Why Has Capitalism Failed?

One of the most fundamental ideas of capitalism is that one can get wealthier by enriching or contributing to the society. However, the world is still fighting against poverty, and for some reason, it fails tremendously. According to official information provided by the World Bank, poverty is considered to be a fact of living on less than US $3.10 a day. Extreme poverty is referred to the state when a person lives below a point of $1.90 a day. So, why did the capitalistic approach called upon to fight poverty fail? Any economic system has a small chance of eradicating poverty, but in most cases, it is an endless loop that makes it impossible. Let us imagine a capitalistic society where everybody has enough amount of money. Prices will quickly go up, as capitalism relies on a free market pillar. People with least amount of money will become poor. No doubts that capitalism has been successfully fighting extreme poverty, but it doesn’t mean that it can completely eradicate it from its system.

Capitalism divides the nation into several socioeconomic groups, which bring unequal benefits to only certain of them. The government itself provides different programs to fight poverty and disagree with an idea of pure capitalism; thus, it is regarded as a main tool applied to reach these particular purposes. Indeed, capitalism gives bonuses, but only for those who afford them. It means that benefits can only be noticed by a certain layer of society. So, what is the answer to the question: “why capitalism can’t beat poverty?” It covers in a true definition of poverty. As long as we define poverty as not starving, capitalism is the most effective economic technique to eradicate it among others. A very good example is the USA. During the last crisis, the number of people that were food secure decreased from 88.9% to 85.4% and this number remains unchanged till now. The overall decrease in food insecurity from 2011 (14.9%) to 2013 (14.3%) also proves its affectivity.

Eradicating poverty is undoubtedly a compelling task for any economic system. Capitalism has, in its turn, failed because of inequality, socioeconomic classification and the idea of egalitarianism. Unfortunately, no one economic system of nowadays did succeed in fighting against true poverty. Hopefully, humanity is going to come up with a genius idea of an economic concept that will completely eradicate poverty and save the world from hunger and other things connected with a lack of physical funds.