Capitalism on Wages and Income Essay - 1426 Words

Introduction Capitalism is an economic system in which industry, trade and factor and means of production are controlled by private investors or owners with an aim of making profit in a market economy. It affects the rate of capital accumulation, labor wage and the control of competitive market. This usually affects the economy of different societies since the government has no control over the economy. The forces of capitalism greatly affect the societies in that the poor continues to be poorer while the reach society continues to accumulate wealthy and become richer. It widens the income disparity gap. It influences both the economic aspect and social aspect of the societies largely. This mainly is influenced by the forces that†¦show more content†¦For the wages to increase mostly the intensity of labor and cost of long hours are inevitable. Therefore, capitalist cannot benefit the poor. Capitalism and free trade According to Richard N (2006), the free movement of goods due to free market or trade has led to globalization. Though the effects have been assumed to benefit all, there is a large inequality among the poor and the rich both within the countries among the nations. Capitalism is contributed to technological advancement, which has then influenced free trade. The uncontrolled globalization has resulted in more developed societies becoming rich. The rich economies are able to exploit the market by producing at lower price due to their level of technology and advancement in research. They are also able to protect their economy through export subsidies and production subsidies to their farmers. This translates to lower prices for their goods in the global market hence controlling it. The poor countries despite having comparative advantage in production of some commodities they also suffer from competitive advantage from the developed countries they are forced to sell their commodities at a lower price than their expected. They suffer a lot in global trade, which is mainly controlled by the wealthier nations. There are regulations, which restrict the flow of goods in the world market from poor societies. This makesShow MoreRelatedIncome Inequality By Kathryn Edin1227 Words   |  5 PagesIncome Inequality Kathryn Edin’s newly published book did not shock its readers; $2 a Day revealed economic exploitation and poverty in the United States. Edin’s publication, comprised of two decades of quantitative research and analysis, declared 1.5 million household incomes financially support $2 per person, per day (Edin). 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