Capitalism and Inequality-Free-Samples for Students-Myassignment

Question: Identify what you consider to be the most critical issue in world politics today and analyse it from one of the perspectives we have studied. Answer: The basic foundations lying beneath a capitalistic economy is private ownership with a free market open to new firms and scholars have argued that the rise of inequality is significant due to globalization which leads to a collapse and birth of a new hegemon (Amin 2014). However, one can trace the relationship between capitalism and inequality since the beginning of capitalisms advent in society. According to Karl Marx, in a capitalistic society, predominantly two classes exist- the bourgeois and proletariat and the relationship in between these two classes is inherently exploitative. The total amount of money that an employer pays to the worker is always less than the value that the goods are producing in the market (Clarke 2016). Therefore, the profit that one section of the society is earning is at the expense of the others systematic exploitation. Many theorists have therefore argued for other alternatives to a capitalistic society because capitalism is a hugely unsustainable sys tem of economy since it merely came into existence due to the shifting dynamics of the previous form of economy. It is argued that capitalism in the same way will cease to exist. However, there are some factors that are a result of the intricate operation of capitalism like technological bloom and advancement within the society. Today some of the leading countries like New Zealand, Japan, U.S, Costa Rica and Canada whose economy and organization resemble that of a capitalistic society (Clarke 2016). In a kaleidoscopic view, capitalism can be further segregated into state capitalism where in government has power over the economic system, mercantilism which is an old form of capitalism that permitted the growth of trade amidst different nations (Harris 2016). The other two famous forms of capitalism are democratic capitalism, prevalent in the American society which rose into prominence following World War II and social-market economy where the government intervention is almost prohibi ted and some instances are Western Europe and Japan. According to the Marxist perspective, in a capitalist society, the social institutions are controlled by those who are in power and they reign supreme in a manner as to keep the masses ignorant regarding their daily exploitation. One basic cause of inequality in a capitalistic society is the mass alienation that bourgeoisie class causes in between the proletariat and the means of production (Clarke 2016). The evolution of the capitalistic class is both a political and economic phenomenon, where power is enforced to operate. In a capitalistic society, inequality may appear through gaps and fissures and assume different forms and not necessarily only in the domain of social or political equality. The rich in a capitalistic society has more right to power, education and health care. The essay will argue how capitalism apart from being an indirect system of governance is a breeding ground for economic inequalities. Firstly this essay will discuss about the historical framework of capital ism, the growth and progress of capitalism, different phases of capitalist development and a brief discussion on the idea of inequality and the role of politics. Later on the essay will focus on the economic constraints imposed on a capitalistic society and study and evaluate a relevant case study to prove how capitalism gives rise to inequality in society. Historical Framework of Capitalism The term capitalism has its origin in the mid 1800s and in this context, Karl Marx who drew on Hegel for his theories on capitalism, is notably the most eminent socialist to have interrelated the term with the functioning of a market system that hugely favoured one class at the expense of society (Leone and Knauf 2015). It is true, that when Marx was writing about capitalism the markets were powerful enough to control thousands of individuals and their lives. The market was saturated with unequal accumulation of wealth and power, resulting in an acute polarisation of poverty and wealth. Marx has written in detail about the pangs of a capitalistic market where the workers were subjugated under unquestioning power. When Marx was writing, capitalism was affluent in Europe and United States (Fine 2016). The blooming of capitalist firms during Marxs era was rampant, later on during the onset of 19th century, Marxist ideas of capitalism sought to demolish the whole structure that suppresse s the poor and exercise utmost control over their lives, pushing the human labours into mechanised roles. The term capitalism has come to involve multiple layers and the famous social historian Fernand Braudel attributed it to the span in between twelfth and thirteenth centuries (Fine 2016). Slowly, the term implicated a market system with absolute monopoly of power. In the 21s century, capitalism persists in the persistent efforts on the part of workers to protest the inequalities that are blatant in their power equations with the employees. Many theorists have argued that the only alternative to capitalism can be the assemblage of power in the hands of government which will control the autonomy of individuals. Douglass North argues that the social institutions shape the markets, acting as a driving force and has a great influence in moulding the way a market will evolve (Pichelmann 2015). Therefore, it can be derived that institutions exert great power in reducing or inducing ineq ualities within capitalistic society. The historical and theoretical studies regarding the existence of inequality in a capitalistic society proves how it is an indirect system of governance where the economic factors are controlled by a set of acceptable behaviour (Smith 2016). The growth and progress of capitalism Capitalistic societies proliferated mainly during industrial revolution which slowly assumed the shape of money-commodity-money where money became the ultimate expression of wealth and power. Under this scenario the producers were powerless and the factors of production could be brought easily as commodities (Lambin 2014). The replacement of workers by machinery furthermore forced the labourers to provide cheap labor at the cost of their physical and social relaxation. In this manner, the employers remained at the advantageous end by selling the products at a much lower price. As much as this method will ultimately stagnate the economy because the competing companies will follow the same path, it will nevertheless create a society opaque and unequal (Veblen 2015). Capitalism progresses in a society because of the opaque mode of reproduction where the individuals compete in open markets and contribute to it. A capitalist society will only cease to be unequal when he wages will increas e than the productivity of the workers. Marx argues that only when technical progress is capital-neutral can the labourers expect a rise in wages with productivity remaining constant. Capitalism and Inequality Inequality is the only inevitable outcome of a capitalist society and it will progress in a same way by which one class will have a favourable stance to dominate over the other for development and advancement. There are two important aspects o capitalism which are commodification and cultivation (Pradella 2015). Commodification has consequent in an ever growing expansion of wants and desires and the development of a subjective perception of needs and desires. Developing and fulfilling these wants demarcates the classes. The public spheres of exchange of the products give rise to social relations in a capitalistic society. A significant driving force behind large scale commodification is low labor costs and the development of technology to reduce labor costs. Commodification gives rise to inequality and it is a pre-requisite to satisfy the capitalistic societys desire for commodities and services. Commodification has furthermore made a wide gap in between the two classes of the societ y by job displacement with the displacement of large scale of mass. Capitalism has also affected the poor by challenging labor and increased the privileges of a corporate world and the death or annihilation of welfare state. As stated in the case study capitalism thrives under the boon of technology in the realm of public ownership and mass production (Nelson 2001). This is proved when during the industrial revolution, the peasants were taken as manufacturing workers, this was mainly possible because of technological innovation when profit rate was constant leading to a fall in the standard of living or humanitarian values by their capitalistic masters. Irrespective of all these hardships, there is only one class who receives the sum total of benefits, the elite groups. As argued by Nelson (2001) that technological innovation and its proper implementation needs funds and organizational access which can only be afforded by the elite group of individuals. They have better claim at cap ital and over the factories as well as the working conditions of laborers since they have the ownership to executive it. The inequality was further apparent when the wage rate reached the minimal level without jeopardizing the capitalist interests. Inequality remains constant and the corporate sectors became the leading institutions of labor exploitation for the maximum productivity (Gray 2015). The mechanisms by which capitalism operates ceaselessly in the market are: Freedom of enterprise- in a capitalistic regime each and every individual is omnipotent over the means of production Sovereignty of Consumer- the entire pattern of commodity production is based on the desire and buying pattern of the consumer. In a capitalistic state, it is ultimately the consumers who will decide production and how much raw materials will be allocated. Profit Motive- the producer exploits the workers and manufactures good to incur the maximum profit which guides the entire production process. The society has firm foundation of privately inherited property therefore is a complete failure when it comes to creating equality and opportunities to the people of the state (Kotler 2015). Zero government interference- the government has no power or dominance over the day to economic practices of the producers and consumers. Private Property- the main feature of capitalistic society is the existence and dominance of private property. Private property becomes the ultimate motivator for the ceaseless functioning of capitalistic society (Kotler 2015). Over the years, to protest against the rise in inequality that capitalism was thrusting onto the face of society, workers created labor unions and strikes. History itself became a chronicle of how capitalism created gulf in between the classes making the rich richer and poor, poorer. Elites used their power to keep in check these uprisings by their political power and dominance and by introducing labor management sessions and negotiations (Clarke 2016). The elites access to knowledge and information made them not only financially powerful but also intellectually. Capitalism is the oldest economy system and as Marx chronicles in Das Kapital, it is a market based on inequalities and regulated by competition (Fine 2016). The case study is fundamental in understanding one of the cons of a capitalistic state, which is, an in-depth understanding o how knowledge and post-industrialized society accentuates the gap between the rich and poor, making inequality more pronounced. The study is important as it will equip the readers with the phenomenon behind unequal income distribution, the decrease in aggregate incomes and the shifts in economic structure detrimental to reduce the chasm between the exploiters and exploited. As argued by Nelson (2001) technological innovations and their encroachment upon the society is critical to the understanding of class structure, as they are embodiment of the interests of the dominant class. From the above discussion it can be safely concluded that capitalism has its roots deep inside the private inheritance of class and property and therefore the social position of the bourgeoisie. As the case study argues, capitalism will lead to an unavoidable destruction, it is a dynamic which is lying deep within the economic system, is continuously stationery where a new structure comes and displaces the existing on. Under the capitalistic economic arrangement, the conflict between two classes, as can be derived, is based on competing interests and unfair distribution of surplus and profit. A capitalistic society is constantly expanding pushing apart its pre-existing barriers. Reference List: Amin, S., 2014. Capitalism in the age of globalization: The management of contemporary society. Zed Books Ltd.. Clarke, S., 2016. Marx's theory of crisis. Springer. Fine, B., 2016. Marxs capital. Springer. Gilpin, R., 2016. The political economy of international relations. Princeton University Press. Gray, J., 2015. False dawn: The delusions of global capitalism. Granta Books. Hansen, F.R., 2017. The breakdown of capitalism: A History of the idea in western Marxism, 1883-1983. Routledge. Harris, J., 2016. Global capitalism and the crisis of democracy. Clarity Press, Incorporated. House, J., 2015. The Free Market Existentialist: Capitalism without Consumerism. Kotler, P., 2015. 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