The End of the Nation State

Tutorial Essay NO.2
Title: Capitalism creates both wealth and poverty and therein lies the main explanation for inequalities between nations. Discuss.
Capitalism is defined by the Oxford dictionary as an economic system in which trade and industry are controlled by private owners for profit. Indeed, in this system, growth is based on the accumulation of capital, which is detained by a small minority who controls the means of production, and receive a considerable amount of profit, whilst the majority (or working class), only have their labour power, and receive little profits if any. This system has been hugely criticised by authors like Karl Marx and Friedrich Engels, and still is today. So how come it is still in application in most of today’s developed countries? Who does capitalism benefit? And where does it create poverty? Finally, is it the only reason for inequalities between countries? In the first part of my essay, I will look at how and when capitalism creates wealth and poverty, and then see if it is the only reason for the difference in development between countries.
First, we can see that capitalism creates wealth as it works on the principal of a meritocracy. This means that it entrepreneurship, unlike other systems like communism. Indeed, as Mike W. Peng says: `The rise of entrepreneurship throughout the transition economies of central and eastern Europe [...] creates wealth and pushes these economies to higher level of competitiveness’. We can see there that capitalism creates wealth as taking risks, and investing is being rewarded. Furthermore, we can all say that the wealth which is created by capitalism is transnational and very unequal as it allows having poor people in very developed countries, just as there can be very wealthy people in the world’s poorest countries. The countrys success in developing itself depends thereafter on the strength of its state, and its policies on redistribution.
We have seen that capitalism creates...