Inequality Essay

If you took a snapshot of free market capitalism, you would notice inequality everywhere. You see some people exiting their lavish homes in finely pressed suits driving their sleek new cars to a comfy desk chair where they sit typing away at a computer for most of the day. Then, they return to their homes. Dinner is ready. It’s filet mignon. The TV is running their favorite sports program. Life is good. Then you look at a different part of the snapshot. You see someone rolling out of their cot at 5am so they can take a bus to their 14 hour factory shift. They spend the whole day doing physical labor. They return to their single room home to no dinner on the table, no TV running, and four malnourished kids sitting on the floor. It is easy to criticize a free market economy by only looking at a snapshot.

Some people today only see capitalism as a snapshot. An article from inequality.org argues that “those with extreme wealth have often accumulated their fortunes on the backs of people around the world who work for poor wages and under dangerous conditions.” However, those who work for poor wages are actively choosing to work under such conditions. They could choose to be completely self sufficient and cultivate the land for themselves, but they don’t. Oftentimes, people use comparisons to make assertions about what “poor wages” actually mean. A factory worker in a foreign country who is making less than half the hourly minimum wage in America is still making enough to sustain themselves. Because people often rely on comparisons to make judgements, there is a growing sentiment that the richest people in the world are hoarding their wealth away from everybody else. In an NPR interview, Richard Reeves addresses the growing divide between the upper middle class and the rest of America. According to Reeves, people in the upper middle class “are increasingly separate - occupationally, residentially, educationally, and economically - from the rest of society.” And that is not the most extreme case. The graph below shows how the richest 1% own 44% of the world’s wealth, while over half the world’s population owns less than 10% of global wealth. Many people view contrast between wealth and poverty as exclusively negative, which supports the sentiment that the wealthiest people are also the cruelest. However, if people look at free market capitalism as more than just a snapshot they may change their minds.

Ironically, the people who say they are against free market capitalism also directly benefit from it. George Will, a proponent of free market capitalism, argues that income inequality “provides the incentive for creative people to gamble on new ideas, and it turns luxuries into common goods.” If large corporations did not cut expenses by outsourcing to foreign countries, the cost of producing goods domestically would be a lot higher causing product prices to increase. This means the price of a new laptop could be in the same price range as an old car. As a result, the writers and editors of inequality.org may find it increasingly difficult to express their ideas to the public if they cannot afford the means to do so. Ultimately, paying foreign workers “poor wages” is what allows for cheaper, better products for more people. Sometimes it is important to look at issues through more than just a snapshot in order to understand why they existed in the first place.