Foreign Affairs Volume 92 Number 2
Capitalism and Inequality : What the Right and Left get Wrong
Journal by : Jerry Z. Muller
I may not an expert in this topic because all I know is general things about capitalism and socialism in surface level, which could be wrong interpretation, but I kinda want make this writing for the sake of it because this Journal give adequate and interesting explanation about capitalism, atleast for me.
In the very first part, the Author explain the effect of capitalism in America, which considered to be an economical inequality to it’s people. The people in the ‘left’ said Government must act to, atleast, reduce the inequality by taxing and spending a lot. The people in the ‘right’ said it was not necessary because the ‘market’ will correct the inequality itself later on so they must reduce Government taxing and spending. The author think’s they both wrong because inequality is ‘inherent’ problem as Capitalism implied.
Before the reasoning, the Author marked capitalism as private property use, goods and services distribution and selling based on free individual decision and market system. In capitalism system, only people who can ‘serve’ the market need, in more effective and efficient way, who can be succeed and the others who can’t will fail. That’s why capitalism, somehow, define the equality based on their people capability to answer the market need. The normative of this system pushed people spending their lifetime, creating new, innovative, even strange sometimes, ideas for market purpose so everyone get the benefit.
In advance capitalism countries, as Author explain, lot of barrier reduced so everyone, including woman, minorities, and the poor can participate in capitalism system, work for ‘market need’. The very easy example is role of woman shifting from household to corporate or company, which in this era of technology is allowing they made their own idea or work like other man basically do. The marriage which considered as union of woman and man in their base role (Man work to get money, woman work to take care the children and houses) somehow shifted to ‘partner’ who work together in capitalism system because they can get what they want to consume easily by the money they had in this kind of market.
The author explain in pre-capitalism era, the ‘market need’ marked by special organization or institution who had the right to do so, which may dictate the people live at some point, but at the same time, it can teach what really people need, because they may had capability to detect unnecessary need that people try to make or sell.
There’s always constant dynamism and innovation in capitalism to emerge the most benefit to all people at certain point, which at the same time, create a lot of insecurity to people who participate it because they must role their new idea before other people who had better idea kick them from the market. The left party in american, as the Author explain, mostly push the government to facilitate this insecurity, which may kind of social insurance or securities form.
Back to inequality, the author state that the problem about inequality in this capitalism system is not the lack of opportunity to participate, but because some of people incapable to knowing how to participate. There’s some explanation that Government enforce children to participate education so they had skill to do so but, as the statistic Author use, there’s only 75% of U.S. high school graduation rate and roughly 40% of young adults are enrolled in college in twentieth century. The argument continued that there’s people, who may didn’t finish high school or college, had higher living standard than the people who graduate from it, which made the education questionable to function as the Government want.
In the end chapter, the Author ‘offers’ some probability thing’s to do for Government to solve the inequality because the capitalism, which is :
Emerge redistribution income, by taxes, to reduce the rising of insecurity and inequality to come, which may had drawbacks because the Taxation must ‘flexible’ at some point to pay the insecurity that comes in period. Even that didn’t solve the underlying problem.
Increasing the facilitation that enable the knowledge, Internet is the big example, so people can learn how to participate in capitalism system.
Push the under-performed people by Government, as Author stated, is worse than cure the diseases because it promoting the under-performed which contradict as capitalism create and promote.