Why is wealth accumulation so unfair under capitalism?
9 Answers ]https://www.quora.com/Why-is-wealth-accumulation-so-unfair-under-capitalism
Selected answers -
Tim Worstall, former Journalist
Answered Jul 6 · Upvoted by Franklin Parker, works with very wealthy families
It isn’t. What near everyone fails to grasp is that it is the consumer who gets most of the wealth produced. Try this paper:
Schumpeterian Profits in the American Economy: Theory and Measurement
The entrepreneur gets to keep some 3% or so of the total wealth produced by their innovation. Near all of the rest goes to consumers as the consumer surplus.
Or this from Jason Furman:
mackinac.org
Sure, the Walton family have $100 billion or so. That’s the capital sum, the once off amount. Consumers save $260 billion a year from the existence of Walmart. Over 30 years, a reasonable time to think of, the Walton’s have $100 billion, the rest of us near $8 trillion.
Can’t see that as being unfair myself, in fact I think it’s an absolute bargain for us.
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Ed Frey
Answered Jun 28
That doesn’t feel like the right way to ask the question. Under democratic capitalism, opportunity to accumulate wealth is very fair. Unlike other economic systems, everyone gets that opportunity. If you try, you will have the opportunity to improve your economic situation and accumulate wealth.
Some people have been blessed with gifts to make money better than others. These gifts include initiative, determination, ability to motivate others, willingness to take risks, willingness to save, etc. It may look easier for these people, but to succeed they still have to try.
Starting with money is no guarantee of continuing success. Wealthy children struggle. How many stories can you recollect of family fortunes being lost by the second or third generations?
Some people are just struggling now and will do better in the future, because they take advantage of opportunity. Classic American immigrants (and our current illegal immigrants) fit this case. They work hard, scrimp and save, send their children to college and their children/families succeed. This is a good measure of wealth. The founders of Uber shared rooms, lived on ramen noodles, scrimped. They are doing much better now.
Others struggle because they don’t try to overcome their current situation. Many are convinced that they can’t, so they give up and hope someone will take care of them. Our current political and social narrative supports this perspective, so it’s easy to believe it.
If I could change one thing in America today, I would bring back the hope and belief of the time exemplified in Horatio Alger stories. At this time in American history, everyone had hope of succeeding by their own efforts and didn’t expect others to take care of them.
…and they succeeded. The American Century was the product of a lot of people trying to do better for themselves,, and it worked.
So the opportunity to accumulate wealth in a capitalistic economy is not unfair. The fact that some people see better results than others is not unfair, it’s just life.
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Robert Collier, OPS Manager of 120ppl, Real Estate and Stock Investor, Broker Retired at 45
Answered Jun 28
I would argue it is the fairest system ever devised. Fact statistics state that over 80% of the millionaires and billionaires in the US are first generation. For every hard luck story out there, there’s a story of someone dealt a more difficult hand and won with it…only in a system such as this can it happen.
If what you stated were true then you could give all the poor all the wealth of the rich and it would stick as a 180degree turn of fortune. We all know that the situation would turn back to the original fortune makers for it is the decisions of the person that makes the difference.
It is why lotto winners and young sports stars are soon broke while entrepreneurs and business owner’s that maxed out credit cards and worked ungodly hours to get where they are today could do it again.
There are only 4 things that a person needs to do to have a 95% certainty of staying out of poverty and those are - don’t get addicted to a substance, do get a High School level education, don’t have children out of wedlock and do get a job.
I know from which I speak intimately as I am from a single mother scenario who could not afford my college (not that I had good enough grades anyway)and we at a whole lot of tv dinners. I started out bussing tables and just had my foot to the floor ever since. The person in the mirror every morning was held accountable for all my successes and failures with no other excuse. I work now out of habit and enjoyment but if it were all gone tomorrow I could do it again. No other system anywhere can you say that about…good luck
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Rusty Pang
Answered Jun 29
Your question assumes two faulty premises:
Wealth accumulation is only unfair in capitalism societies.There is an economic model that is fair to compare to.Let me tackle these two in order.
Capitalism is an economic model of free exchange. Meaning, in capitalism there is no third party influencing or restricting the exchange. In this model it is impossible for it ever to not be fair for each person only completes the exchange when they are better off for doing so. The employee commits his labor because he values the values the employer’s money over his labor. The employer values the labor over his money. So long as employment is voluntary, it is always fair.
Some may say that minimum wage is too little for the employee’s labor and the employer is taking advantage of the employer. This can never be so because the employer can choose to quit and work for someone else. No one is forcing that person to work for the company.
The second assumption you made is that there is a better model we can use as a standard to judge capitalism by. Show me the evidence of any economic model that has proven induced more wealth for a society than a capitalistic one. World history is filled with many more examples (feudalism, socialism, caste, etc). None of these have produced the upward mobility we have seen in our economic model.
30 years ago, we were using AOL dial-up and blown away by 56.6 kbs download speeds. Today, we have the entire world accessible from our fingertips.
50 years ago, we marveled about advanced refrigeration and color television. Today, we have higher resolution screens that, if not 4k, we consider old technology. I remember having to get up from my couch to change the station with a knob and there were only 4 channels.
America does not worry about famine. We probably induce more food today than ever in human history. So much food is produced here, that we export millions of tons of it to other nations. It’ascertainly not perfect, but we don’t really know starvation. We think we understand it, but no one in America is dying from starvation.
Capitalism is not unfair. In fact, it is as impartial as the waves of the sea. If one does not learn how to ride the wave and drowns, do we blame the wave?
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