Inequality In A Free Market Economy Inequality in the United States is an apparent struggle for millions of citizens, regarding the distribution of wealth. Economists debate over this issue every year. What is the solution to inequality and what are its fundamental roots? Thinkers such as Milton Friedman, Coates, and Dr. Kevin Murphy have various prescriptions for inequality. Coates opposes the idea that a free market economy, if left alone, can balance or reduce inequality. Coates sees the current state of the market to be pro white, and sees institutional racism as a platform to promote inequality between minorities and whites. Therefore, a free market without some control would only help marginalize races rather than include minorities as beneficiaries of the economy. On the other hand, Friedman and Dr. Murphy strongly advise government to leave the market to run itself, and in return the market will reach equilibrium in the long run. They give a couple different prescriptions for solving some inherent inequalities in abilities, inherited wealth, and the lottery system. …show more content…
So the goal isn't to eliminate inequality; the goal is to give every citizen the right to opportunity, while pushing low unemployment and stabilize inflation. Only in capitalist societies do we see the poor living proportionally better than then the poor in places with non capitalistic economies. In the long run, I believe in the free market has the ability to lift people from poverty with minimum government intervention. However, there will always be some need for intervention whether to provide services that the market will not provide, or create institutions to check the power of
Both Sklar and the Economist offer suggestions to improve the inequality in America, but unfortunately the inequality continues to grow. Sklar’s use of detailed facts about the richest Americans, the poorest Americans and her discussion of the impact on society add clarity to the Economist’s argument that the American dream is broken due to the inequality in America. Until the American government starts to make changes, the problem of inequality will continue to grow.
The film “Inequality for all” directed by Jacob Kornbluth, begins with Robert Reich asking students three questions to consider in a lecture when talking about the uneven distribution of wealth. First, what is happening regarding the distribution of wealth? He then inquires to why this is happening. Last of all, he asks the students if the distribution of wealth is a problem in America. He addresses these questions as well as many others in his lecture on the growing divide between America’s rich and poor. Robert Reich is an economist, author, and educator as well as public policy professor who served in the Ford, Carter and Clinton administration. He has dealt with this particular topic for over three decades and continues to spread his political views as a professor at the University of Berkley. Furthermore, he talks about the widening gap between the wealthy and the poor/middle class. He goes beyond the obvious facts to show us why this is happening and uses statistical data to display this growing problem. He gives concerning evidence that wages are declining, and that America’s weakening economy is based on consumerism.
Krugman challenges us to think about one question, “Why should we care about high and rising inequality?” (Krugman, 586) Some of the reasons inequality is a problem is the standards of living and the lack of progress in the economy for the middle and lower class families (Krugman, 586). These show that the distribution of wealth in the United States is not equal at all. There is also the damage that the inequality does to the society and the government. Thomas Jefferson once said, “The small landholders are the most precious part of a state.” Today that would mean that the middle class is the most important part of our society, however, the farther we move into the future the weaker the middle class becomes (Krugman, 587). The America that we live in is both unequal in income and social aspects. The rich do not live the same lives as those that are less fortunate and the less fortunate do not get to enjoy the perks that come with lives of the rich people. The inequality does not mean that it is unfair that the majority of the population
Prak, K, B, & Schuette, S. (2007). Gender and Women in politics in Cambodia. Henrich Boll
Every society forms different cultures and social norms how people behave and constructs stereotypes and expectations of people based on how they were seen throughout history and cultural backgrounds. Once set, norms are unlikely to be changed over time. This social construction decides which group will have benefits and privileges and which won’t. One example of these social constructed norms is gender. Gender, regardless of how different cultures define it, is generally and mostly made up of masculinity, femininity.
Income inequality not only harms us fiscally, but also affects our mental and physical wellbeing; therefore, it is important to identify the right ways to control wealth distribution among people.
With these information about wealth and history, it is concluded that one of four races considered nonwhite have one chance of growing in their economy. The racial wealth gap can take people back in time to see how the economy of the nation was created. There is no fairness in base of the economy. If each one of the citizens in the coutry are considered equal under the law, why can’t it be the same in the economy? Segregation and discrimination continue to exist in the nation. Whites are not considered equal as nonwhites. In conclusion, if this gap between the races perdures to be open there will never be true equality and justice.
Inequality exist and is high in America because the amount of income and wealth that is distributed through power. In America the income distribution is very inequality and the value of a person wealth is based on their income with their debts subtracted. “As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers)” (Domhoff, 2011). In contrary the poor do not get ahead and the rich get more. Americans are judged and placed in class categories through their home ownership which translates to wealth. Americans social class is often associated with their assets and wealth. “People seek to own property, to have high incomes, to have interesting and safe jobs, to enjoy the finest in travel and leisure, and to live long and healthy lives” (Domhoff, 2011). Power indicates how these “values” are not distributed equally in American society. Huge gains for the rich include cuts in capital gains and dividends and when tax rates decrease for the tiny percent of Americans income is redistributed. Taxes directly affect the wealth and income of Americans every year.
Income inequality has affected American citizens ever since the American Dream came to existence. The American Dream is centered around the concept of working hard and earning enough money to support a family, own a home, send children to college, and invest for retirement. Economic gains in income are one of the only possible ways to achieve enough wealth to fulfill the dream. Unfortunately, many people cannot achieve this dream due to low income. Income inequality refers to the uneven distribution of income and wealth between the social classes of American citizens. The United States has often experienced a rise in inequality as the rich become richer and the poor become poorer, increasing the unstable gap between the two classes. The income gap in America has been increasing steadily since the late 1970’s, and has now reached historic highs not seen since the 1920’s (Desilver). UC Berkeley economics professor, Emmanuel Saez conducted extensive research on past and present income inequality statistics and published them in his report “Striking it Richer.” Saez claims that changes in technology, tax policies, labor unions, corporate benefits, and social norms have caused income inequality. He stands to advocate a change in American economic policies that will help close this inequality gap and considers institutional and tax reforms that should be developed to counter it. Although Saez’s provides legitimate causes of income inequality, I highly disagree with the thought of making changes to end income inequality. In any diverse economic environment, income inequality will exist due to the rise of some economically successful people and the further development of factors that push people into poverty. I believe income inequality e...
I believe that both arguments 1 and 2 were very strong and it was difficult to choose between these two. The third argument made some good points as well, I believe that wealth inequality isn’t necessarily politically significant and that the free market benefits the whole of society. The problem with argument three is that I’m not entirely certain what they are arguing (and I also had a little difficulty reading the handwriting at points). It seemed that argument three’s argument was that the Government needs to intervene to prevent inequality, but the market provides the maximum benefit to all in society and if the government intervenes the free market will not be able to efficiently maximize economic growth which is bad for
Poverty is everywhere and no matter how hard our government tries to eliminate it, it simply cannot. To do so it must first reformat itself so that it may do its job in a more efficient manner, thus helping all aspects of life. Converting our current system into a capitalistic government would in fact help alleviate the current situation. Contrary to widely held beliefs, capitalism is not a system which exploits a large portion of society for the sake of a small minority. Capitalism is an economic system characterized by the freedom of the market with increasing concentration of the private and corporate ownership of production and distribution means.
“If the rights and perquisites of different positions in a society must be unequal, then the society must be stratified, because that is precisely what stratification means” (pg. 243 Davis and Moore). The harsh reality that now twenty-five percent of the nations income and forty percent of the nations wealth is solely occupied by 1% of the population truly demonstrates stratification our society. Wealth is the total value of all assets and income is received on a regular basis. The fact that almost half of the nations wealth is occupied by only one percent of the population is mind-bogging. One may be wondering how such trends occur and according to Davis and Moore this is a result of social stratification.
Market economies, as a whole, inherently and inevitably lead to poverty and a large class disparity. In a capitalist society, the ones who supply labor, the ones who work the hardest, are the ones who are paid the least. The owners, who are already rich, receive most of the profit and accumulate large masses of wealth. “Under capitalism workers receive only a small fraction of the wealth that they alone produce, while the lion’s share goes to the capitalist owners and to the bankers, landlords, insurance companies, lawyers, politicians, and all the other parasites who live off the back of labor and perform no useful work.” (SLP). Thus laborers are paid much less than the value of the labor that they contribute. As Karl Marx said, this is stealing, or exploitation of labor. The wages for...
Income inequality continues to increase in today’s world, especially in the United States. Income inequality means the unequal distribution between individuals’ assets, wealth, or income. In the Twilight of the Elites, Christopher Hayes, a liberal journalist, states the inequality gap between the rich and the poor are increasing widening, and there need to have things done - tax the rich, provide better education - in order to shortening the inequality gap. America is a meritocratic country, which means that everybody has equal opportunity to be successful regardless of their class privileges or wealth. However, equality of opportunity does not equal equality of outcomes. People are having more opportunities to find a better job, but their incomes are a lot less compared to the top ten percent rich people. In this way, the poor people will never climb up the ladder to high status and become millionaires. Therefore, the government needs to increase all the tax rates on rich people in order to reduce income inequality.
This nation has a problem: more of its citizens rely on the federal government for help than to support themselves with a full time job. Poverty has many negative effects on the people who suffer from it and on the economy. Everyone needs to be made aware of poverty and the many negative effects it has on people. There are things that could be done to help reduce the amount of people that are in poverty. Reducing poverty would decrease health risks, strengthen the middle class, and help the democracy.