Inclusive capitalism is becoming a frequently used phrase to describe a large number of economies around the world. However, in both developing and developed countries, the capitalist system in these places seem to be showing more holes. These economies that claim to support the entire people in a fair way are seeing greater inequalities than ever before.
In its most basic form, capitalism aims to uphold all citizens to the same standards, same opportunities and same rewards.
“[The capitalist system consists of] relative equality outcomes; equality of opportunity; and fairness across generations,” said Mark Carney, the Bank of England’s new governor.
The U.N. Development Programme found that income inequality in developing countries has risen by 11 percent over the past 20 years.
Undeveloped countries using a flawed capitalist system are caught in a bad cycle. The inequality seen in the economy creates a barrier for further development. However, a system that supports all citizens is far more likely to improve than one that focuses solely on the elite. Especially in countries that face severe poverty, if the low-end jobs are not supported by the government or provided substantial pay rates, then people will be less inclined to work in these positions. This deters the people in poverty from attempting to change their situation.
When a country emphasizes the importance of all workers, it provides an investment in its people and their labor.
Problems with capitalism are not contained to developing countries, however. Because 80 percent of countries around the world operate on a capitalist economy, it makes sense that ensuring the principles upon which the ideology is based should be a priority.
At the core of the problem, the effects on society that a person’s occupation has should be taken into consideration when determining pay rates. Often times, those who contribute to society most, such as teachers, nurses and farmers, are the people who are greatly underpaid.
“We should be rewarding those who grow our food and make our stuff, or teach the next generation of children, an amount that reflects the work they have put in, and the value we get out of it,” said writer Deborah Doane of The Guardian.
To achieve true inclusive capitalism, the salary gap between the CEOs and the average worker must decrease. The opportunities for both groups must be equivalent, and the current system does not allow for this equality.
“Inclusive capitalism needs to deconstruct and shed its attachment to the old-style competitive labour theory,” Doane continued, “which suggests that if labour is in abundance, it should be paid cheaply.”
– Hannah Cleveland