Capitalism & Poverty in America

by Lauren Anderson

When an anthropology student, who had recently spent time with a tribe in Zaire, was asked what struck her most about her time there, she responded with a question: “They asked me why the United States, with all of its money, could not feed all of its citizens. I thought about it for a while and I could not answer them. I did not know. How would you answer that question?”

I don’t know either.

According to Forbes, the two richest men in the world, Bill Gates and Warren Buffett, live in the United States. Their combined wealth is approximately $108 billion. In the context of American capitalism, these men are experts – maybe even geniuses. They have used the system to their advantage, capitalizing on their intelligence and business sense. Sure, there are millions of other people going hungry in this very same country, working for less than minimum wage and hardly getting by. But, that’s just the way it is. That’s capitalism.

But, is that the way it should stay? How much longer can a system that creates such dynamic inequality really be justified? While a complete conversion to socialism may not be necessary, and completely impossible when considering the politics of this country, perhaps we should consider a step in that direction. We should question why the wealthiest nation in the world cannot feed all its citizens. The gap between the socioeconomic classes in the United States is widening drastically. The middle class is disappearing, sucking more and more people into poverty. A recent article from the Associated Press stated that for many Americans living from pay check to pay check is growing more difficult. Food pantries are overwhelmed by the demand for food. Parents are skipping meals to feed their children. Yet, our restaurants are serving obscenely oversized portions and we are in the midst of an obesity crisis. It doesn’t add up. Obviously, something needs to change.

People need to stop being so concerned with those who exploit social welfare programs and consider the people those programs are helping. The United States government must strengthen its social programs. For too long, poverty in America is a problem that has been left unresolved.

They say the last thing a fish would notice is the water. Capitalism is our water. It’s time for us to notice it.

(Editor's Note: According to the U.S. Census Bureau, as of 2005, about 18 percent of all children in the U.S. lived in poverty; the bureau defines the poverty threshold as a family with children earning less than $19,806 annually. The National Center for Children in Poverty lists 13 million children as living in poverty)

(Political graphic from radicalgraphics.org, which offers its material for free.)

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Tommy said...

The Great Society didn't work out too well for us and The New Deal Era has left us with many long term economic problems.

Capitalism should be allowed to run its course. What we have in America is not capitalism. It is a form of socialism. Too much government welfare is floating around the system right now, and most of it seems to be ineffective.

Let's decrease the size of the federal government, give power back to the states, and stop hurting the poor so much through dysfunctional economic practices.

"Capitalism is the only system that has ever eradicated famine and poverty." -Ron Paul

Liberal Arts Dude said...


I often raise the types of issues you raise but have often ended up stymied by detractors who accuse me of being a Socialist or a Communist wanna be. In my blog I talk about the issues of poor and working class people needing to recognize their own economic interests and to act politically along those lines. I think that what is needed is for the masses of ordinary people in US and American culture to take a good, critical look at capitalism. But I think such a goal will be hard to achieve.

Anonymous said...

The issue of executive pay is a major issue creating class problems and legitimately so.

The solution is simple. Open up the executive suite to the same sort of outsourcing that every other worker has had to face.

I have worked around the world and I guarantee the same fat cats being paid millions because they kiss up to the board of directors and convince the board of their being indespensible, can be replace by executives from Europe or India who will work for a small fraction of the pay, and who bring more technical and financial skills.

The foreign executive may not play a round of golf as well, but he will accept less pay and do a better job running the business.

Every major corporation in the US has skilled foreign executives who are much lower paid. Boards of directors around the US should simply fire the guys running the show right now and bring in the replacements from overseas.

Capitalism can solve the problem of executive pay but the guys pulling the strings refuse to let themselves be replaced.

Liberal Arts Dude said...


I think in the discussion of this system vs that the point of *who benefits* shouldn't be lost. In the current American style of capitalism it is the poor, working class, and middle class workers who are getting the shaft while those who are well off are doing just fine. The focus then becomes rather than just a discussion of which system can do this vs. which system is more efficient, etc., the focus is who benefits? I think this is a fair question to ask.

Rick Rockwell said...

>>>Thanks to Liberal Arts Dude for discussing the issue of who benefits from these economic policies.

>>>I feel compelled to comment here to combat the conservative propaganda in the very first comment. The aim of the current Bush administration has been to tear down the legacy of both the Great Society and the New Deal. Yes, the Great Society programs of Johnson fell short, because he sacrificed them on the altar of the Vietnam War. But please, the New Deal created a more equitable society for the U.S. for the latter half of the 20th Century. Bush has tried and succeeded at rolling back wage guarantees that were put in place then. In the Bush administration’s view, if we’d just go back to the Hoover era, all would be right with the U.S.A. again.

Unfortunately, I was listening to George Will blather on about entitlement programs yesterday on ABC. This is the next front in tearing down the New Deal for Republicans: getting rid of social security.

The prescription found in tommy’s response sounds like the U.S. circa 1930. So let’s all go back to Hoovervilles, and poor houses that are dumps for the elderly, far worse than poorly managed retirement homes are in the modern era. The states did not have a solution then and probably won’t now for creating social equity.

The truth is we are paying a debt on military build-ups of the Reagan and Bush eras. Look at what this country spends its money on by tracking the budget sometime and you’ll see what the conservatives don’t want you to see: huge sums to the Pentagon and defense contractors. These sums dwarf anything in the social welfare programs. And generally, these military programs are filled with waste and misallocation. Wouldn’t you want to invest more money now in properly armored humvees and body armor for troops rather than high-end sophisticated weapons systems that really aren’t helping us fight terror? But such low-tech defense is not what gets those in the Pentagon excited is it?

To the conservatives: please stop lying to us about the costs of social programs. Put the blame where it belongs… on the high-spending Republicans who called themselves conservatives but really aren’t when it comes to fiscal discipline.

Tommy said...

Rick, I am writing in response to your comment. I do partly agree with what you've said.

The first step towards dismantling the welfare/warfare state is to end the massive military spending overseas. You are very right when you say that spending dwarfs everything else we spend on. Look at our social programs, they are in shambles.

We must slowly phase out these social programs or simply let them bankrupt themselves. Some generations (such as yours) are dependent on many of these things... Social security, medicare etc...

But let's let the youth get out of these dysfunctional programs and find free-market solutions.

If the government stopped putting in place regulatory policies which hinder capitalistic growth, I think you would find capitalism to be a solid solution to many of our problems.

The New Deal reforms were good solutions to the depression... temporarily. I do not believe we should have implemented them permanently. Even prior to the reforms the government was not at the level I speak of...You can try and paint a negative face for Conservatism (though Neo Cons have done that for it already), but the 1930s is not a prime example, or even a good example, of what free-market government is like. This 1920s/1930s era, with its poor monetary practices, was the precursor to World War II.

The free market can do most things better and more efficiently than the government can. That includes distribution of money (and thus, equality). What we have now in America is not a fair system and not a truly free capitalist society.

You are very right, Rick. These Neo-Cons who are in power have ruined America with their extraordinary spending. True Conservatism, in my opinion, not this new, evil form we have, is much kinder to and better for society than you make it seem.

Rick Rockwell said...


Thanks for the clarification, but we are coming from opposite poles when it comes to political economy. So we are going to have to agree to disagree.

After reading your comments, I began thinking you would probably agree with Milton Friedman and the Chicago School when it comes to economics. By coincidence, I was watching a documentary about Friedman and the Chicago Boys in Chile this week.

For the sake of a fair discussion, let’s set aside the human rights abuses of the Pinochet regime (if that is really possible!) which made the massive economic turn of Chile possible. Yes, the result today is that Chile is one of the strongest economies in Latin America.

But at what cost? At what human price? The gaps between rich and poor were widened. People lost their livelihoods and lived in poverty with the economic whipsaw that was (and is) the shock therapy plan the Chicago Boys practiced. Many economic experts in Chile now agree that yes, the country has a very good economy but the cost to humanity was too high. So now, you see a leftist government back in power there, and there is a moderation of the old ways that said the market would take care of everyone. The proof is it didn’t. It helped the rich, and it took decades for any real trickle down effect.

The market system believes in survival of the fittest and the weak, poor, and vulnerable best adapt or get swallowed up by the vagaries of that system. Haven’t we advanced past that?

jj said...

I agree with what Tommy said. Capitalism is what the people who built this nation on, and we should return to it. Socialism will take us only to more depths of poverty. Russia nearly started nuclear wars. Cuba and Venezuela are both struggling under the rule of communist dictators. We should never ever think of turning to communism

Anonymous said...

I believe that the New Deal has put us right here in the middle of this economic crisis. Don't get me wrong I love Roosevelt but even he himself said that it was a permanent solution. But everyone in the 50's and 60's loved the money in their pocket so much that when Eisenhower tried to take it away he was nearly impeached. Now why was Eisenhower trying to get rid of the New Deal approach. He saw that Roosevelt had just put the Depression off for another 50 years. Now we are getting the depression dumped on us and we're asking where did this come from. I like how Roosevelt helped us but I think he needed to take away his plan before people liked it too much. He saw what it would do to us in this century but why didn't he do anything.

Rick Rockwell said...

I find it ironic that this comment stream has revived itself as we face our greatest economic crisis since the Depression.

I would argue that when this was written we had no idea the Bush Recession was coming, but most of what has happened has proved me right.

To jj, you may not realize it but unrestrained capitalism is how we got to where we are now. If the government did what states are supposed to do, which is look out for consumers, then we would not be facing this crisis. Please, let's differentiate here: communism is not socialism. There are differences. And so now, please explain to me why even conservatives say the government should step in to save banks and car companies? Truly, if the government doesn't intervene in some way (and on this blog we think the government has bungled the recovery so far) the crisis will only get worse. Please explain to me how unrestrained capitalists aren't to blame for this crisis and how they will get us out.

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