What is wealth condensation?

Condensation of wealth is the tendency of newly created wealth to end up in the hands of those who are already rich. As a result, richer citizens tend to have more money to invest in wealth -creating opportunities than poorer people. Condensation of wealth is a phenomenon that occurs in all economies on the free market. Defenders of wealth condensation claim that investors are those who are responsible for creating new wealth and should therefore gain most of the benefits. Opponents claim that the system tends to inconspicuously reward those that are already in favorable positions. This happens in a number of scenarios: bank account deposits, government bonds and shares are all forms of temporary money lending to others while expecting to get money back plus interest. Some forms of investment have a higher risk, but also potential for a higher return. For example, the investor could invest in a starting company, for example, as it speculates that it will be RyBread to grow. If the company is successful, the investor will receive heavy profits.

Some forms of investment, such as savings accounts and government bonds, have virtually no risk. While the interest rate on them is generally low, if it is higher than the inflation rate, it will result in an increase in wealth. However, for investors to earn any money at all, they must have money for investments in the first place. Poor people often have little or no money after their basic housing, food and medical expenses. Without the possibility of investing the poor to miss rewards for investment.

wealth condensation is defended as natural and effective. They say that even if it can expand the gap between Rich and the poor, the poor are still better than without an economy in the free market. In other words, the standard of living of the poor is growing absolutely - a phenomenon is possible when the total amount of wealth increases. TV defendersThe poor in many capitalist countries, especially in the United States, are better than the vast majority of people in human history. In addition, they claim that the middle class of many modern nations lives below the level of life of American, European and East Asian.

Opponents of wealth condensation, on the other hand, often contrast the performance of Executive directors (CEOs) and their employees at the lowest level. CEO often earn hundreds of times the income of the lowest workers under them - it is a criticism of the economic system itself as a contributor to condensation of wealth. Opponents also claim that the rich are able to hold the government office and influence Kir's policies an advantage. This is the criticism of the political system as a contributor to condensation of wealth.