The new hot topic is inequality and how it is increasing. This is a very vague term. We are human beings with substantial differences; we cannot all be Donald Trump, Bill Gates, or Warren Buffet. We are too imperfect to create a utopia or all to have the same standard of living. It is just not possible at this time in human evolution.
There are many reasons why inequality exists in the economy. Before I give my specific list, I will review the general macroeconomic reasons. One, we are NOT created equal! We have many different talents, abilities, and appearances along with unique emotional and physical make-ups. Second, the institution of capitalism—competitive markets by their very nature, naturally flow money to the wealthy. The main reason for this flow is that it is easier to make more money if you already have money. This goes for businesses as well as individuals. This naturally causes a shift towards business consolidation creating monopolies and oligopolies.
For those doubters, I have never seen a statistical, economic study proving otherwise. If you do a little macroeconomic historical reading covering the last 175 years, you can see this yourself. Inequality was proved again by the recent bestsellers by Thomas Picketty, Capitalism in the Twenty-First Century and Inequality by Anthony Atkinson.
The nature of capitalism eventually causes so much consolidation of wealth that the entire economy or country becomes unstable. This instability7 could cause a complete breakdown in society7 because of a lack of basic surv ival goods for the general population. This failure can even result in severe violence and/or revolution. This growing income disparity7 is not only a disaster for the poor, but also a threat to the rich. Poverty breeds broken families, crime and criminal organizations, beggars, prostitution, mass immigration, social protest movements, and failed states. The most recent examples are Egypt and the Arab Spring. These societal upheavals would probably not have occurred so swiftly if they had a reasonable standard of living and opportunities for advancement. You can also see the failures in our own economy in 1907,1929, and 2008.
The following is my list of additional reasons for inequality:
1. Birth – 41% of individuals in the USA remain in the same income level they were born in.
2. Lack of Education
3. Lack of access to capital for investing and savings Lack of luck – This one is more
important than you think
5. Overreliance on debt
6. Lack of adequate wages
7. Employment in the wrong industry or profession
8. Competition against extremely low cost or slave labor
9. Productivity – replaced by machines
10. Caught in the boom/bust economy which hurts the middle and lower income class
11. Lack of competition because of monopolies and oligopolies—less jobs
12. Illegalities and discrimination
Therefore, my definition of equality is: all having an opportunity to advance with adequate health care, education, shelter, and nutrition. The definition also includes the right to live in a sustainable environment with drinkable water and breathable air. There are currently billions of people on this globe that do not meet my definition. This book will illustrate the specific solutions to solve this global inequality both on a private and governmental level. We can create a whole new populace of quality’ customers, clients, consumers, and citizens resulting in a permanent boom and quality of life for all.
Our concern should be how well the populace is living, not how much the top is making. The exception being the extreme consolidation of inherited wealth that is among several thousand families worldwide. This is not about a safety’ net for the unemployed or those who need welfare. This is about providing the basic necessities of life for all! It is not measured by GDP-growth! (See Section V – Statistics) We do not \vant to eliminate competitive markets. Instead, these markets provide for more freedom, diversity of investments, and checks and balances over government. Governments cannot do it all.
We are all in this economy together; what happens to one group economically effects all. We are now in a globalized economy—good, bad, or indifferent. Therefore, our solutions are for the globe at large and each country individually. There are substantial numbers of projects that need to be accomplished to advance humankind, such as space exploration, medical advances, and environmental issues. Reducing the flaws of capitalism will allow us to move forward in solving our problems and enhancing mankind by creating the correct win-win political macroeconomic philosophy.