Politics

The Truth behind Capitalism

Remember, let’s be respectful; let’s be polite; but most of all, let’s be outspoken.

Before I begin, I have already written an article on my stance on socialism and I encourage you to read that before you read this. The link is https://outspokenoppa.com/2019/04/01/the-truth-behind-socialism/

In my English class, we read a story titled, “Singer’s Solution to World Poverty.” Peter Singer, the author, begins the piece by citing a story. He writes about a man named Bob who spends his entire life savings on his new Bugatti. However, because he spends all his money, he is unable to buy car insurance.

One day, he is driving his car and decides to park it on the side of a train track. He leaves the car and goes for a walk. While he is waking, he sees an out of control train racing down the tracks. At the end of the track, he sees a young boy facing the opposite direction of the train so he doesn’t see it coming. The boy is too far away so he cannot hear a verbal warning and the train is going to fast making it impossible to stop before impact. Suddenly, he sees a lever. His two options are either pulling the leaver and directing the train from the child to his new Bugatti, or let the train go and kill the child. Deciding that he spent his entire life’s saving on the car, he let the child die.

The author of the piece describes that while most people in society would save the child in this situation, they constantly don’t in everyday events. He says that most affluent people only spend 30 percent of their annual income on necessities and the rest on luxury. He states that these people are just like Bob because they spend their money as opposed to giving it to the poor.

One can make the case Bob didn’t actually kill the boy per se. He just let the train go on its natural course and did not interfere. The train can be symbolic of a disease or epidemic that kills starving children and the lever represents the capacity to sacrifice money to saving that child.

So, the author says on average, people spend 1/3 of their annual income on necessities such as rent, food, and clothes. But they spend the other 2/3 on luxury such as going out to dine or buying a new Bugatti. Therefore, the author makes the conclusion people should give 2/3 of their money to charity because that money could be used to feeding a child as opposed to buying a new condo.

Now, there are many refutations to Singer’s economic proposal. After all, the title states this is his solution to world poverty. Throughout this article, we are going to discuss why this proposal is not economically feasible and why capitalism is the most effective system.


First off, Singer makes the case on how most people do not need the majority of their annual salary. Which is true, a lot of upper middle class, the top ten percent, and especially the top one percent’s money is spent on luxury as opposed to necessities. However, the largest counter against Singer’s proposal is if people actually do give the majority of their money to stop poverty, innovation will cease altogether.

For example, if a doctor gives  ⅔ of his salary to charity, he will not think about his profession but devote his thinking on how he will pay for next month’s rent. Instead of working on a cure for cancer or creating alternative vaccines, he will focus on how he will pay for his son’s college. This does not just apply to the medical field, but also economic, political, engineering, white collar, and blue collar jobs.

Another problem with Singer’s policy is that the word “necessity” is arbitrary among the different income classes. Yes, at the core root of human survival, necessities can just mean food, water, and shelter. However, medical, educational, familial, and insurance finances are arguably “necessities.” To add on, people with multiple family members have a greater financial responsibility than a single person. 

Granted, charity is incredibly important, I wrote an article in the past on why I created my own charity. But the reason I bring up Singer’s piece and attempt to counter it is to support the notion that capitalism works.

America has the largest GDP and economy because America embraces the free markets. With these free markets, comes the idea of economic mobility. According to AEI,

“It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution.”

Yet, capitalism still breeds poverty. America has a growing poverty rate with 13.5% of the national population living below the poverty line according to U.S. Department of Health & Human Services.

In which I fully acknowledge, I admit that capitalism has major flaws such as the unfairness of inheritances and corporate greed.

But, the largest counter argument put forward is capitalism is evil because there is massive income inequality. The separation of income classes is accurate, however; that is not an evil or even a problem. While I do not like the idea of the top one percent of income earners hoarding their money, they have every prerogative to do so. Yes, there should be an income tax that targets the top one percent, but to suggest the entirety or majority of their money be directed to the poor is an absurd claim. Because in reality, they worked hard for the money people are advocating to take away.

Image result for capitalism

For example, Bill Gates was born into an upper middle class and created Microsoft. Because of his success as an entrepreneur, he became the richest man for 18 years. He was able to multiply his wealth due to his mass contribution to the free market. This narrative also applies to Steve Jobs, Elon Musk, and other prominent millionaires. The point is, through hard work and dedication, they achieved a level of income that superseded their initial base income.


Both a socialist and capitalist can agree that poverty is a tragedy. They can both agree that nobody should be born into poverty and that people at the top should do everything in their power to prevent poverty. However, the answer to poverty is not implementing large taxes and putting it towards massive welfare programs. The answer is to focus on culture.

If people build a society on shared values and agreed institutions, then they can make a successful effort against poverty. If trust is established among neighbors and if people are collectively exercising their life with a sense of dignity, then a culture of hard work can be built. Because the solution to world poverty comes down to that person’s willingness to work hard. People can provide charity and money all they want, but if the person does not want to work hard, then they won’t escape poverty. Charity is vital because it creates a culture where everyone looks out for one another.

We need to invoke a sense of individualism. So people in poverty realize that if they do everything to escape poverty, they will. In the end, capitalism provides an opportunity for people to reach their full potential. The reason why my parents immigrated from the impoverished state of South Korea to New York is because they were told America is the land of opportunity and freedom. Thousands of immigrants across the world come to America to have a better life. They come to America because of the promise of wealth and success. And with that promise, they are told two words.

Work hard.

Remember, let’s be respectful; let’s be polite; but most of all, let’s be outspoken.

3 comments on “The Truth behind Capitalism

  1. dotsrule

    Hi

    Like

  2. Hello Mr. Oppa:

    Thank you for writing this article. At first, I was greatly persuaded by Singer’s argument and was on my way to donating all of my life savings and possessions to charity. I was on my way to the real estate agency to sell my house so I could donate even more to charity when I saw you posted this article. Luckily, you somehow managed to convince me that perhaps giving away all of my possessions is not a good idea. For that, Mr. Oppa, I thank you.

    Like

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