Question

It can be argued that democracy and capitalism are concepts that are fundamentally incompatible with each other. Democracy is built on the principle of equality one person, one vote regardless of the individual's intelligence, wealth, work ethic, or any other features that may distinguish one individual from another. Capitalism, in the other hand, fosters inequality. It uses incentive structures to encourage hard work and wise investment to realize differences in economic returns. Because future income from investments (in human or physical assets) depend on current income, wealth tends to generate wealth, and poverty tends to constrain the individual's economic growth. The cycle is self-reinforcing: success breeds success, and failure compounds failure. "The economically fit are no equalizing feedback mechanisms in capitalism"(thurow 1997) What are some of the remedies capitalistic countries have introduced to mitigate such inequality? Would globalization compound this condition in a capitalistic country? Why or Why not?

Answer 1

Remedies employed by capitalistic countries to mitigate inequality

Put resources into Education.

Differences that arise in school quality and early training play a big role in adding to industrious disparity crosswise over ages. Investments in training, starting in early stages with school-based programs such as Universal Pre-K and Head Start will see economic mobility increase, hence contributing to expanded efficiency and lessening imbalance.

Building assets for those families that work

Strategies that motivates higher saving funds rates and at the same time decreases the cost involved in building financial assets particularly for middle class families can give better monetary security to the families that struggles.

Encouraging progressive tax system.

It is an incredible irony that the top most individuals' tax rate decline with the increase in their wealth and income. The government should come up with policies which will see that the wealthy class' tax rate increases with increase in their income and wealth.

Increasing the minimum wage

Research demonstrates that higher wages for the most minimal paid employees can possibly enable about 4.6 million individuals out of neediness and add around $2 billion to the country's general real income. Furthermore, expanding the lowest pay permitted by law does not hurt work nor does it hinder economic development.

Explanation:

B. Yes, Globalization will compound the issue of inequality in the democratic and capitalistic nations.Reasons being;

Different countries have different policies in place. Various countries have different minimum wage, and what is considered minimum wage in one country may not be minimum in another country. Also of importance to note, different countries have different education systems. In some countries, children begin to learn about financial lessons at early age while in other countries, people learn the same at late stage of their education stage. Therefore, there will always be a huge disparity between these countries especially the developed and developing countries.