- The capitalists generate their wealth by exploiting employees. An employee is not paid according to the true worth of his labor but according to what the employer is willing to pay him. The employer pays him less than what his labor is worth so that the employer can make a profit when he sells the produce.
- Wealth and unequal distribution can create social problems (such as higher crime rates).
- Government interference in markets can be skewed to benefit the wealthy. In particular, wealthy people have the financial means and incentives to influence or corrupt government officials and to lobby for favorable legislation.
- Many people have little wealth left over after living expenses, so they can’t make it grow quickly. This further deepens the disparity between rich and poor.
- Persistent long-term inequality of wealth undermines the motivation of the poor to improve their stance. This creates not only direct but perpetual sociological inequity.
- Wealthy people save relatively more than poor people. Hence some economists believe that an unequal distribution of wealth undermines an economy’s mass buying power, effectively leading to lower aggregate sales, reduced wealth production, unemployment and crises.
- Wealth is defined and judged incorrectly, in many different ways. In particular, people may attach value to things for seemingly irrational reasons (sentimental value). Some may also value spiritual development more than material wealth. Capitalism’s focus on absolute monetary value thus undermines the legitimacy of alternate paradigms.
- The wealthy may not put their wealth to productive use. For example, they may buy land just to deny access to it to others, for personal or environmental reasons. They may buy out other companies that produce better products but are a competitor, and then sit on the product not allowing it to be released to the public.
- When everything is done for profit, it creates immoral systems. For example, healthcare is currently for-profit. As a result insurance companies will seek whatever means possible to deny expensive care to people to maximize their profit. People who are poor can not afford health care and have a lower quality of life as a result. Many life-saving operations such as organ transplants are so expensive few can afford them and die instead.
- The disparity between the laborer and the employer is enormous. Currently many executives earn over 500 times what their employees earn.
- Companies can easily circumvent moral hazard of bad decisions by being ‘too big to fail’. The company is so large and employs so many people that if it were to fail the entire nations economy would plunge. The companies can use this is blackmail to the Government forcing the government to grant large bailouts. This therefore encourages exploitative and damaging investments and tactics by companies.
- Capitalism encourages debt. Laborers are granted access to loaned money with interest, and encouraged to purchase large items they can not afford to purchase with cash like a house or a car or an education, and then enslaved to that debt for 30 years or more. By the time the debt is paid off the total money repaid is often times more than twice what was borrowed.
- Capitalism does not care about individual people, only profit. As a result many companies try to get as much labor as possible from as few people as possible, ideally eliminating employees all together. The drive for cheaper labor to maximize profits results in labor being imported from overseas, which takes away jobs from those who live within the capitalist nation.
- Capitalism encourages people to seek careers in whichever field generates the most income. Thus someone who would have been a promising teacher instead becomes an investment banker solely for the money. People do what pays the most, not what they love the most, or what they are naturally talented at. Vital work for social health such as teachers, social workers, librarians, are paid the least.
- Capitalism discourages the pursuit of pure science. Funding is easy to find for profitable fields such as baldness treatment, impotence, obesity, skin care and other cosmetic issues, while funding for pure sciences such as theoretical physics, space exploration, etc are much harder to obtain.
- Capitalism encourages people to seek to amass wealth and possessions rather than to help their fellow man or society. It breeds selfishness and discourages selflesness. There is no profit in helping those who have no means to repay you.
- Capitalism displaces justice. The wealthy can afford more talented lawyers and buy their way out of excessive jail time or punishments. They can afford higher fines and fees. The poor can not afford good legal defense and suffer harsher sentences as a result.
15 Mind-Blowing Facts About Wealth And Inequality In America