Capitalism: Does It Cause or Alleviate Poverty?

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Capitalism: Does it cause or alleviate poverty? By: Zahoor Khan zahoor_660@hotmail.com

To tackle the issue of poverty has been remained a massive challenge in the known history of human civilization for all global economic isms of the world. Each economic ism has its own strategies to address this issue. Capitalism tries to resolve the issue of poverty on the basis of demand supply forces. Capitalism is generally considered to be a philosophy of economic systems that favors private ownership of the means of production, creation of goods or services for profit or income by individuals or corporations, competitive 1 markets, voluntary exchange, wage labor, capital accumulation, and finance .

There may be two possible solutions of the issue of poverty in Capitalism. Firstly, each individual economic agent has monetary incentives to work and perform various economic activities. Thus monetary incentives stimulate the economic agents towards the performance of various economic activities. This may be considered as an indirect solution of poverty in context of Capitalism. Secondly, individuals possess ownership rights. They can possess various productive resources and have the right to use these resources for production and consumption purposes. Each economic agent (Consumer Producer, Government) is assumed to be rational and will therefore try to optimally utilize their resources in their best interests. Thus, this behavior works as an automatic stabilizer in the 1

http://en.wikipedia.org/wiki/Capitalism

economy to resolve the economic issues including the issue of poverty of all masses. The in-depth analysis of the system reveals that both possible solutions of the issue of poverty suggested by the system are factitious. The first solution is viable if fortunately all people become part of the labor force in an economy. This solution does not take into consideration children, housewives, old men and women, insane, and permanently disable people that from...
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