Capitalism generates income and wealth more efficiently than any economic system before its arrival. However. it doesn't seem to do an equitable job of distributing the spoils:
What changes do you believe capitalism could make to change its natural tendency of concentrating wealth in fewer and fewer hands with each passing generation?
One chart that shows how much worse income inequality is in America than Europe
"One chart that shows how much worse income inequality is in America than Europe
The income share of the poorest half of Americans is declining while the richest have grabbed more. In Europe, it’s not happening.
By
Emily Stewart Jul 29, 2018, 11:43am EDT"
No system does, it’s called the Pareto distribution, and it’s universal. Not just in human economics but also other things like human productivity (e.g. a small number of workers do 90% of the work), music production, scientific papers, etc. It’s also universal in nature, (e.g. a small portion of celestial bodies have 90% of the mass). You want the system that does it the best, and a system that fairly rewards the most productive, so they can continue to be productive. Now if someone is getting rich by providing a service or product at a price people are willing to pay, and doing so without cheating or gaming the system...what is wrong with that? You seem to have a problem with the fact that there are super rich people out there. In the past those people were just the ones in power. Now it’s mainly the people making lives better humanity somehow.
Another factor you may be overlooking is that in America, ones level of wealth is rarely static. You can look at a screen shot stat showing the haves and the have nots, but it isn’t the full story. Some 70% of Americans wind up in the top 10% at some point in their life (if I remember correctly). Sounds like a damn good system of distribution to me despite that stubborn Pareto distribution.
No system does, it’s called the Pareto distribution, and it’s universal. Not just in human economics but also other things like human productivity (e.g. a small number of workers do 90% of the work), music production, scientific papers, etc. It’s also universal in nature, (e.g. a small portion of celestial bodies have 90% of the mass). You want the system that does it the best, and a system that fairly rewards the most productive, so they can continue to be productive
Vilfredo Pareto revolutionized the study of economics and income distribution.
Vilfredo Pareto - Wikipedia
"He introduced the concept of
Pareto efficiency and helped develop the field of
microeconomics. He was also the first to discover that
income follows a
Pareto distribution, which is a
power law probability distribution.
"The
Pareto principle was named after him, and it was built on observations of his such as that 80% of the land in Italy was owned by about 20% of the population."
It seems to me like the richest 20% of Italians relied on "cheating or gaming the system" (if not worse) in order to amass their wealth?
Extending this principle to its logical end, you end up with the richest one percent owning most of the wealth, which seems inconsistent with a democratic/republic form of government.
But it’s not just power that determines wealth in capitalism. Power has little to do with wealth if the more economic freedom a nation has, it becomes more about merit. This is because capitalism is a system that rewards service to humanity at a price they are willing to pay. And in a healthy free market, old money doesn’t last all that long, 3 generations. That may sound long, but again someone was so successful at providing something to the masses that they were able to take care of their grandkids with the money. People who have a problem with that are the same who’d trade places with that person in a heartbeat. It’s one of the strongest natural instincts to provide for the coming generations.
There are those who get to the top and want to pull the ladder up from below them, and yes this needs to be guarded against. The best way for one to pull the ladder up is to get government to change the rules in your favor (which decreases market freedom). In a healthy free market (one that says away from cementing into place the powers that be) the big fall all the time, in fact it’s a necessity. Unless they adapt well to the changing landscape, which is rare.
Economic freedom gives the citizens more freedom overall since they can vote with their dollars what works for them, and have a wide array of options. For socialism to work, one needs to build a government with a lot of power. The more power they have, the more choices they are making on the behalf of the citizens. When government builds that sword to reign in the markets, citizens need to be wary of who wields the sword. Take Venezuela for example. Let’s pretend Chavez was a true believer and competent practitioner of socialism. The very next guy, Maduro, grabbed a hold of that sword and brutally turned it against the citizens. Even if (this is a huge if) the government was created and implemented with the best of intentions in a competent manner, it then becomes a powerful and tempting tool for the next guy. Operating in a competent manner is also a big if, since the only ideas for implementation are going to come from a small group of people, with their own agendas. And once a “solution” is implemented, it’s basically the only available to the citizens. What happens if that solution doesn’t work well? The answer isn’t usually go back to the drawing board, it’s throw more money at it. What happens if that solution doesn’t work for some a minority of citizens, but still works for the majority? Sorry minority, you’re SOL. With socialism, no matter what, you’re creating a false restriction of resources since the government only has a limited amount of resources, what it gathers in taxes. Socialism is a rigid, less adaptive, and dangerous system in the wrong hands. At the very best, it’s utilitarian, only if every thing is going right.
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