find themselves working for their employers without enough compensation
The Aristotelian view of democracy showed democracy as a supreme state of being, promoting equality more than anything. It allowed every person to have as much say in a government as any other person, and yet still allowed individuality to reign. To follow this path of "true" democracy is to follow the path to a perfect country. Yet America, which prides itself on being a truly democratic nation, is filled with corruption and extortion, nothing like the Utopia Aristotle portrayed.
At first glance, it seems implausible the word democracy isn't written in the United States Constitution, or in the Preamble of the Constitution, or even in the Declaration of Independence. One would assume a concept so paramount to modern American culture would surely be derived from one of its oldest and most endeared documents. Alas, it is not. The Constitution only specifically mentions two entities, the government and “We the People”. Defining government is an easy enough task, but who are “We the People”? Originally consisting of only white male property owners, eventually adding in other races, income classes, women, and astonishingly, corporations, the definition of “We the People” has evolved numerous times. Corporation is another key term the architects of our government failed to define for us, perhaps that is why it found its way into the phrase “We the People”. A grave dilemma lies in this fallible defining of terms. Granting corporations person-hood legislatively shifts the power of democracy from human interests to corporate interests. This corrosion of human interest can clearly be noted when examining the battle over corporate power highlighted in the court cases of Sebelius v. Hobby Lobby, Citizens United v. Federal Election Commission, and United States v. Sourapas and Crest Beverage Company.
The world we live in today is going through enormous changes in economics, technology, culture, politics, etc. The effects of the changes are not so clear, since it is hard to predict how each sector would affect the other and how society will be affected. However, analyzing past and present occurrences provides some information for experts to interpret society’s reaction in the future to different transformations. Globalization can be seen as a process in which societies around the world come together and expand through the combination of different forces. This paper will explore the effects of globalization on US companies, US society and economy, and the implications for other countries in the post-industrial world.
Economic freedom allows economic globalization to spread throughout the globe. The “government [had] been an important factor of globalization” (Issit 1), but today we live in a free market, it “allows producers and consumers to have economic decision making rather the government.” (Gerdes 50). As consumers want certain products, companies can expand to other countries allowing for the spread of economic globalization.
Due to the phenomenon of globalization, a substantial part of manufacturing has been moved overseas and goods are constantly being shipped all over the world. These processes are contributing to the advancement of international trade and economic improvement of many lesser developed countries. Unfortunately, globalization has also led to a significant growth of worldwide inequality. While the Western world has largely benefited from the changes, many countries in the developing world are facing great troubles adjusting to the new reality of global interconnectedness. Economic constrictions, unemployment, the weakening of government, corruption, and military conflicts are pushing people to leave their homes and seek better lives elsewhere.
Overall, many people believe that economic globalization does a great job of enhancing our economy and our quality of life. Source: This is an excerpt from the book “Transnational Corporations: Knitting the World Together”. This book was published in 2004 and the author is Keith Suter, a futurist. He believes that transnational corporations are now the main global economic force as they erode the national market. He deems that due to transnational companies, the world is now involved in one global market.
A competitive market makes a country stronger but without regulation it can threaten the country’s democracy. The President criticized the large corporations for “keeping prices artificially high and failing to increase workers’ purchasing power”(Liberty 863). Franklin D Roosevelt realized large corporations who gained monopolies were gaining immense influence on matter’s concerning government and the daily lives of American citizens. The first New Deal reforms were introduced, not to dismantle large industries but to control them in such a manner that they could never challenge the democratic government. Large corporations took advantage of the liberty given to them prior to the crash by exploiting the profits in payoffs or bribes. The businesses gained influence in government by funding election campaigns of tainted politicians who would in return be blinded of the corruption spread by the untouchable corporations to expand their profit margins.
This particular statute allows for corporations and such to obtain several, but not all, constitutional rights as any person or persons. In particularly own property, sue and be sued under criminal and civil law, enter contests. Moreover, because corporations and such are considerate as “person”, business has the legal rights for its debts and damages. On the contrary, persons who are employed by a particular association are liable for their own misconduct and law-breaking while acting on behalf of a corporation. In addition, corporation has rights for its own actions, has rights such as: limited free speech and to advertise their product ("The Rights of Corporations," 2009). Likewise, businesses have the responsibility to elect a CEO, provide continuity; increase profits, social responsibilities, and manages recourses effectively (“Functions & Responsibilities of a Corporation").
“…increasing international trade and financial flows since the Second World War have fostered sustained economic growth over the long term in the world’s high-income states. Some with idle incomes have prospered as well, but low-income economies generally have not made significant gains. The growing world economy has not produced balanced, healthy economic growth in the poorer states. Instead, the cycle of underdevelopment more aptly describes their plight. In the context of weak economies, the negative effects of international trade and foreign investments have been devastating. Issues of trade and currency values preoccupy the economic policies of states with low-income economies even more than those with high incomes because the downturns are far more debilitating.1”
When the problem became serious two main views formed: the “narrow” view and the “broader” view, based on different ideas. The “narrow” view is based on the proposition that corporations have no social responsibility and they have only one main purpose, to make a profit (Friedman, 1970). So corporations should remain socially independent and all conflicts must be solved through the individual responsibility concept. On the contrary the “broader” view states that corporations have social obligations as all existing participants of market, persons and entities are tied together and are mutually dependent. So corporations cannot ignore some serious events or problems, which take place, and must help society, as profit is not their single purpose.
Globalization is a term that is difficult to define, as it covers many broad topics in the global arena. However, it can typically be attributed to the advancement of economic, social, and cultural interactions among the companies, citizens, organizations, and governments of nations; globalization also focuses on the interactions and integration of countries (The Levin Institute 2012). Many in the Western world promote globalization as a positive concept that allows growth and participation in a global community. Conversely, the negative aspects rarely receive the same level of attention. Globalization appears to be advantageous for the privileged few, but the benefits are unevenly distributed. For example, the three richest people in the world possess assets that exceed the Gross National Product of all of the least developed countries and their 600 million citizens combined (Shawki and D’Amato 2000). Although globalization can provide positive results to some, it can also be a high price to pay for others. Furthermore, for all of those who profit or advance from the actions related to globalization, there are countless others who endure severe adverse effects.
Globalization’s history is extremely diversified and began during the beginning of civilization. Now we live in a world that is constantly evolving, demanding people to use resources in locations that are very difficult to obtain certain resources. This could make it completely impossible to operate in these specific parts of the world. However, globalization allows people across the world to acquire much needed resources. Globalization creates the opportunity for businesses to take advantage and exploit the ability to take part of their business to a different country. Nevertheless, globalization is part of today’s society and will be involved in virtually all situations.
Brinkman, June E., and Richard L. Brinkman. "Corporate Power and the Globalization Process." International journal of social economics 29.9/10 (2002): 730-52. Print.