Resolved: Current American Economic System Need Reform to Decrease Inequality.

The reason poverty exists in the first place is because of structural dynamics of capitalism that require exclusion. Colonialism, neoliberalism, and resources exploitation are all symptoms of order that privileges profit over people. History is on our side capitalism has produced massive poverty in Africa because the functioning of the global economy require the subordination and exclusion of the vast majority of the population for the benefit of the wealthy " nature of capitalism requires winners and losers Magdoff "3 [Harry, Approaching socialism] There is a logical connection between capitalism"s achievements and its failures. The poverty and misery of a large mass of the world"s people is not an accident, some inadvertent byproduct of the system, one that can be eliminated with a little tinkering here or there. The fabulous accumulation of wealth"as a direct consequence of the way capitalism works nationally and internationally"has simultaneously produced persistent hunger, malnutrition, health problems, lack of water, lack of sanitation, and general misery for a large portion of the people of the world. The difficult situation of so much of humanity partly occurs because the economic system does not produce full employment. Instead, capitalism develops and maintains what Marx called the reserve army of labor"a large sector of the population that lives precariously, sometimes working, sometimes not. These workers might be needed seasonally, at irregular times, when there is a temporary economic boom, for the military, or not at all. In the wealthy countries, members of the reserve army of the unemployed and underemployed are generally the poorest, living under difficult conditions including homelessness. Their very existence maintains a downward pressure on wages for the lower echelons of workers. (For a full discussion, see Fred Magdoff & Harry Magdoff, "Disposable Workers," Monthly Review, April 2004.) In the countries of capitalism"s periphery there are several factors at work that maintain such large numbers of people in miserable circumstances. Part of the story is the wealth extracted from the countries of the periphery when repatriated profits exceed new investments and natural resources are exploited for the wealthy core countries. Also, banks push loans on countries resulting in even more extraction of wealth from the periphery through a system of debt peonage. More and more, the people of the periphery serve as participants in the reserve army of labor for capital from abroad as well as for their own capitalists. The labor forces of many former colonies were created purposefully by breaking up their societies and their way of living. One way this was accomplished was to require that a tax be paid, compelling people to join the money economy. The change from traditional land tenure patterns to one based on private ownership was another way colonial powers undermined the conditions of peasant communities. And as many people are pushed from the land and into urban slums in the periphery, there are not sufficient jobs to absorb the workers, creating a huge humanitarian crisis.5 Additionally, the power that goes along with wealth allows the manipulation of the political and legal system to benefit continued accumulation at the expense of the sharing or redistribution that might have occurred in more "primitive" societies. The wealth of the rich countries at the center of the capitalist system depends heavily to this day on the extraction of resources and riches from the periphery. "continues" Capitalism, through a variety of mechanisms"from outright robbery and colonial domination in the early years to the imperialist relations in its more mature version"continues to reproduce the wealth of the core and the underdevelopment of the periphery. It also continues to produce and reproduce a class structure in each country"including a servile ruling class in the periphery with their foreign bank accounts and faith in U.S. military force. The production and continual reproduction of a class structure, with an always present reserve army of labor means that there will always be significant inequality under capitalism. Hierarchy and classes mean that differences prevail at every level and with a large overwhelming number of people with little to no effective power. The distribution of wealth in the United States indicates the extent of inequality. The bottom 80 percent of the people own less than half the wealth that is owned by the top 1 percent, and the bottom 40 percent of households own 0.3 percent of the total wealth (table 1). Differences also persist between regions of countries and among different ethnic groups. For example, in 2002 the average family net worth of whites ($88,000) was eleven times greater than for Hispanics and fourteen times that of blacks ("Wealth gap among races widens in recession," Associated Press, October 18, 2004). While only 13 percent of white families had zero or negative net worth, close to one-third of black and Hispanic families had no net wealth. Average family incomes of blacks and Hispanics in 2000 were approximately half that of whites. And significantly fewer black males are in the labor force than their white counterparts"67 versus 74 percent participation rates, respectively (2005 Economic Report of the President, http://www.gpoaccess.gov...). Little needs to be said about the huge difference in national wealth between the highly developed capitalist countries and those in the periphery. While the average developed country"s per capita GDP is approximately $30,000, it is around $6,000 in Latin America and the Caribbean, $4,000 in North Africa, and $2,000 in sub-Saharan Africa. But these numbers hide the worst of the problems, because per capita GDP in Haiti is $1,600, in Ethiopia it is $700, and in six countries in sub-Saharan Africa average per capita income is $600 or less. The wealthy countries with 15 percent of the world"s population produce 80 percent of its GDP. On the other hand, the poorest countries with close to 40 percent of the world"s population produce only 3 percent of its wealth. Poverty: Uneven distribution of wealth creates deprivation of resources to 80% of the population Magdoff and Magdoff 5 (Approaching Socialism Fred is a professor emeritus of plant and soil science at the University of Vermont in Burlington and a director of the Monthly Review Foundation; Harry worked for the United States Department of Commerce http://monthlyreview.org...) Capitalism, with a number of political variations, has produced more goods, inventions, new ideas, and technological advances than in all of previous history. During the approximately two and a half centuries of industrial capitalism there has been"with the important exceptions of severe recessions, depressions, and wars"nearly continuous expansion of the leading capitalist countries. But what has this enormous progress and development of productive capacities created as far as the living conditions and relations of the people on this earth? On the one hand, there is a significant portion of the world"s population, perhaps 20 percent, that lives in comfort with many opportunities for education, housing, and purchasing a variety of goods almost at will. But within this generally well-off group there is a very uneven distribution of riches, with the wealthiest controlling huge amounts of wealth. The wealthiest 691 people on earth have a net worth of $2.2 trillion, equivalent to the combined annual GDP of 145 countries"more than all of Latin America and Africa combined! The richest 7.7 million people (about 0.1 percent of world"s population), with net financial worth of more than $1 million, control approximately $28.8 trillion"equivalent to 80 percent of the annual gross domestic product of all the countries of the world. This is more than the combined annual GDP of all countries of the world minus t