Why is the world always going towards the rich getting richer and the poor getting poorer?

economy : Why-is-the-world-always-going-towards-the-rich-getting-richer-and-the-poor-getting-poorer

Answer by Varsha Singh:

Introduction

This  is commonly used aphorism  to describe Economic inequality
"The richer gets richer and the poor get poorer"
Somewhere derived from the Karl Marx Law of increasing poverty, a sort of criticism to Capitalism.(open market system)

There are several reasons for the cause and trust me the process is cyclic.
Truth is we can never get an absolute economic equality .There will  be always some poor.May be we can balance in between but can never eliminate the fact.
What is actual definition of being poor?
The one who is destitute to survive with basic needs in Life? What if I took a Developed Country into an ideal situation where everyone can help themselves with basic needs or if they cannot Government provides them.
So will you call them poor or not? May be an American poor per day earning will be high from Indian poor?
Being Poor is a relative thing in this context now. Right? Agree?
But let me put some reasons why this happens.We will discuss about them later on comments if you want to.
Firstly let me share a video which I luckily came across Youtube.
https://www.youtube.com/watch?v=vDhcqua3_W8
There are both ethical and political reasons for wanting to address the growing gap between rich and poor, according to experts ranging from economists and political scientists to social workers and activists.
Those with wealth look at money as being in abundance. They understand that money comes to them by providing products or services that people want to buy. So, they serve as many people as possible that are willing to provide them the dollars they desire to maintain their economic status. The rich don’t spend…they invest.The more they invest , the probability of being richer increases! Really ?
Then what happens in recession period?Yes! Probability is an answer here. It is possible to suffer from loss even after investing but risk have to be taken in market.If not taken Money won't grow.
Moreover during recession also , there are incredible deals on automobiles as an example. Therefore, they do one of two things. They make the purchase at a severe discount, or invest in a business, wait to have enough profit from that business to buy the car, and then year after year continue to profit from that business. Many purchases by the rich are also well thought out as to it’s resale value over time. The wealthy use credit when their rate of return is higher than the rate of interest they are being charged. This means that the wealthy have the ability to profit from borrowed money.
To the rich, a recession is full of opportunity and even more wealth in the future.

Few reasons why it is considered richer gets richer?

1. The rich can find out while poor cannot (mostly,exceptions are excluded here)
 An average villager in India does not have an MBA and wouldn't be able to afford the tuition at any college or university, even assuming that they had received enough primary education to be able to read the textbooks. They will not know what a stop order or an IPO is, and they'll probably be lucky if they understand even the fundamentals of a stock exchange.
For the most part, poor people don't know what's going on, except in their immediate vicinity. They don't know how rich people make money, and they don't have the resources at their disposal to find out.

2. The rich can invest
As I said earlier a rich person is likely to take more risk and earn more profit in comparison to poor/average person.

3.The rich can travel and diversify opportunities.
Take an example.If reliance industry fails to earn more profit in Clothing (Reliance trends) they can manage  or balance it in some else products/Industry or what so ever.So may be they suffer from loss in some industry or in some investment but they make up it in some other.

4.The rich have more power and can bribe.
This is mostly done in countries with unregulated capitalist economy.They tends to support Government with money and takes privilege in terms of expansion of business in many ways.

5.The rich can look good and live more.
Yeah! They can have various surgeries and facials to look smarter ,because they can afford it. They can get treatment for diseases easily because of money power.

Now in the end of my answer I would like to drag the conclusion in some other way which needs to be ponder upon.
The rich gets richer and poor gets poorer is likely to be a  problem of Capitalist Economy.It is not an characteristic of such an economy .
So there is always an possibility of some poor person to cope over all such negativity and shine as a richest person. Same goes with nation too.

PS: If you consider Quora too ,you see 😛 the richer person in terms of more followers gets more up votes even in ordinary answers,where as poor person like me get less even on Excellent one from my side 😛 😀 (No offence,just fun)
But still I can hope for a day when a bubble will burst out and I will start getting many more followers and up votes (just a possibility) 😀 😀

Source:Why The Rich Get Richer, the Poor Get Poorer & the Middle-Class Stay Stuck in Recessions
Wikipedia

Thanks for A2A.
I hope it helps.

Why is the world always going towards the rich getting richer and the poor getting poorer?

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