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A Hub From the Question About "Which is the main reason for poverty around the world money or proper education??"[125*6]

Updated on May 3, 2012

War of Wealth

War of Wealth
War of Wealth | Source

The Question

THIS GREAT QUESTION was from shwetha123. One of the commenters, StripedCrunchy, had a few interesting things to say, one of which I wanted to respond to. In part, Striped's comment said:

"... World Poverty is a direct result of the stifling of creativity and individuality, brought about by the soft slavery (or outright slavery) resulting from Socialist meddling. Dependence upon any entity is a hallmark of slavery. Man has been domesticating livestock for thousands of years, by providing for ALL of the animal's needs. All we ask in return is that they behave exactly as we direct, work as we require, and we can EAT THEM, if we wish.

"Dependence is an insidious form of soft slavery, and slavery does NOT engender creativity or self reliance. Socialism, Communism, Progressive-ism, State-ism... They all require dependence and servitude to the Ruling Elite. ALWAYS at the barrel of a gun. If what you create can be taken from you legally, where is your incentive to do squat?

"If all of the "rich" people in the world, right now today, pooled every possession and bit of wealth they had, and spread it equally to every soul on the globe, the people who were poor yesterday would be poor again in very little time, and the people who created all that wealth in the first place would eventually have it all back, and then some. Because they would be willing to innovate, produce and profit from the product of their own minds.

If you want to ALLEVIATE world poverty, work to export free market Capitalism to every corner of the globe, get the people who produce NOTHING (governments) off the backs of the people who do (private enterprise) and allow people all over the world to keep at LEAST 95% of the money they earn or generate. ..."

It all sounds nice and is the common theme of the Conservative movement, but, is it true? It all comes down to the solution provided in the last paragraph "... work to export free market Capitalism to every corner of the globe..." My question is, doesn't truly "free" market Capitalism, when government takes a absolutely hands-off approach, lead inexorably to poverty for the masses and dictatorship for the successful? I think history shows that it does ... always.

Why? A successful capitalist does two things, 1) produces a service or product at the least possible cost and 2) sell the service or product at the highest possible price.

  1. In the first case, since labor is normally the most expensive element of cost, the capitalist is motivated to pay as little as possible to the laborer. If the laborer is not protected by either the government or a union, then they have no power to bargain and must accept what the capitalist wants to pay, this is the way it was in the 1800s. In a free-market capitalist world, neither protection exists.
  2. In the case of materials, the capitalist is motivated to use the cheapest materials possible while still keeping sales sufficiently high to make a meaning profit given the competition.
  3. In order to sell the service or product at the highest possible price, the capitalist is motivated to "corner the market", to try to create a monopoly or come as close as possible. Then, for elastic services and products, such as utilities and cars, the capitalist can charge whatever they want, since there is no government control. It is only for truly inelastic products and services, such as basic foodstuffs, is true competition and true consumer selection possible.
  4. It is a fact that, once a given capitalist or small group of capitalists secure an advantage in the marketplace, without government regulation, they will ultimately monopolize it and drive out all other compitition fhrough fair or foul means.

Consequently, this makes unregulated, free-market capitalism, free of government control no better and probably worse than the socialist, progressives, and Communists Striped is so afraid of. In fact, the Capitalists, become the elites he so despises. As proof, look at America prior to 1900, most of the Latin and South American countries up through the 1950s, England through the 1800s and early 1900s. None were Socialist, none were Communist, none were Progressive and all had a poor class, a very small middle class, and a powerful , capitalist wealthy class who either was the government or had great influence over the government.




I THINK CAPITALISM IS THE GREATEST thing since sliced bread! It beats all of the other forms of economic systems hands-down; if, it is regulated. That is the key to making it work in the way the Conservatives say it should work when it is unregulated, they just don't understand human psychology and economic dynamics enough to know that last sentence is a truism.

It is the regulation started by President Roosevelt and continued by each president, Democrat or Republican, through President Nixon that led to 1) the longest, sustained period of economic stability, 2) the longest period of economic equality between income groups, and 3) the longest period of overall economic growth in America's history. America's economic vibrancy hit its high point in 1985 and has been declining ever since as we started moving away from the Keynesian economic model back to the Austrian school. There was a rivaling the Clinton years only to start back down during the Bush years. What is the common denominator in the period after 1985, decreasing regulation, especially on the financial sector and the flow of money from the poor and middle class to the wealthy class via tax decreases on the wealthy (Reagan, Bush II) and tax increases on the poor (Reagan).

Take a look at the Chart to the upper right, it says a lot, believe it or not, and is not just another pretty face. The Blue and Red shaded areas represent a Democratic or Republican administration, respectively. The horizontal line running across the chart with years, which you probably can't read, marked along it, represents Zero economic growth. If the line going up and down is above the horizontal line, then the economy is expanding, i.e., growing; the higher the line is, the faster the economy is growing. Conversely, if the graph is below the horizontal line, the economy is contracting, you are in a recession.

In brief, reading from left to right, the high point in annual growth is in reaction to recovery after WW II. Eisenhower was plagued by mainly external factors resulting from the residual effects of WW II and the recovery from the Korean War. You can see the longest two sustained periods of growth are during the Kennedy-Johnson and Clinton administrations. The downturn at the end of the Johnson administration was partially a result of the "Guns and Butter" policy of Johnson, a deteriorating world economy, exacerbated by America's linkage to the gold standard. The big uptick in the early Nixon years is the "Nixon surprise" when President Nixon unilaterally took America off the gold standard. The rest of his administration and that of Carters was plagued by various phases of the oil crises leading to the 1981 recession. From then until September 11, 2001, any ups and downs were internally driven, there were no big external events getting in our way. It wasn't 9/11 and our reaction to it, mainly the Afghan war, that led to what followed; the economy was very strong by 2001 and could have absorbed the shock. It was internal policy actions that were responsible for what followed the Clinton administration. I think this is one powerful and indicting chart, don't you?



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    • My Esoteric profile imageAUTHOR

      Scott Belford 

      7 years ago from Keystone Heights, FL

      I appreciate your comment, PHDast7, I try to remain balanced, I am a Libra after all. Sometimes, of course, I don't reach that goal, but I try nevertheless.

    • phdast7 profile image

      Theresa Ast 

      7 years ago from Atlanta, Georgia

      Excellent Hub. Very well written, not the least bit histrionic. Reasonable, rational, explanatory. Thank you for the time you invested in this Hub. SHARING

    • My Esoteric profile imageAUTHOR

      Scott Belford 

      7 years ago from Keystone Heights, FL

      Thank you all for your comments, all of which are right on.

      I added a paragraph, however, because I do think Capitalism, the way America was trying to apply it from 1940 to 2000, (Conservatives started changing it back to the pre-1933 model in 1981, but weren't finished until President G.W. Bush came on the scene) which was the period of greatest economic 1) growth, 2) stability, and 3) equality in America's history. The equality piece ended with the 1982 tax cuts, btw.

    • profile image

      Charles Hilton 

      7 years ago

      The guy you quoted was quoting from the standard Conservative boilerplate.

      It apparently escapes that gentleman that the uber-rich didn't get that way by themselves(contrary to popular mythology). How rich would Henry Ford have become if he had to manufacture the automobiles himself? That's why it's always astounded me how the working class believe themselves to be such a small part of how wealth is created, in spite of the truth that workers are the MAIN PRODUCERS of wealth. All wealth is built on the backs of workers. The entrepreneurs merely come-up with the idea for a product or service and arrange the financing(usually government subsidized) and get the process started. But, let's see how far the ball rolls without labor.

      Most of the rich were born into it. Even David Koch had a rare moment of honesty when he said "I got rich the old fashioned way---I inherited it."

      The current self-loathing of the American working class is due to the rise of the Conservative propaganda machine as well the phony education of our public school system who's only purpose is to give students just enough "education" to become unwary consumers and obedient workers.

      Not until we make inroads in educating the working class of their indispensable role in the creation and perpetuation of wealth will there be justice and fairness for all.

      As for his assessment of globalism, he needs to look into the conditions of those nations that have been brutally exploited by it before he sings its praises. If he wants to know what real Capitalism looks like, he can visit any Third World sweatshop and see what America was like before the advent of unions and the hard-fought workers' rights that even he takes for granted.

      Excellent hub and voted up across the board!

    • Josak profile image


      7 years ago from variable

      Anyone who can't see that capitalism creates classes is blind. As for the argument that the whealth would just find its way back to the same people, firstly I don't think so in the few cases where somthing similar has ocurred that did not happen (see republican Spain) furthermore even if the whealth ended up in the same place that just serves to demonstrate that there is a problem with capitalism, concentrated whealth causes a lot of problems, sure a rich person might create jobs but equally a rich person may not work and simply retire thus depriving society of their labor.

    • tammybarnette profile image

      Tammy Barnette 

      7 years ago

      Very good hub:) I am always in shock that anyone could not see that this leads to a dictatorship and slave class. Why can't they see they are helping the elite take over our country? They are so afraid Obama is trying to make us a "bunch of socialist," because of the liberal audacity to take care of the poor and disabled but will preach to the choir all day to let Big Business make the rules. Baffles the mind.


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