The document discusses the widening wealth gap in the U.S., highlighting how returns on capital contribute more to the top 20% of earners than wages do, leading to decreased social mobility and economic stagnation for the lower classes. It emphasizes the need for educational investment and wealth redistribution to enhance opportunities and economic fairness. Additionally, it points out that unchecked wealth concentration poses risks to social cohesion and perpetuates a cycle of inequality, calling for reforms to address these systemic issues.

1. Short Report
On 26th January 2018, the Dow Jones Industrial Average
reached the new historical level by 26,616.71 (FINANCE,
2018). Even though the whole economic pie is growing, the gap
between the rich and the poor is widening. In the United States,
from 1983 to 2013 the total net worth of the top 20% increased
7.6% (Domhoff, 2014). The inequitable wealth distribution
enables the rich even richer. In fact, the rich also have
extraordinary incomes; however, the most part of income is not
come from the works but from the return on capital. “In 2008,
only 19% of the income reported by the 13,480 individuals or
families making over $10 million came from wages and
salaries” (Domhoff, 2014). In other words, return on capital is
more efficient than return on works for the top 20 percent.
What’s worse, the society should confront the truth that the rate
of return on capital exceeds the rate of the growth of the
economy. The social mobility declines, people lacks ambitions,
deficits grow, wages stagnate, workers buy less, companies
downsize, tax revenues decrease, government cuts programs,
workers receive poor education, unemployment rises
(Kornbluth, 2013). The vicious cycle formed; therefore, the
poor realized it more difficult to climb the economic ladder.
The ability of earning wealth for the top 20 percent and the last
80 percent is unequal. “If affluence results from inner aptitudes,
it might seem futile to try reining in the rich” (Hacker, 2012).
For the top 20 percent, most of their income does not come from
wages but come from their return on capital. The economy faces
a fundamental problem. The rate of return on capital beats the
rate of the growth of the economy. The expect return on capital
reach roughly 5 percent on their investments, with minimal
taxation; meanwhile economic growth was only around one
percent” (Krugman, 2014). Even though the gross domestic

2. product is growing, the wealth of the rich is growing much
quicker than the economic growth. Therefore, the top 20 percent
ensure that they can enhance their economic position.
Low social mobility is another essential problem in the US.
“Economic data gathered since the early 2000s have shown
conclusively that American social mobility is low and has been
so for half a century” (Madrick, 2014). When the poor realize it
almost impossible to climb the economic ladder, they loss their
ambition which triggered the vicious cycle. People lacks
ambitions, deficits grow, wages stagnate, workers buy less,
companies downsize, tax revenues decrease, government cuts
programs, workers receive poor education, unemployment rises
(Kornbluth, 2013). What’ worse, the poor find they cannot
afford expensive educational fees for their children, so their
children cannot access the advanced education, and more
difficult to find a good job. Besides, the poor lack of a valuable
network of people. In society, the resources of a social network
become significant. It controls all kinds of resources. The rich
take advantage of this privilege to increase their influence.
Therefore, with the passage of time, social mobility will become
slow, then the social mobility will directly lead to the closure of
social structures. Comment by Joseph Conlin: lack
Comment by Joseph Conlin: ambition, deficits grow,…
The inequitable distribution of wealth also impacts socially.
Inheritance of wealth challenges the social morality. When
inheritance of wealth becomes the most efficient way to turn
into the rich, people lack motivations in the work because they
find that no matter how hard they work, they cannot enter top
20 percent. “when the rate of return on capital greatly exceeds
the rate of economic growth, ‘the past tends to devour the
future’: society inexorably tends toward dominance by inherited
wealth” (Krugman, 2014). When the rich died, the wealth
passed to their heirs with the least tax. This inherited wealth
only belongs to the few.

3. The tax system, the second largest distributor of the wealth,
makes the gap between the rich and the poor even bigger.
“Taxes are progressive for the bottom 80%. But if we break the
top 20% down into smaller chunks, we find that progressivity
starts to slow down, then it stops, and then it slips backwards
for the top 1%” (Domhoff, 2014). People willing to think that if
the rich receives more money on tax return, they would create
more jobs, and promotes the economic growth. However, there
is no certain connection. The rich may invest more money on
the business or may not when they receive more tax return. The
rich usually consider which investment could earn higher return.
In general, the top one percent prefer to enjoy the money
because they already have the stable customer. Compare with
the new brand, people prefer to buy famous brand (Hacker,
2012). Therefore, the top one percent occupied stable income.
Inequitable distribution of wealth triggered health problem.
“Unequal societies not only bear ‘diseases of poverty,’ but also
‘diseases of affluence.’ (Hacker, 2012). People get nervous
easily, and sensitive to the pain. The poor more likely eating
crazily to seek comfort for their heart. The poor want to be the
rich. People have the rights to pursuit the happiness; however,
when the unchangeable fact in front of the face, people trend to
release themselves with intense way.
How to ease the inequitable distribution of income? The
government should spend more investment on the education
field. For the poor, education is not the only way they can
change their destiny but the most efficient way to rebuilt the
bright future for themselves because the poor student get the
chance to access the people who have valuable social resources
such as well-know professor, smart classmates. Invest on
education improving people itself; therefore, the poor see and
access more opportunities.
How to increase social mobility? Decrease the influence of the
last generation to the new generation. The government needs to

4. pay more attention to the educational field and provides more
educational chance and options for the 80%. Today the tuitions
of the advanced education cost roughly half percent annual
income of the middle class. Then increase the human capital
investment and provide relatively equitable distribution system.
Relatively equitable distribution occurs with meaning because
equitable distribution means no differences between the hard
work and doing nothing. Relatively equitable distribution can
promote the willing of move forward such as innovation and
hardworking. What’s more, improve the estate tax reform, and
decline the influence of the heritage wealth.
How to break this solid social structure? Change the way of the
wealth distribution. In other words, promotes the wealth
distribution reform. However, the wealth can affect power, just
like the power can affect wealth. “Those who control a
government can use their position to feather their own nests,
whether that means a favorable land deal for relatives at the
local level or a huge federal government contract for a new
corporation run by friends who will hire you when you leave
government” (Domhoff, 2014). People who have power can use
this privilege to exchange the wealth. Since the power and class
appear in the human society, corruption also appears. Wealth, as
an extremely useful resource for the power always affects
politics. To avoid this kind of situation, the classes need to
flow, to have mobility, so the society has more energy.
When the social mobility increases, the gap between the rich
and the poor declines. The society enables steps into the moral
cycle where wages increase, productivity grows, economy
expands, workers educated well, government invests more, tax
revenues increase, companies hire more, worker buy more, and
wages increase (Kornbluth, 2013). In the virtuous cycle, each
side promotes each other. The issue of inequitable distribution
of wealth involves all aspects of economy and society.
The United States should not eliminate inequality, because a
certain degree of inequality is the inevitable result of health risk

5. innovation and market competition. Where is the market
distorted? The biggest distortion of the U.S. economy may be in
the financial sector, where small numbers of people use cheap
credit to speculate on real estate and financial derivatives that
have little impact on economic growth and job creation, but the
personal gains are surprising.
Inequitable distribution of wealth has always existed, the
widening gap between the rich and the poor may have a more
dangerous impact on the society of the United States. A healthy
society should have strong social mobility. When the social
structure become solid, they may lead to the rigidification of
resource flows, and it triggered more social problems such as
people lack ambitions which block the development of the
society. What’s worse, inequitably distribution of wealth is
shifting wealth to the top 20%. The society could go into a
vicious cycle, and the social class becomes more stable and
solid. So, the poor find more difficult to climb the economic
ladder.
Works Cited
Domhoff, G. W. (2014, June 17). Wealth, Income, and Power.
Retrieved from Who Rules America?:
http://whorulesamerica.net/power/wealth.html
FINANCE, Y. (2018, Jan. 26). Dow Jones Industrial Average.
Retrieved from YAHOO! FINANCE:
https://finance.yahoo.com/quote/%5EDJI?p=^DJI
Hacker, A. (2012, Feb. 23). We’re More Unequal Than You
Think. Retrieved from New York Review of Books:
http://www.nybooks.com/articles/archives/2012/feb/23/were-
more-unequalyou-think/?insrc=rel
Kornbluth, J. (Director). (2013). Inequality For All [Motion
Picture].
Krugman, P. (2014, May 8). Why We’re in a New Gilded Age.
Retrieved from The New York Review of Books:
http://www.nybooks.com/articles/archives/2014/may/08/thomas-
piketty-new-gilded-age/

6. Madrick, J. (2014, May 27). INEQUALITY IS NOT THE
PROBLEM. Retrieved from New York Review of Books:
http://www.nybooks.com/blogs/nyrblog/2014/apr/24/inequalityn
ot-problem/?insrc=rel
Great work. Practice eliminating the defining (yellow). Fix the
capitalization in the Works Cited apge. Grade: A. Revise.
Capitalism refers to the economic system of private ownership
of property, goods, and services as well as factors of production
by free individuals. The elements of capitalism act as crucial
roles of causing economic inequality since the pre-industrial
period. People have traditionally produced commodities that
they needed for survival and traded them for those that they
could not produce themselves in order to satisfy their insatiable
needs. The eighteenth and nineteenth centuries ushered in the
industrial age that heightened the levels of inequality. In the
post-industrial age, many nations attempt to resolve inequality
by using political tools of governance. Capitalism has its roots
spread so wide in the world, especially in the post-industrial
age that the political tools of governance cannot control the
rising inequality. But current government policies will not solve
the problem. America needs to take other steps. Comment by
Author: 50 words short of the absolute minimum. Comment by
Author:
Capitalism，persistent part of today’s world and human
progression, stems from the private ownership of factors of
production. Individuals are constantly competing to come up
with progressive innovations that set them ahead in society so
as to accumulate wealth for them (Krugman, 2014). Most
democratic governments in the world have accepted the harsh
realities of capitalism for its ability to boost the economy
despite the obvious setback of an increasing inequality between

7. the rich and the poor. Despite the acceptance of capitalism,
most of these democratic governments have set up tools of
trying to redistribute wealth in the society and promote equality
among all human beings. Government-imposed policies cannot
eliminate economic inequality. Whereas embracing the same
elements of capitalism that has caused inequality might serve as
a better solution.
First, let us evaluate the contributing factors of inequality as a
result of capitalism in the world. The changing forces and
insecurity in the world contribute of inequality in most nations’
economies. Individual, family and group variations also serve as
sources of inequality due to capitalism in the economy.
Globalization and shifting value on the factors of production
widen the inequality gap (Krugman, 2014). Equality exited
during the pre-industrial period since individuals consumed all
that they produced through their hard work. Production was also
limited to only what a person required for survival and no one
accumulated unnecessary extra wealth. The industrial age
introduced self-cultivation that highlighted the differences
among individuals, families and groups. Comment by Author:
Awkward transition. You do not need it either. Comment by
Author: You are using sources about America. Therefore focus
on America. Comment by Author: These sentences repeat
what you already stated in the first paragraph. The reader does
not need repetition. Delete.
Specialization, as the first aspect of the industrial age, led to
development of inequality. Individuals separated into groups
according to skill and knowledge and produced what they knew
best at producing then trading it for commodities they did not
produce so as to satisfy their needs or meet particular demands.
The introduction of specialization also led to the start of
ownership of factors of production such as land, raw materials
and capital. The value of these factors of production varied and
so did the value of the commodities that resulted in the

8. accumulation of wealth by some members of society (Piketty,
2014). The group of individuals who held inferior skill and
factor of production in the community formed of the lower half
of people with little wealth. Inequality thus enters the society
with capitalism in the industrial age through the differentiation
of individuals and groups. Comment by Author: Why does
the reader need this history lesson to understand the current
problem. Next paragraph works fine without it. Delete.
Since the industrial revolution, the economy has become an
advanced source of dynamic innovations that tend to increase
inequality between the upper and lower class. Dynamism refers
to the changes in the economy that bring about new methods
and techniques of production, which promotes and demotes
specific groups in the society. During the industrial age,
physical labor stood for a great source of income that promoted
the male gender due to their natural strength over females
because of their ability to work for longer periods (Muller,
2013). At present, many vocations prefer cognitive abilities
over physicality and this change promotes women with a higher
emotional and functional intelligence. Introduction of new
means of transport also brought about the change in distribution
channels of certain commodities. These commodities
disadvantaged a certain sector of the community that
specialized in old techniques of distribution. This caused the
people that were using these old techniques to start finding new
ways to get income or rather adapt to the new ways.
The traditional organization also renovated themselves to
incorporate a variety of programs such as labor unions and
outsourcing of certain duties. At every stage of economic
dynamism, a specific group rose with additional wealth while
another dropped to the lower class. In this way, the dynamic
nature of the economy maintains the shuffle of individuals up
and down the economic ladder. The insecurities in the economy
refer to the risk of an individual being negative affected by the

9. changes in the techniques of production. Capitalism ensures the
formation of distinct winners and losers in the competitive
economic field and those at the top control the wealth of the
society while the poor tried their best mostly by working for the
wealthy in the society, so as to find something to put on the
table for their loved ones. Therefore, the favor of the techniques
of production determines the distribution of wealth under the
elements of capitalism. In capitalist nations, the talented, highly
skilled and wealthy families amass most riches of the society
during the twenty first century.
Economists attribute the allocation of wealth in the twenty first
century to the prevailing opportunities in the world (Piketty,
2014). Globalization facilitates the movement of knowledge and
information from one nation to another. The wide access of
information to every individual in the world through the internet
despite their nationality means that most people have a fair
opportunity of gaining wealth. However, instead of closing the
inequality gap, globalization is leading to the unequal
concentration of power. Power in this case refers to the
knowledge of production owned by patent rights of the
developed countries and distributed at a cost to the developing
nations (Domhoff, 2006). Pharmaceutical innovations, for
instance, are owned by few manufacturers that hold the medical
formulas for monetary gains as the rest of the world must pay
for the medicines. Comment by Author: Are you quoting
Krugman or Piketty. You do not have a source for Piketty and
there were no readings with him as the author.
The factors of production get their shifting value from the
ability of certain nations to set a high price to their exports and
commodities. Medicine and machines are some of the most
expensive commodities as compared to agricultural products
and unprocesses materials. Processing of raw materials to
produce a finished commodity also raises the value of an item
such that only certain classes of people at the top can afford

10. them. Inequality in the society is sustained by the comparative
difference in the value of goods according to the importance set
on an item by the people. The value of an item hereby grows
higher when a great number of people need and desire it for
survival. Therefore, the demand of a substance determines its
importance to the society. Comment by Author: While this
is true, it has nothing to do with the inequitiable distribution of
wealth. Comment by Author: Not a word. Comment by
Author: Possession does not change the value of an item.
Possession changes the wealth of the individual holding the
item. Comment by Author: What does this have to do with
inequality.
Redistribution of income among the citizens of a capitalist
nation can resolve its inequality. The current capitalist economy
promotes a certain group of people into the elite class based on
how they utilize the available opportunities. It seems, therefore,
possible to increase the rewards of all individuals by an equal
margin based on whatever they produce. Formerly, the wealthy
upper class secured their position with inheritance of riches and
factors of production from a rich parent (Domhoff, 2006).
Presently, the diligence of an individual can elevate him
appropriately in a manner that closes the inequality gap.
Economists argue that poor rewarding of those in the lower
class and high rewards for those in the top class contributes to
the wealth inequality. Take the example of an organization’s
remuneration packages, the managers and directors receive
double and triple the amount of salary paid to a department
employee in the same company. Comment by Author: You
explain how wealth is distributed in capitalism, but you do not
give one reason why government should remedy the situation.
The economic growth in the United States and the world at large
has been benefiting the top 1% by awarding them the major
income earned from production. Even distribution of wealth in
an organization to all employees according to their contribution

11. on the production process seems adequate for closing the
economic gap. Even distribution of income is, however,
difficult due to the factor of merit that will still place some
members of staff above others leading to the same inequality.
The best solution would be to encourage economic innovation
among everyone in an organization, such as the high rates of
growth, are met by significant individual effort from every
member of society (Krugman, 2014). Capitalism provides a
great source of income for the innovative in society since they
constantly win in their economic ventures and earn revenue. In
the case that every member of society strives innovatively in
their own way, then the majority of the community will receive
rewards of capitalism.
The innovative approach towards capitalism also requires
government interventions to coordinate the distribution of
income to those in the lower class of society. The upper class
may oppose to the equal distribution of income if it appears like
the lower class is receiving undue rewards. The government
should offer programs that not only prevent the rich in society
from getting richer but policies that lift the poor and prevent
them from becoming poorer. An alternative approach to the
closing of the inequality gap is necessary in this case.
Cushioning the less fortunate from experiencing more poverty
through social welfare and life insurance ensures that capitalism
continues to function. Human beings are selfish as displayed by
the egalitarian nature of the wealthy people who own property
and factors of production. In order to eliminate the egalitarian
nature in a capitalist economy, the wealthy should understand
the need of promoting equality. Comment by Author: You
do not address the idea of the previous sentence.
A rising inequality gap continues to increase the risk of sharp
differences between the upper and lower classes of society and
this might negatively affect a country’s economy. The poor
people with no commodities to consume will end up preying on

12. the rich people with more than they need, for them to also
survive. Social vices such as crime and prostitution will
increase in society as people search for a means of survival
(Muller, 2013). When demand for commodities soars higher
than supply, people tend to do all they can to acquire the
available supply of items. In this case, the low class will be
willing to go to all lengths in order to acquire the wealth
possessed by the upper class. In conclusion, redistribution of
the wealth and factors of production requires the participation
of every member of the society in order to achieve equality.
References
Domhoff, G. W. (2006). Who Rules America? Wealth, Income,
and Power. Who Rules America: Wealth, Income, and Power?
Comment by Author: Not APA.
Hacker, A. (2012). We’re More Unequal Than You Think.
Website. Retrieved from
http://www.nybooks.com/articles/2012/02/23/were-more-
unequal-you-think/?insrc=rel
Krugman, P. (2014). Why we’re in a new gilded age. The New
York Review of Books, 8. Comment by Author: Not APA
Muller, J. Z. (2013). Capitalism and inequality: What the right
and the left get wrong. Brigeport.edu. Retrieved from
http://www1bpt.bridgeport.edu/~jconlin/EssaysMullerCapitalis
mandInequality.pdf
Your writing has improved, but I do not understand the point of
the report. You give an extensive history of capitalism and how
inequity is a natural outcome of capitalism, but that should have
taken up no more than 180 words. You are not writing a history
paper. You are not dealing with the issue of inequitable
distribution, more important, the widening wealth gap. You do
not even address that. You explain a great deal about why the
gap is a natural outcome of capitalism, but that is a given of
capitalism as stated in the class. You do not show and address

13. the issue of the widening gap. You do deal with government
dealing with it but you do not give a reason why it should. More
simply, you need to delete about half of this report and come up
with a thesis addressing the widening wealth gap.
Grade: B-. Revise.
Running head: CAPITALISM AND INEQUALITY 1
CAPITALISM AND INEQUALITY 8
Capitalism and Inequality
Capitalism and InequalityComment by 作者: There should be a
title, not a topic. Pls write a title
Capitalism refers to the economic system of private ownership
of property, goods, and services as well as factors of production
by free individuals. The elements of capitalism have been
responsible for economic inequality since the pre-industrial
period. People have traditionally produced commodities that
they needed for survival and traded them for those that they
could not produce themselves in order to satisfy their insatiable
needs. The eighteenth and nineteenth centuries ushered in the
industrial age that heightened the levels of inequality. In the
post-industrial age, inequality is a major concern that many
nations attempt to resolve using political tools of governance.
Capitalism has its roots spread so wide in the world, especially
in the post-industrial age that the political tools of governance

14. cannot control the rising inequality. But current government
policies will not solve the problem. America needs to take other
steps. Comment by 作者: Highlight in yellow means you are
using defining.
No defining
Pls revise. And I gave an example at the third paragraph .
Capitalism，persistent part of today’s world and human
progression, stems from the private ownership of factors of
production. Individuals are constantly competing to come up
with progressive innovations that set them ahead in society so
as to accumulate wealth for them (Krugman, 2014). Most
democratic governments in the world have accepted the harsh
realities of capitalism for its ability to boost the economy
despite the obvious setback of an increasing inequality between
the rich and the poor. Despite the acceptance of capitalism,
most of these democratic governments have set up tools of
trying to redistribute wealth in the society and promote equality
among all human beings. Elimination of the economic
inequality cannot be done through government-imposed policies
but by embracing the same elements of capitalism that led to the
development of inequality. Comment by 作者: Highlight in
grey means you use the passive verb.
There is no passive voice
First, let us evaluate the contributing factors of inequality as a
result of capitalism in the world. The changing forces and
insecurity in the world is a large contributor of inequality in
most nations’ economies. Individual, family and group
variations are also sources of inequality that are attributed to
capitalism in the economy. Globalization and shifting value on
the factors of production are also additional reasons
contributing to the inequality gap (Krugman, 2014). The pre-
industrial period is believed to have been the age when equality
was at an all-time high since individuals consumed all that they
produced through their hard work. Production was also limited

15. to only what a person required for survival and there was no
need for accumulation of extra wealth as there was no where
they could spend that wealth. The industrial age introduced self-
cultivation that highlighted the differences among individuals,
families and groups. Comment by 作者: Highlight in blue means
you use the first/second person.
No first person. Comment by 作者: Example: The changing
forces and insecurity in the world contribute of inequality in
most nations’ economies.
Specialization was the first aspect of the industrial age that led
to development of inequality. Individuals were separated
according to skill and knowledge and made to produce what
they were best at producing then trading it for commodities they
did not produce so as to satisfy their needs or meet particular
demands. The introduction of specialization also led to the start
of ownership of factors of production such as land, raw
materials and capital. The value of these factors of production
was different and so was the value of the commodities that
resulted in the accumulation of wealth by some members of
society (Piketty, 2014). The group of individuals whose skill
and factor of production was deemed inferior in the community
formed of the lower half of people with little wealth. Inequality
was, thus, introduced to the society by capitalism in the
industrial age through the differentiation of individuals and
groups.
Since the industrial revolution, the economy has become an
advanced source of dynamic innovations that tend to increase
inequality between the upper and lower class. Dynamism refers
to the changes in the economy that bring about new methods
and techniques of production, which promotes and demotes
specific groups in the society. During the industrial age,
physical labor was a great source of income that promoted the
male gender due to their natural strength over females because
of their ability to work for longer periods (Muller, 2013). At

16. present, cognitive abilities are preferred over physicality and
this change promotes women with a higher emotional and
functional intelligence. Introduction of new means of transport
also brought about the change in distribution channels of certain
commodities. These commodities disadvantaged a certain sector
of the community that specialized in old techniques of
distribution. This caused the people that were using these old
techniques to start finding new ways to get income or rather
adapt to the new ways.
The traditional organization was also renovated to incorporate a
variety of programs such as labor unions and outsourcing of
certain duties. At every stage of economic dynamism, a specific
group of people was promoted with additional wealth while
another was demoted to the lower class. In this way, the shuffle
of individuals up and down the economic ladder was maintained
by the dynamic nature of the economy. The insecurities in the
economy refer to the risk of an individual being negative
affected by the changes in the techniques of production.
Capitalism ensures that there are distinct winners and losers in
the competitive economic field and those at the top control the
wealth of the society while the poor tried their best mostly by
working for the wealthy in the society, so as to find something
to put on the table for their loved ones. Distribution of wealth
under the elements of capitalism is, therefore, based on who the
techniques of production favor. In capitalist nations, the
talented, highly skilled and wealthy families amass most riches
of the society during the twenty first century.
Economists attribute the allocation of wealth in the twenty first
century to the prevailing opportunities in the world (Piketty,
2014). Globalization is responsible for the ease in movement of
knowledge and information from one nation to another. The
wide access of information to every individual in the world
through the internet despite their nationality means that most
people have a fair opportunity of gaining wealth. However,

17. instead of closing the inequality gap, globalization is leading to
the unequal concentration of power. Power in this case refers to
the knowledge of production that is owned by patent rights of
the developed countries and distributed at a cost to the
developing nations (Domhoff, 2006). Pharmaceutical
innovations, for instance, are owned by few manufacturers that
hold the medical formulas for monetary gains as the rest of the
world is subjected to paying for the medicines.
The factors of production get their shifting value from the
ability of certain nations to set a high price to their exports and
commodities. Medicine and machines are some of the most
valuable commodities that are traded at a high price as
compared to agricultural products and materials that are
unprocessed. Processing of raw materials to produce a finished
commodity also raises the value of an item such that only
certain classes of people at the top can afford them. Inequality
in the society is sustained by the comparative difference in the
value of goods according to the importance set on an item by
the people. The value of an item is, hereby, higher when a great
number of people need and desire it for survival. It is, therefore,
accurate to state that the demand of a substance determines its
importance to the society.
Inequality in a capitalist nation can be resolved through the
redistribution of income among the citizens of a nation. The
current capitalist economy promotes a certain group of people
into the elite class based on how they utilize the available
opportunities. It is, therefore, possible to increase the rewards
of all individuals by an equal margin based on whatever they
produce. Formerly, the wealthy upper class was formed due to
inheritance of riches and factors of production from a rich
parent (Domhoff, 2006). Presently, the diligence of an
individual can be rewarded appropriately in a manner that
closes the inequality gap. Economists argue that poor rewarding
of those in the lower class and high rewards for those in the top

18. class contributes to the wealth inequality. Take the example of
an organization’s remuneration packages, the managers and
directors receive double and triple the amount of salary paid to
a department employee in the same company.
The economic growth in the United States and the world at large
has been benefiting the top 1% by awarding them the major
income earned from production. Even distribution of wealth in
an organization to all employees according to their contribution
on the production process seems adequate for closing the
economic gap. Even distribution of income is, however,
difficult due to the factor of merit that will still place some
members of staff above others leading to the same inequality.
The best solution would be to encourage economic innovation
among everyone in an organization, such as the high rates of
growth, are met by significant individual effort from every
member of society (Krugman, 2014). Capitalism is a great
source of income for the innovative in society since they
constantly win in their economic ventures and earn revenue. In
the case that every member of society is innovative in their own
way, then rewards of capitalism will be distributed to majority
of the community.
The innovative approach towards capitalism also requires
government interventions to coordinate the distribution of
income to those in the lower class of society. The upper class
may be opposed to the equal distribution of income if it appears
like the lower class is receiving undue rewards. The government
should offer programs that not only prevent the rich in society
from getting richer but policies that lift the poor and prevent
them from becoming poorer. An alternative approach to the
closing of the inequality gap is needed in this case. Cushioning
the less fortunate from experiencing more poverty through
social welfare and life insurance ensures that capitalism
continues to function. Human beings are selfish as displayed by
the egalitarian nature of the wealthy people that own property

19. and factors of production. In order to eliminate the egalitarian
nature in a capitalist economy, the wealthy should understand
the need of promoting equality.
A rising inequality gap continues to increase the risk of sharp
differences between the upper and lower classes of society and
this might negatively affect a country’s economy. The poor
people with no commodities to consume will end up preying on
the rich people with more than they need, for them to also
survive. Social vices such as crime and prostitution will
increase in society as people search for a means of survival
(Muller, 2013). When demand for commodities is higher than
supply, people tend to do all they can to acquire the available
supply of items. In this case, the low class will be willing to go
to all lengths in order to acquire the wealth possessed by the
upper class. In conclusion, redistribution of the wealth and
factors of production requires the participation of every member
of the society in order to achieve equality.
References
Domhoff, G. W. (2006). Who Rules America? Wealth, Income,
and Power. Who Rules America: Wealth, Income, and Power?
Hacker, A. (2012). We’re More Unequal Than You Think.
Website. Retrieved from
http://www.nybooks.com/articles/2012/02/23/were-more-
unequal-you-think/?insrc=rel
Krugman, P. (2014). Why we’re in a new gilded age. The New
York Review of Books, 8.
Muller, J. Z. (2013). Capitalism and inequality: What the right
and the left get wrong. Brigeport.edu. Retrieved from
<http://www1bpt.bridgeport.edu/~jconlin/EssaysMullerCapitalis
mandInequality.pdf>
Running head: CAPITALISM AND INEQUALITY 1
CAPITALISM AND INEQUALITY 5

20. Capitalism and Inequality
Capitalism and Inequality
Capitalism refers to the economic system of private ownership
of property, goods, and services as well as factors of production
by free individuals. The elements of capitalism have been
responsible for economic inequality since the pre-industrial
period. People have traditionally produced commodities that
they needed for survival and traded them for those that they
could not produce themselves in order to satisfy their insatiable
needs. The eighteenth and nineteenth centuries ushered in the
industrial age that heightened the levels of inequality. In the
post-industrial age, inequality is a major concern that many
nations attempt to resolve using political tools of governance.
Capitalism has its roots spread so wide in the world, especially
in the post-industrial age that the political tools of governance
cannot control the rising inequality. The aim of this paper is to
identify the exact sources of inequality in the world as a result
of capitalism with probable solutions to the closure of the gap
provided at the end.
Capitalism is a persistent part of today’s world and human
progression is greatly owed to the private ownership of factors
of production. Individuals are constantly competing to come up
with progressive innovations that set them ahead in society so
as to accumulate wealth for them (Krugman, 2014). Most
democratic governments in the world have accepted the harsh

21. realities of capitalism for its ability to boost the economy
despite the obvious setback of an increasing inequality between
the rich and the poor. Despite the acceptance of capitalism,
most of these democratic governments have set up tools of
trying to redistribute wealth in the society and promote equality
among all human beings. Elimination of the economic
inequality cannot be done through government-imposed policies
but by embracing the same elements of capitalism that led to the
development of inequality.
First, let us evaluate the contributing factors of inequality as a
result of capitalism in the world. The dynamism and insecurity
of the world is a large contributor of inequality in most nations’
economies. Individual, family and group variations are also
sources of inequality that are attributed to capitalism in the
economy. Globalization and shifting value on the factors of
production are also additional reasons contributing to the
inequality gap (Krugman, 2014). The pre-industrial period is
believed to have been the age when equality was at an all-time
high since individuals consumed all that they produced through
their hard work. Production was also limited to only what a
person required for survival and there was no need for
accumulation of extra wealth as there was no where they could
spend that wealth. The industrial age introduced self-cultivation
that highlighted the differences among individuals, families and
groups. Comment by 作者: What are your meaning of
dynamism Comment by 作者: Do we need a Transitional
Expressions before this sentence?
Specialization was the first aspect of the industrial age that led
to development of inequality. Individuals were separated
according to skill and knowledge and made to produce what
they were best at producing then trading it for commodities they
did not produce so as to satisfy their needs or meet particular
demands. The introduction of specialization also led to the start
of ownership of factors of production such as land, raw

22. materials and capital. The value of these factors of production
was different and so was the value of the commodities that
resulted in the accumulation of wealth by some members of
society (Piketty, 2014). The group of individuals whose skill
and factor of production was deemed inferior in the community
formed of the lower half of people with little wealth. Inequality
was, thus, introduced to the society by capitalism in the
industrial age through the differentiation of individuals and
groups.
Since the industrial revolution, the economy has become an
advanced source of dynamic innovations that tend to increase
inequality between the upper and lower class. Dynamism refers
to the changes in the economy that bring about new methods
and techniques of production, which promotes and demotes
specific groups in the society. During the industrial age,
physical labor was a great source of income that promoted the
male gender due to their natural strength over females because
of their ability to work for longer periods (Muller, 2013). At
present, cognitive abilities are preferred over physicality and
this change promotes women with a higher emotional and
functional intelligence. Introduction of new means of transport
also brought about the change in distribution channels of certain
commodities. These commodities disadvantaged a certain sector
of the community that specialized in old techniques of
distribution. This caused the people that were using these old
techniques to start finding new ways to get income or rather
adapt to the new ways.
The traditional organization was also renovated to
incorporate a variety of programs such as labor unions and
outsourcing of certain duties. At every stage of economic
dynamism, a specific group of people was promoted with
additional wealth while another was demoted to the lower class.
In this way, the shuffle of individuals up and down the
economic ladder was maintained by the dynamic nature of the
economy. The insecurities in the economy refer to the risk of an

23. individual being negative affected by the changes in the
techniques of production. Capitalism ensures that there are
distinct winners and losers in the competitive economic field
and those at the top control the wealth of the society while the
poor tried their best mostly by working for the wealthy in the
society, so as to find something to put on the table for their
loved ones. Distribution of wealth under the elements of
capitalism is, therefore, based on who the techniques of
production favor. In capitalist nations, the talented, highly
skilled and wealthy families amass most riches of the society
during the twenty first century.
Economists attribute the allocation of wealth in the twenty
first century to the prevailing opportunities in the world
(Piketty, 2014). Globalization is responsible for the ease in
movement of knowledge and information from one nation to
another. The wide access of information to every individual in
the world through the internet despite their nationality means
that most people have a fair opportunity of gaining wealth.
However, instead of closing the inequality gap, globalization is
leading to the unequal concentration of power. Power in this
case refers to the knowledge of production that is owned by
patent rights of the developed countries and distributed at a cost
to the developing nations (Domhoff, 2006). Pharmaceutical
innovations, for instance, are owned by few manufacturers that
hold the medical formulas for monetary gains as the rest of the
world is subjected to paying for the medicines.
The factors of production get their shifting value from the
ability of certain nations to set a high price to their exports and
commodities. Medicine and machines are some of the most
valuable commodities that are traded at a high price as
compared to agricultural products and materials that are
unprocessed. Processing of raw materials to produce a finished
commodity also raises the value of an item such that only
certain classes of people at the top can afford them. Inequality
in the society is sustained by the comparative difference in the
value of goods according to the importance set on an item by

24. the people. The value of an item is, hereby, higher when a great
number of people need and desire it for survival. It is, therefore,
accurate to state that the demand of a substance determines its
importance to the society.
Inequality in a capitalist nation can be resolved through
the redistribution of income among the citizens of a nation. The
current capitalist economy promotes a certain group of people
into the elite class based on how they utilize the available
opportunities. It is, therefore, possible to increase the rewards
of all individuals by an equal margin based on whatever they
produce. Formerly, the wealthy upper class was formed due to
inheritance of riches and factors of production from a rich
parent (Domhoff, 2006). Presently, the diligence of an
individual can be rewarded appropriately in a manner that
closes the inequality gap. Economists argue that poor rewarding
of those in the lower class and high rewards for those in the top
class contributes to the wealth inequality. Take the example of
an organization’s remuneration packages, the managers and
directors receive double and triple the amount of salary paid to
a department employee in the same company.
The economic growth in the United States and the world at
large has been benefiting the top 1% by awarding them the
major income earned from production. An even distribution of
wealth in an organization according to individual contribution
on the production process seems adequate for closing the
economic gap. Even distribution of income is, however,
difficult due to the factor of merit that will still place some
individuals above others leading to the same inequality. The
best solution would be to encourage economic innovation
among everyone in an organization, such as the high rates of
growth, are met by significant individual effort from every
member of society (Piketty, 2014). Capitalism is a great source
of income for the innovative in society since they constantly
win in their economic ventures and earn revenue. In the case
that every member of society is innovative in their own way,

25. then rewards of capitalism will be distributed to majority of the
community. Comment by 作者: I am confused in this
sentence, I cannot understand these sentence
The innovative approach towards capitalism also requires
government interventions to coordinate the distribution of
income to those in the lower class of society. The upper class
may be opposed to the equal distribution of income if it appears
like the lower class is receiving undue rewards. The government
should offer programs that not only prevent the rich in society
from getting richer but policies that lift the poor and prevent
them from becoming poorer. An alternative approach to the
closing of the inequality gap is needed in this case. Cushioning
the less fortunate from experiencing more poverty through
social welfare and life insurance ensures that capitalism
continues to function. Human beings are selfish as displayed by
the egalitarian nature of the wealthy people that own property
and factors of production. In order to eliminate the egalitarian
nature in a capitalist economy, the wealthy should understand
the need of promoting equality.
A rising inequality gap continues to increase the risk of
sharp differences between the upper and lower classes of
society and this might negatively affect a country’s economy.
The poor people with no commodities to consume will result in
preying on the upper class with more than they can consume in
order to survive. Social vices such as crime and prostitution
will increase in society as people search for a means of survival
(Muller, 2013). When demand for commodities is higher than
supply, people tend to do all they can to acquire the available
supply of items. In this case, the low class will be willing to go
to all lengths in order to acquire the wealth possessed by the
upper class. In conclusion, redistribution of the wealth and
factors of production requires the participation of every member
of the society in order to achieve equality. Comment by 作者:
I cannot understand this sentence clearly Comment by 作者: End
up, resort to or result in? Comment by 作者: Example. How they
will prey Comment by 作者: Poor people or rich people

26. References
Domhoff, G. W. (2006). Who Rules America? Wealth, Income,
and Power. Who Rules America: Wealth, Income, and Power?
Krugman, P. (2014). Why we’re in a new gilded age. The New
York Review of Books, 8.
Muller, J. Z. (2013). Capitalism and inequality: What the right
and the left get wrong. Foreign Affairs, 92(2), 30-51.
Piketty, T. (2014). Capital in the 21st Century. Cambridge
Massachusetts: The Belknap Press of Harvard University Press.
Print