On this issue sir, I must disagree. But first i agree that If income and financial wealth is the only indicator of our well-being then Capitalism is certainly the answer. I also agree that if concentration of wealth among fewer and fewer people is the purpose of capitalism then i am compelled to agree againl. A recent Credit Suisse report on inequality shows that a person needs only $3,210 to be in the wealthiest 50% of world citizens. About $68,800 secures a place in the top 10%, while the top 1% have more than $759,900. The report defines wealth as the value of assets including property and stock market investments, but excludes debt. We can perhaps even add a third social change of Capitalism, namely, the single mother conundrum. To believe that Capitalism can solve this problem is somewhat far-fetched. The list of the number of negative social changes brought out by Capitalism can go on ... divorce, crime, etc etc ...
But before being labelled a commie, i will share with you my weltenschuuang of what governance should be about. I believe societies evolved criss-cross institutions to solve problems that one institution could not. Markets fail education, health for all, they exactly do not do wonders for the climate or the environment. This is where the state and communitarian institutions can take over and fill in key gaps. The key problem with Capitalism is the overwhelming belief in markets providing solutions to all our needs at the scorn of state institutions and communities. Socialism's belief in the state can provide solutions to all our needs is the same blind faith. Or for the anarchists that communitarian institutions can do it all ... again another cul de sac.
A key factor in why poor people stay poor is the whole issue of power. The reason the top 1% are top 1% is because they can effectively eliminate the poor from almost all the wealth available, if they cared to take it all. If I step outside of the United States, and examine how countries have made huge strides in poverty reduction, i come up with the following lessons:
• sustained economic growth, which is necessary but not sufficient for poverty reduction;
• economic growth in sectors that provide employment, production and entrepreneurship opportunities to the poor. These include sectors where the poor are more likely to find their livelihoods such as agriculture, fishing, forestry and other natural resources; and others where unskilled labor is important. In addition, a growing body of evidence suggests that access to energy by the poor can lead to benefits across multiple dimensions ranging from income to education and health outcomes and the well-being of women.
• redistribution of the benefits of growth through public spending in the provision of equitable, quality services (in health, education, water and sanitation and others) for the poor that helps improve their – and their children’s –skills and productivity. In turn, the poor boost growth when they are equipped with assets and resources to actively take part in the development process (this is a main reason for why you would want the poor to get out of poverty);
• pro-active focus on women, the excluded, and hard to reach population groups who may need special help to gain access to employment and quality services. These may have important multiplier effects, positively affecting several dimensions of well-being – for example, educated mothers tend to have better nourished and educated children;
• empowering the poor and marginalized – especially women – to play an effective role in the decisions that determine their long term well-being;
• providing protection against negative shocks (the proverbial safety nets) – including those arising from global crises such as those due to high food prices – so as to avoid slowdowns or reversals in poverty reduction.
This explains largely why even the poorest of the countries were able to make large tends into poverty. In the converse, this might also explain generally with this country has not been able to do it. Quality of education and health for the lowest wealth percentile along with other key services like skills, credit, etc etc perpetuates the inter-generational cycle of poverty.
So it is inaccurate to say that hand outs do not work. It is how they are designed. For example in Brazil, Bosla Familia programme (a social protection measure) gives the lowest wealth percentile cash income on the condition that their children attend school and undertake quarterly health checks. The results have been phenomenal in undoing some of the worst inequality conditions, and this country is not far in being one of the most unequal societies. This country can stay strong if it invests in its people particularly the lowest wealth percentile.
Thank you
