Essay 3.2

Grace Park

4/18/11

Capitalism

Capitalism and the free market is the base of the American economy. Our country is established on certain troths that allow us to preserve our freedom and pursuit of happiness. Consequently, I understand why so many of us favor American capitalism. Our freedom embodies the control of one’s self. As our country diverged from a socialist to a capital economy, we profited in complete ownership of our freedom. With this independence it’s the individual’s responsibility to understand and push oneself to succeed in this capital economy. As capitalism is the segregation of economy and government, I empathize with extreme capitalists who may argue; society assumption that there should be a correlation between economic achievement and social justice is inappropriate. 

Walter E. William’s describes the integrity of our capital economy in an article in which he claims

“… Economic efficiency and greater wealth should be promoted as simply a side-benefit of free markets. The intellectual defense of free-market capitalism should focus on its moral superiority. In other words, even if free enterprise were not more efficient than other forms of human organization, it is morally superior because it is rooted in voluntary relationships rather than force and coercion, and it respects the sanctity of the individual.” (Williams)

Morally, I agree with the capitalist view that capitalism gives complete freedom, which allows the individual to own private property and withstand government coercion (that enables them to redistribute one’s wealth). I understand the inherent freedom the unrestricted market gives us to become entrepreneurs and innovators.

In any structured economy, there will always be subgroups of upper, middle and the lower class. The issue in our extreme capital economy is the colossal difference between these subgroups. Unfortunately, the polarity between the upper and lower class is degrading to the equality and social mobility our government and financial system stood for. With wealth determining social class in our society, and 48% of the economies wealth being profited by the top 5% of our population (Johnson), our uncapped capital economy is making the rich wealthier and leaving the poor impoverished.

Pro capitalists celebrate the notion that everyone can achieve the American dream (even those living in penury), but is it possible for many in our society to achieve such success solely through our tenacity? Because wealth is also a determining factor of where one lives, the segregation between the rich and poor determines the types of education one is provided. Even in the early stages of life, the dissociation between the classes allows the wealthy superior education in order to stay in the top five percent while urban schools keep the pauperized poor.  In the article, Still Separate, Still Unequal: America’s Educational Apartheid, Jonathan Kozol, a well known writer through his books on the American education system, explains that children in urban settings are not given the proper necessities to be educated. He goes on to give frightening statistics

“In 48 percent of high schools in the nation's 100 largest districts, which are those in which the highest concentrations of black and Hispanic students tend to be enrolled, less than half the entering ninth-graders graduate in four years. Nationwide, from 1993 to 2002, the number of high schools graduating less than half their ninth-grade class in four years has increased by 75 percent. … There are 120 high schools in New York, enrolling nearly 200,000 minority students, where less than 60 percent of entering ninth-graders even make it to twelfth grade.”

In our competitive economy, college degrees are becoming a necessity, but as public education systems are failing to help students living in urban settings to achieve even their high school diploma, the playing field for the rich and poor are disparate to begin with. Statistics show that 37.3 million Americans live in poverty, 14 million of which are children our extreme capital economy has provided us with the highest-ranking poverty rate in the industrialized world (Eitzen 31). Many of our youth are struggling with the stress and the dehumanizing lifestyle poverty entails. Additionally, living in poverty strips them of a proper education due to their demographics. For many of these students, it isn’t their intelligence or the lack of motivation they posses keeping them from achieving the American dream, but the lack of education and poverty they struggle with.

The beauty of capitalism is that it allows the American dream to be possible for everyone, unbiased of the social class they were born into. However, our extreme capital economy has stripped the middle and lower class of this possibility. As corporations have monopolized our deregulated economy, large portions of profits are being expended into the pockets of investors and CEOs. In a recent poll, it’s revealed that the average American CEO makes as much as 431 times the average worker and on average, are paid 75% more than their European compeers. (Eitzen 5). Deregulated markets allow for corporations to profit immensely and I feel it would be beneficial if workers were able to profit also. However, in Heiner’s book Social Problems an Introduction to Critical Constructionism claims that “millions of American workers are being- or face the threat of being- ‘downsized’ because corporations seek to ‘trim the fat,’ American workers and workers all over the world are facing cuts in their benefits.” (Heiner 17)

Capitalism promotes a generally equal opportunity for everyone. The issue with extreme capitalism is that the wealth distribution has stained the troths of equality that our nation stands for with ignominy. Eitzen writes, “Social policy is about design, setting goals, and determining the means to achieve them. Do we want to regulate and protect more as the well-developed welfare states do, or should we do less? Should we created and invest in policies and programs that protect citizens from poverty, unemployment, and the high cost of health care or should the market economy sort people into winners, players, and losers” (Eitzen 11)? Personally, I believe the answer is yes. Although I agree with what capitalism entails, social policies that semi-regulate the market promotes a better distribution of wealth and will replenish the middle class. In addition, this would lower poverty rates and allow families to move out of urban settings, providing children with better opportunities. A more proportionate distribution of capital, where the top 5% does not own 48% of our economic wealth, would create equilibrium within the economic playing field.

It is the government’s job to promote social justice. It is the government’s job to seek prosperity and alleviate those in poverty. It is the government’s job to seek economic justice. Although some may see a semi-government regulated economy as a breach of our freedom, I see it as they are securing it. Regulating big businesses would promote better pay for workers and secure our instable economy. It would ensure large corporations do not hand out million dollar bonuses to their investors while our economy is fighting a recession. Seeing our extreme capitalism has already forced our government into billion dollar bailouts, seeking more regulation in our open market seems sensible. This would force corporations to be honest of their debts and investments making it more difficult for recessions to occur. Our government taking a more hands-on approach would also enable them to redistribute our wealth reducing the imbalance of wealth. Semi-regulation promotes social mobility and economic prosperity unbiased of one’s social class. 

Work Cited

Heiner, Robert. Social Problems: an Introduction to Critical Constructionism. New York, NY: Oxford UP, 2010. Print.

Eitzen, D. Stanley. Solutions to Social Problems: Lessons from Other Societies. Boston: Pearson Allyn & Bacon, 2007. Print.

Waddan, Alex. "The US Safty Net, Inequality and the Great Recession." The Journal of Poverty and Social Justice 18.3. JSTOR. Web. 28 Mar. 2011.

Johnson, Allan G. "Why Is There Poverty?" Allan G Johnson. Web. 29 Mar. 2011.

Kozol, Jonathan. "Still Separate, Still Unequal: America's Educational Apartheid." Harper's Magazine 1 Sept. 2005. Print.