Unit 7 Questions Flashcards
How are income and wealth distributed in the United States?
Wealth- While the richest 1 percent of American households earn almost a quarter of the income, they also control about a third of the wealth. The next richest 9 percent have 38 percent, meaning that the wealthiest 10 percent share 71 percent of all wealth in the United States.
Income - the highest earning 10 percent of households make more than 28,500 every month. And the highest earning 1 percent with an annual salary of nearly $1,500,000— make about $125,000 a month
How did industrialization affect the class system?
The Industrial Revolution created a new middle class along with the working class.
How were classes arranged prior to the advent of modern capitalism?
Industrialization drew many people out of rural communities, where they mostly worked in small shops and on farms, into cities, where they worked in factories and mines. In return, they received a wage, cash payments given to workers in exchange for their labor.
Describe the features of capitalism.
a two-class system, private ownership, a profit motive, minimal government intervention, and competition
Describe the two main classes in Marx’s assessment of capitalism.
the proletariat, people employed by others who worked for a wage, and the bourgeoisie, the people who employed the workers.
The bourgeoisie owned the means of production, resources that could be used to create wealth (like land, factories, and money to invest).
The proletariat owned only their own labor, the work they could do with their bodies and minds. The proletariat, then, sold their labor to the bourgeoisie, who applied it as a means of production.
What is alienation and in what ways does it operate under capitalism according to Marx?
Instead of growing crops or crafting useful goods with skills honed over a lifetime, workers were inserted into machines and assembly lines, producing whatever their employers told them to make. So neither the profits nor the products workers created belonged to them. Both belonged to the bourgeoisie. This led workers to feel like their labor wasn’t really theirs at all. Marx used the word alienation to describe this feeling of dissatisfaction and disconnection from the fruits of one’s labor.
What is the “crisis of capitalism”?
a coming catastrophic implosion from which capitalism would never recover
In what ways did the Gilded Age align with Marx’s predictions, and in what ways did it not?
In ways that it came true: the top most richest people still owned most of the wealth
In ways that it did not: It wasn’t nearly as bad as it could of been. The new deal introduced government regulation to break up monopolies, enforce honest business practices, and protect workers and their right to unionize.
According to Marx, what would lead to the fall of capitalism, and with what would it be replaced?
First, he argued, the bourgeoisie would set up systems that allowed them to extract wealth from workers’ labor. This would shuffle money upward, enriching the bourgeoisie. Second, the proletariat would become increasingly poor and therefore unable to purchase the goods sold by the bourgeoisie. For a while, their ability to buy things might be sustained by loans. But interest on the debt would be just another way for the bourgeoisie to extract money from the proletariat.
Under this form of capitalism, winners take all. So, the number of bourgeoisie would dwindle. A smaller and smaller number of elites would control greater and greater proportions of the total wealth. With no mechanism to interrupt this cycle, the crisis would inevitably come. Large proportions of the proletariat would default on their debt all at once, causing financial institutions to crash. Poor, debt-burdened, alienated, and growing in number, members of the proletariat would develop a class consciousness: an understanding that they are members of a group with shared economic interests. The proletariat would then rise up against the bourgeoisie in revolution.
What is welfare capitalism?
capitalist economic system with some socialist policy aimed at distributing the profits of capitalism more evenly across the population. A large number of financially comfortable workers emerged as a result.
What is the New Gilded Age, and how is it similar and different from the Gilded Age?
The New Gilded Age is the second, current period of economic equality in the United States. The poor became even poorer, and the rich, even richer.
In the first Gilded Age, the top 10 percent owned 80 percent of the wealth; today, they own 77 percent. In the first, they took home 49 percent of the income; today, they take home 50 percent.
When is economic inequality unfair?
if people have unequal opportunities or insufficient resources to make ends meet
Describe social mobility between economic classes in the United States.
opportunity to move up or down in the economic hierarchy. Under conditions of low social mobility, it’s extraordinarily hard to either lose or gain ground. Under conditions of high social mobility, it’s easier to do so.
Describe how American’s faith in hard work influences our ideas about the poor in ways that do not always reflect the conditions of poverty.
We constantly believe that since the poor is poor, they are lazy and unwilling to work hard
