Income Inequality Essay

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Over the past few decades, factors such as globalization, de-regulation, credentialism, and technological progress have brought momentous transformations to the economies of the world. Wealth imbalance between countries has contracted, while income inequality within countries has expanded. The demand for highly skilled workers has increased, and so have the salaries for the most successful individuals in society. Less educated people, however, have fared relatively worse. This is quickly attracting the attention of governments of many countries, including Canada.
The radical leftists are quick to deem this gap a malevolent injustice and have vowed to eliminate it. But is wealth inequality something that we should trust the government to eradicate? Even further, is wealth inequality itself something we want to eradicate? What people need to understand more than ever, is that income inequality is inevitable in a capitalistic free market. Income inequality is not a cause of social unrest, nor a dictation of disproportional living standards, but a positive reflection of a functioning economy, and a powerful instrument in increasing productivity and prosperity. The government has repeatedly proven itself incapable of making effective policies when it comes to running the economy, and when it comes to income inequality, the government should have absolutely no involvement whatsoever.
Since most of us are accustomed to the democratic concept of equality, it is common to relate income inequality to social inequality. To truly comprehend the issue of income inequality, one must first objectively separate the two ideas. A capitalistic democracy is a double-standard system (Okun). Such a system pursues an egalitarian political and social ...

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...a market economy. This however, has been proven ineffective in countries such as Venezuela, which has ended most foreign trade and investment and built a state-owned economy. (Saunders) The gap between the rich and the poor only increased more, and the living conditions of the poor have deteriorated severely due to the significant inflation in prices. Attempts at the other extreme have been futile as well. Colombia, operating under a very free-market, right-wing government, has seen its GC rise to 0.56 and its poverty rate soaring as high as 45.5% (IMF).
The happy middle is perhaps, capitalism, in which income inequality will always exist. The best solution is to leave the economy alone and let it run its own course. Without government intervention, the free market will eventually create prosperity and fortune for everyone—although that fortune may not be equal.

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