CAPITALISM

Capitalism Generates Enormous Wealth Only For Small Elite

Capitalism Generates Enormous Wealth Only For Small Elite

Introduction

Capitalism is a particular mode of production based on the market. Capitalism is a necessary but not sufficient. Capitalism is rather an economic system in which the production of goods and services is carried out by private enterprises for the most part. They exchange their products on the basis of a system of prices in the currencies that are formed freely on the market. Therefore, "only in the capitalist mode of production the market is at the center of economic life, in which they are governed solely by the law of supply and demand. These factors are used in the production, including the workforce, are paid in cash, and that, in exchange for goods and services only currency is accepted, which is essential to the functioning of the capitalist economy because only through it is possible to calculate rational costs and revenues (Solt, 2008, pp. 48-60).

For the capitalism it has been argued that this economic system is beneficial for elite class of the state. This system widens the gaps between rich and poor and hence the Gini coefficient is increased. In this paper we will discuss the argument and study the facts in favor of the argument that capitalism is the source of benefits for elites only and it increases the gap between rich and poor.

Discussion

Communist economy has lost the conflicting ideologies. All the conflicts have been observed in Capitalism. While the whole world is going through recession, the investment banks are reaping the benefits to continue the payment of immense bonuses, in spite of being bailed few times earlier. While the payment of worker is reduced the topmost management gets more perks and share options. Capitalism has led to an ever growing gap between poor and rich (Thompson, 2012, pp. 103- 105).

For example, when we talk about the capitalist economy, on one hand, the economy of United States sees growing social inequalities in the same way and a frightening gap between rich and poor that generates a multiplication of popular revolts against poverty and government policy. The country's wealth is in the hands of a few privileged capitalists and senior public officials who run the state-owned companies, monopolies in many areas, while increasing the number of people forced into poverty. A recent survey estimated that in 2010, more than half of total revenues, 51.9% is the prerogative of only 10% of Chinese. The revenues of the Chinese capitalists have increased as they collapsed the purchasing power of workers' wages in the face of inflation that drives up food prices continuously and other essential items. The survey estimated that workers' salaries were equal to 53.3% of gross domestic product in 1990, dropped to 39.7% in 2007. On the other hand, growth of the gap between rich and poor is one of the issues that bounces on the tables of Beijing regime, worried by the strikes of workers and the multiplication of popular uprisings (Birchfield, 2012, ...