Question

There is a single line in Towards the End of Poverty that states, “Take a bow, capitalism.” Why should “capitalism” take a bow in your opinion? Please support your answer.

Answer 1

If we talk about capitalism,it is basically focusing on market.Here production is the main important factor.

Capitalists focus on more and more production and surplus and profits are earned from it and capitalists dont keep that profit for himself.They re-invest that profit back to the production and enhancement of market structure.Hence in capitalism,more production and reinvestments take place and obviously investment generates income.Hence in some ways it has some positive correlation with poverty in this way.In capitalism,price is the important factor.Producers look for the profit and consumers look for the best choices and then in this way an equilibrium is achieved which balances the market.

A major drawback of capitalism is that most of the profit goes to the upper section and which can lead to inequality but atleast more production will lead to mor einvestment ,more employment,more income .More consumption will lead to more production,again more investment,again then employment.Hence there will be this never ending circle and poverty can reduce if markets are left without government intervention according to capitalism.