Economic Problem and Science
If we can promote economic growth through cooperation, the scientific method could help us separate the truth and error to find the best approach for cooperation. However creating wealth is not the same as building a building, an engine and etc because same set of rules doesn’t apply to everyone. Economics is a human behavior and humans are extremely unpredictable.
Some people referred to as egalitarians or equalitarian wishes to get rid of the rich or at least reduce the extremes of wealth and poverty. They views rich as parasites because they reap the benefits in luxury while the poor work hard at minimum wage to earn their money. They argue that wealth causes poverty, the rational without the rich there would be no poor. When calculated, if the top one percent of rich in America gave half of their net income to the poor, poverty defined by the government would be eliminated in the US. This may be true for America but the affect on the global poor would be minimal because the needs of the poor globally are greater than American poor. The problem is not that the rich does not adequately share with the poor, instead they grind people to the ground, exploit them, steal from them, and deny them with decent living standards or health care.
The Need for the Rich
Others believe that the rich are essential to our economy. The economy needs rich people because they have wealth. As the economy expand, the rich needs to save profit to invest on capital goods to adjust to the increase in poverty. Why is the poor and middle class living in subsistence and can’t save? They may have money saved up for retirement, and college fund for their children; however they have many immediate needs and desires, in this case will eventually deplete their funds. Unlike the poor, the rich’s income is greater than their expense even they splurge in luxuries therefore forced to save. It is know in history that the poor people are poor because they failed to save, invest, and protect their savings. Some economists insist that the rich saves too much and spends too little. The rich may choose to spend their money on luxury to keep factories open producing outputs or investing on a company to purchase capital goods therefore hire more employees. Spending and investing are similar in creating immediate jobs, but the similarity stops because investment promotes productivity, which leads to economic growth, therefore more new jobs created. The rich have a vital job to do; they have to invest properly and if they fail to do so, will lose their money fast. The equalitarian mocks their opponent for their support “trickle down” economy. They wonder why the rich have to benefit first in order for the rest to follow. But some economist argue that rich needs to invest first, and workers need to get hired and paid first before the investors enjoy if there is any gains.
The Rich in a Democracy
The rich intentionally obstruct and put a stop to democracy. Wealth and democracy doesn’t mix well with the follow reasons. The rich use their money to lobby politicians therefore undermine the democratic process. This weakens democracy, the rules of the law becomes unjust and favors the rich. Complete democracy is needed; however one cannot have political democracy without economic democracy. Both works together that embody complete democracy. With the socialist notion of one person one vote for complete Democracy, however capitalism proceeds on the principles of one dollar, one vote. This means that rich have a disproportionate say over the poor.
The claim one dollar one vote free market system gives disproportionate voice for consumers is false. The rich may have money however, when they invest or save, they are not consuming, so they actually bring fewer dollars in the market. Also, there are greater amount of non-rich and the dollar amount total outnumber the dollars of rich...