Life and Other Mysteries: College Days: Poverty, Capitalism and the American Dream

Poverty is a situation that millions of Americans find themselves in, despite the fact that they live in one the richest nations. Poverty can be defined as a lack of essential elements needed to survive, such as food, shelter and clothes. There are two views regarding poverty the structural and individualist view. The structural view looks at the causes of why poverty is occurring such as: sickness, education, low income jobs, and discrimination. The individualist view places the blame on the individual, in that, they don't work hard enough, they were not born into privilege, and they are too lazy to get the help necessary to survive. The one fundamental question the individualists leave out: do people honestly set out to fail in life? Do they want to be scrapping the bottom of a garbage can for someone's old food? Who's to say that a person who was born into a rich family should rule over everyone else? This is the way capitalism in

America has

been proven to work. Capitalism essentially exploits workers to produce products, which get sold for a higher cost. The financial profits are then retained by the owners of the company rather then being equally distributed to all of those responsible for the creation of the product. Why is this the case? Shouldn't there be some sort of regulation? With this philosophy in place the inevitable will occur; the rich will become richer and the poor will become poorer.

A simple definition of poverty is an economic condition lacking both money and the necessities needed to successfully live such as food, water, and shelter. (Wikiedia, 2006) The question of how people find themselves in poverty varies: lack of education, health related issues, racial discrimination, divorce, war, crime and natural disasters etc. All of these various causes give a viable reason for poverty; in fact, this would be considered the structural view. The structural view is accepted by Europeans as a way of explaining poverty and why it happens. Their philosophy is that there has to be an explanation as to why so many people are in poverty, surely, they themselves do not want to be in this predicament. On the contrary, the American view is that of an individualist. The individualist approach places emphasis on the person, in that, it must be their fault. However, there is evidence that goes directly against the individualist's view. For instance, the people who are termed "poverty stricken" make about eighteen thousand a year. (Shaw, 105) These people are working hard for every penny they receive by long forty hour weeks sometimes barely making minimum wage. In 1997, the minimum wage was increased to $5.15 an hour. (Shaw, 105) Without an education, most jobs will not offer you the types of salaries needed to break out of poverty's grip. One could then ask, how could a person work so hard and not be able to pull themselves out of the poverty hole. There has been a prevalent misconception about people in poverty and welfare, the individualist approach: they deserve to be where they are and they should not be using governmental money. The fact is that people receiving welfare may receive fifteen hundred to six thousand dollars a year. (Shaw, 108) Fifteen hundred dollars is barely enough to pay for 6 months of groceries, and this does not include rent and other necessary utilities. The idea that able bodied people are sitting around at home enjoying life on welfare is a huge misconception. In addition, it was also thought that there was a financial gain for families on welfare to have a lot of children. About 70% of welfare families have one or two children, and there is little financial incentive to have more. (Shaw, 108) "Half of the families who receive welfare include an adult who works full time and research consistently demonstrates that poor people have the same strong desire to work that the rest of the population does." (Shaw, 108) If people on welfare have the same desire to work and in fact they are, why are they in poverty? After all, the

United States

was built upon the idea that through hard work, courage, and determination one could achieve a better life; a life that would be richer and fuller for everyone, with opportunity according to ability or achievement without limitation. "This is not a dream of motor cars and high wages, merely, but a dream of social order in which each man or woman shall be able to attain the fullest stature of which they are innately capable and recognized by others for what they are, regardless of the fortuitous circumstances of birth position." (Adams, 214-215) The fact that

America

is one of the richest nations and yet one-third of the population, are children found in poverty is a humbling statistic. The children are our future, the American government or better yet the American corporations need to be called into an awakening by helping and investing in children. One necessary change would be to raise the minimum wage, so mothers can feed their children, buy them clothes and be able to send them to school. The fact that parents are working but not able to feed their children gives a reason to believe that the American dream of hard work equaling opportunity is no longer a valid "dream".

Continuing on with the idea of the dead "American Dream" take for example the following scenario: the 13,000 richest American families have a combined income that is greater then that of the 22 million families who are at the bottom of the pay scales. (WNA, 2006) Even more dramatically, the richest 1% of the

U.S.

population makes as much after taxes as the 100 million with the lowest incomes. Among industrial workers in

America

, it is often the case that company CEO's make as much as 475 times that which is paid to the workers who actually produce the products." (WNA, 2006) In essence, these figures represent a horrible injustice that makes a mockery of the principles and ideals our country was founded upon. There is no fairness, in fact, the gap between the wealthy and the rest of society just keeps getting wider. As a practical example, we can look at the Bill Gates, the CEO of Microsoft Corporation; he is worth approximately 28 billion dollars. That could almost if not entirely be the wealth of an entire country! Imagine when Bill passes how much money his children will inherit. The majority of people will be lucky if they inherit anything from their family, much less billions of dollars. In fact, that is how a lot of families in early

America

received their wealth by inheritance of money or a business. Over time, the children build upon the empires started by earlier family members and then you have a select few in the population born with privilege. The privilege I am referring to is a business, which can lead to limitless wealth if in the right industry. There are few companies compared to the population, therefore, this fact leads the wealthy to recruit workers for their businesses.

This gap between the wealthy and the poor can be demonstrated by looking at capitalism. Capitalism is an economic system built upon the notion of profit with little governmental influence or regulation. Under this system, the means for producing and distributing goods are owned by a small minority of people. (WSM, 2006) The small minority of people who own these services are called capitalists. The majority of people would be classified as the working class, who in return for compensation will "sell" the ability to work. (WSM, 2006) It could then be concluded that the working class are being exploited by the capitalists. The capitalists are living off the money made and services provided by the working class. With capitalism working in this manner how can the gap between the "haves" and the "have nots" be bridged? The fact that capitalists can make decisions about how they conduct business without any regulation is a scary thought, as shown in the Enron case. Enron, a fortune 500 company squandered money from investors, stole money and placed it into their own accounts, paid top dollar to their executives, created false sister companies for their debt, created power outages to generate money from owned electric companies, false accounting records, false stock market options and many more infractions. "The new American capitalism that Enron exemplifies has failed to produce the economic justice it promised.' 'Its natural tendency has been to produce oligopolies striving to become monopolies.' 'This has happened in airlines, media, and industrial sectors.' 'It has also produced a huge and morally indefensible transfer of wealth and power from the workers who directly produce wealth to the executives and the stockholders who supply the capital." (Fairbrass, 2006) In the end, when Enron declared bankruptcy what did the employees get? Absolutely nothing! They lost their 401K, stock, their job etc. Who was there to protect the employees of Enron? No one! Unfortunately, government involvement is necessary to some extent, not to interfere with companies per say, but to protect the employees. In fact in 1929 under the Franklin Roosevelt administration, such governmental regulations where placed on companies. "Investment companies, banks and publicly traded corporations were subjected to new governmental regulations to protect people from not only the unscrupulous, but the incompetent.' 'Security firms had to abide by the new rules, banks had to buy protections from small depositors, and insurance companies had to meet minimum requirements to be certified, along with a host of other financial reforms that emanated from Roosevelt's New Deal." (Zweifel, 2006) Over the years capitalists have been working on weakening these reforms, which is the primary reason the Enron scandal even occurred. In essence, Enron exemplified the flaw in the capitalistic system with out governmental regulation.

In response to the Enron situation, I had heard the name being thrown around every time I turned on the television. It wasn't until the movie: The Smartest Guys in the Room that I finally paid attention to what was going on. I use to have a tendency to stay in my own little world and whatever was of interest to me I investigated. I now know the importance of thinking and investigating outside my little "bubble". The tendency to think inherently good about people goes down the drain, as soon as money and power come into the equation; it is as if people lose their humanity along with their minds. I felt horrible for the employees that truly had no idea what was going on and lost their retirement funds and job. The thought of them having to start all over again broke my heart. In addition, it makes me angry to know that Lou Pi for example, could get away free and clear. Where is the justice? I don't see it!

The cause of poverty in

America

can be contributed to many factors, which would include a lack of our government's involvement, lack of community concern, and major corporations getting way too greedy. For example, capitalism would not be so out of control, as seen in the Enron story, if there was a some sort of protection agency which would be to regulate and protect the employees from squanderers; as shown in 1929 under the Roosevelt administration. In addition, the government should raise the minimum wage amount, forcing companies to pay their employees more equivalent to what they are worth. Rather than making their employees work with little rewards and the CEO's and corporations pocketing all the money. For example, insurance company CEO's get paid astronomical amounts of money but what happens to the patient care? They get the bad end of the deal because things are all of a sudden things are "too expensive" even when that treatment offers the best and fastest results. The question here is who is being protected? Unfortunately, the answer is the CEO. This should not be the case we should be promoting the greatest good for the greatest number of people. In particular, John Rawls idea of original position which stated that you go to a place in your mind when you didn't know who you were or what your potential was. Then create a system that is fair for everyone this was a fabulous idea, in that, it would force the economic playing fields to be on an even level across the board. However, the flaw with this is our country has not accepted the principle of total equality, so to implement such a radical change is not a feasible option. A better alternative would be the difference principle where not everyone is equal but the lower portions have more, which ultimately leads into capitalism. It seems as though there is no simple solution except that the government get involved to aid in the poverty problem and individual people and corporations giving back to the community. Perhaps the government can tax a corporation based on total sales as to how much they should give to the community. We know that if a CEO had the choice of giving away some small amount of money or keeping it for himself his choice would be to keep the money. I think our focus as a country should be like that of a wealthy individual who wants to give their good fortune to their children. We should as a country want to help the children out of poverty, by giving them

America

's good fortune after all, the children will be tomorrow's future. If

America

is to be the land of opportunity shouldn't the children be able to partake in all that

America

has to offer?

Works Cited:

Fairbrass S. 2002. Enron and Global Capitalism: Just Business

http://www.jusbiz.org/showpage.php?pagename=shownewsstory&storyid=226(July 19, 2006)

Shaw W. Business Ethics. 2005. Poverty in America, CanadaWadson-Thompson Learning Inc.; 107-108 p.

WNA, 2006. Wealth in America & Poverty and Crime: Why Not

America