The economic system in which industry, trade, and production means are controlled by private interests for profit refers to capitalism. It is the world’s leading and dominant economic system. The characteristics, which accompany such systems, include wage labor, competitive markets, and capital accumulation. The parties responsible for transactions determine the market price of the goods and service exchanged. Different capitalism models are distinguished by the competition, regulation, and ownership in the public domain. In the twenty first century, capitalism has undertaken different dimensions as regards staying competitive while improving on profit mechanisms. Inequality through capitalism has increased over the years and the levels attained threaten the social setup into a breakdown.
Equality in the society is promoted by such factors as education of the workforce, skills and training mechanisms of the general population. The fundamental tendency that leans towards inequality is characterized by demographics, weak labor, low taxation and the permissive nature of organizations (Piketty, 2014). After the initial stages of industrialization, societies were seen to be unequal. This was dispelled as the maturity levels began to increase. In the midst of the twentieth century, capitalism had gone through the unequal phase before flattening. In the present circumstances, the economies are growing into inequality status like before. The rates in the worldwide setting are growing at an alarming rate, which is a serious concern.
The main factors of inequality are contained through inequality of the labor income and that of the capital ownership. In America, the dramatic rise in incomes of the top executives is beyond imaginable durations. The salaries are determined through sympathetic boards or peers while the rest of the workforce is forced to abandon their increments. In most cases, pay cuts are realized while the numbers of the workforce are reduced. Capital ownership is determined to be on the actual differences of productivity at the spectrum of the top and bottom placing of the workforce. The inequality level has been growing at an increasing rate than before especially to the wealth returns.
Merit and inheritance in the end is depicted by the unequal distribution of wealth according to ownership. Piketty (2014) argues that the individuals born into wealth have an easier and better-sustained economic leeway as compared to those who struggle at the other end. The social categories increase the disparity according top wealth and income. The worldwide tendencies of capitalism towards undermining of surface experiences threaten to breakdown profit mechanisms. The distribution of production has led to increase in battle of rights to wealth. With the effects of market dynamics like inflation, the society is bound to suffer in the distribution of wealth to the lower levels of the spectrum as the rich get richer, while the poor get poorer.
is an unjust market economy platform that offers the avenues for social
inequality. The private interests have a control in the trade, industry, and
production dimensions of the system. In this regard, the rate of return is in a
continuous trend of outstripping the rate of growth. With the system on an
efficient basis, inequality is created throughout as concerns wealth
distribution and income parity. In the twenty first century, the rate of
inequality is growing at an alarming pace, whereby the levels threaten to reach
unsustainable margins. Fundamental policies in checking of the trends should be
put in place to suppress such levels of inequality.
Piketty, T. (2014). Capital in the twenty-First Century. Harvard University Press.