Is Inequality a Fundamental

Capitalism fundamentally values economic competition and rewards those who succeed in it. However, it also ultimately leads to an unequal distribution of capital and power in society, creating an array of different classes. That is, while a free market system naturally creates competition, when such competition is left uncontrolled, it disproportionately benefits those who have the access to the most resources, such as in access to generational wealth. The question then arises: is capitalism fundamentally prone to breeding inequality, and is it only fair in the theoretical sense? If not, what can be done about it?

Capitalism is often portrayed as a meritocratic system in which success is determined by one’s abilities and effort. However, in reality, there are numerous factors that can influence an individual’s success or failure in a capitalist system, beyond just merit. Some of these factors include inherited wealth, privilege, differing access to education and resources, ethnic discrimination, and nepotism. It is far harder for a first-generation immigrant with incredibly little money, for instance, to earn the same income and live the same lifestyle as a majority ethnicity male who inherited his family’s business. These factors can create barriers to entry and limit competition, reducing the merit-based aspect of capitalism. This can result in the unequal distribution of wealth and opportunities, where some individuals and businesses have a greater advantage over others, regardless of merit. Therefore, while capitalism can incentivize individuals to work hard and strive for success, it is not a purely merit-based system, and the outcomes can be influenced by various systemic and societal factors.

Such economic inequality could be solved, however, in alternative economic systems to capitalism. For example, a democratic socialist system could better holistically serve society, by allowing the government to equally distribute the resources and products of the economy, particularly to those who need said resources the most. A notable example of democratic socialism working lies in the case of “Red Vienna,” a nickname given to the capital of