blog




  • Essay / The poor are getting richer and the poor are getting poorer? - 1863

    There is an interesting phenomenon that can be found in almost every aspect of our society. The good ones get better and the bad ones get worse. It seems that people will achieve more and more results in their own way once they choose their path. By analogy, if a person gets on a train in a certain direction, they will go further and further along their path and it will be difficult to change direction or position. The Pareto principle, also known as the rule of eighty, states that in many phenomena, 80% of the results come from 20% of the causes. For example, 80% of a company's profits come from its 20% programs, and 80% of crimes are committed by 20% criminals. In economics, there is also this phenomenon of imbalance. The rich are getting richer and the poor are getting poorer. The richest 20% of the population own 80% of all wealth. The distribution of wealth is unequal. Many theories could help explain this phenomenon, from a philosophical, sociological or economic point of view. In Thomas Piketty's book, Capital in the 21st Century, the author believes that the return on capital is higher than that on capital. the rate of economic growth, except during the period of World War II (Piketty). Accumulated and inherited wealth plays a larger role in the overall economy. Over time, the rich would get richer and the poor would get poorer. This is part of the results of capitalism. This view is illustrated in the following image (see fig. 1).Fig. 1. After-tax rate of return versus global growth rate, according to Thomas Piketty, Capital in the 21st Century. Belknap Press. 2014.Print. However, the American Enterprise Institute (AEI) refutes Piketty's view. AEI believes that although Piketty did his calculation with after-tax income, he failed...... middle of paper ......after-tax return of wealth of different groups of rich from 1990 to 2012 (see fig. 10). This chart shows that all wealthy groups tend to enjoy the same returns to wealth. The assumption of Zipf's law applies. At that point, the distribution of wealth throughout society would revert to the distribution of power laws. The proportion of wealth held by the richest population is increasing rapidly. Conversely, the proportion of wealth held by the rest of the population gradually decreases. The poor become poorer as a result. The consequences of wealth inequality are serious. This harms the harmony of the entire society. This could lead to poorer health, lower education levels, high crime rates and a loss of trust in government, according to an article in the Huffington Post (Friedman). The government must find solutions to solve the problem of inequality before it is too late..