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Capitalism On Wages And Income Essay

1571 words - 7 pages

Capitalism is an economic system in which industry, trade and factor and means of production are controlled by private investors or owners with an aim of making profit in a market economy. It affects the rate of capital accumulation, labor wage and the control of competitive market. This usually affects the economy of different societies since the government has no control over the economy. The forces of capitalism greatly affect the societies in that the poor continues to be poorer while the reach society continues to accumulate wealthy and become richer. It widens the income disparity gap. It influences both the economic aspect and social aspect of the societies largely. This ...view middle of the document...

For the wages to increase mostly the intensity of labor and cost of long hours are inevitable. Therefore, capitalist cannot benefit the poor.
Capitalism and free trade
According to Richard N (2006), the free movement of goods due to free market or trade has led to globalization. Though the effects have been assumed to benefit all, there is a large inequality among the poor and the rich both within the countries among the nations. Capitalism is contributed to technological advancement, which has then influenced free trade. The uncontrolled globalization has resulted in more developed societies becoming rich. The rich economies are able to exploit the market by producing at lower price due to their level of technology and advancement in research. They are also able to protect their economy through export subsidies and production subsidies to their farmers. This translates to lower prices for their goods in the global market hence controlling it. The poor countries despite having comparative advantage in production of some commodities they also suffer from competitive advantage from the developed countries they are forced to sell their commodities at a lower price than their expected. They suffer a lot in global trade, which is mainly controlled by the wealthier nations. There are regulations, which restrict the flow of goods in the world market from poor societies. This makes them to become poorer than their counter parts. Even within the country itself, there exist a large gap between the poor and the rich. This is because the rural farmers are far from the effect of globalization compared to the commercial farmers.
Capitalism and accumulation of capital
According to Henry, (2012) .There exist a gap between accumulation of capital and investment between the rich society and the poor society. This can be accounted for since the richer or capitalist tend to reinvest their wealth hence generating more wealth for themselves. They tend to expand their ways and means of accruing capital by diversifying in different profitable investments. The poor on the other side are exploited through consumerism by being forced to buy more with their dormant and filthily increasing wages. They therefore lack the means to uplift their economic status and level upward.
Even among the countries, this still happens in that the developed economies invest in the poor counties therefore draining their resources away. Neocolonialism is still in action. The poorer societies are also drained their very best brain thereby rendering them impossible to achieve development goals. They therefore remain poor.
Industrial capitalism
According to Candice and Linda (2004), this came up because of many factors such as availability of surplus capital, large-scale marketing, and encouragement of economic growth by the government, population increase and the technological innovation. These industries are mainly located on the urban areas therefore benefiting the urban...

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