Dong The problems of inequality in distribution of wealth have always been social Issues for nations which adopted capitalism as their economic systems. Most people agree that financial inequality is a threat to society, but they also tend to consider It a major driver which facilitates economic growth and makes the economy work efficiently. I also believed that financial Inequality Is a necessary evil and that It has more benefits than costs.
However, I had to change my viewpoint when I realized the gravity of Its outcomes and the fundamental problems of capitalism, which Is stated In Thomas Picket’s “Capital In the 21st century. ” The mall Idea of this book Is quite simple but astounding. It explains logically why financial gap between the rich and poor gets bigger when the rate of return on capital is greater than the rate of economic growth. Unlike many other studies conducted by microeconomics’s, Pickett backed up his claim with plenty of empirical evidence which I think as its biggest strength. In many parts, I could accept is idea without much feeling of resistance.
I was aware of the immense power of capital especially after reading a book named “Currency Wars” written by Song Honoring. Pickett verified my thoughts that those who own large capital can easily earn huge amount of money, while it is extremely difficult for low-income class to move up to upper classes. However, I did not know this was a structural problem of capitalistic system and realized that inequality will only get worse if the status quo continues. Media often refer to stories of self-made men or women, telling us that even though o are not from rich family, you can make fortune like these people.
There are superstars of course, but Pickett says supermarkets mostly make up for the highest class of economic hierarchy. I realized it Is not Individuals who are to blame for their financial difficulties; nevertheless, those who hold the hegemony seem to hide the fact that It Is an intrinsic problem of capitalism. Pickett moves further from the realm of pure economics and asserts that unless measures are taken to narrow down this economic gap, politics cannot work properly – and It leads to crisis.
People know that even In democratic systems the rich wield strong Influence on enacting many polices, and this can go to a serious extent In the future. Pickett was aware and probably afraid of what the future might bring, which I believe Is the mall reason why he suggested a rather extreme solution: imposing much higher tax on the rich. I agree that recent increase in inequality is an essential part of modern capitalism and needs to be solved. However, drastic increase in tax rate and global capital taxation on the rich seems like a utopian idea. Less authorities from every Anton reach consensus on ten new tax policy, Nils Idea Is unlikely to De Implemented. In addition, there is the issue of Justice in wealth redistribution. Governments need to Justify the cause for imposing heavier tax on the rich; otherwise, they will most likely confront strong resistance. What is important for now is bringing up discussions about economic inequality to a major social issue of the 21st century, and efforts to find ways to resolve it – maybe this was his main intention when he actually wrote the book.