The University of North Carolina at Charlotte

Inquiry Project: Synthesis Paper

S. Wyatt Shely

UWRT 1103-037

Ms. Caruso

October 6, 2015

Shely

S. Wyatt Shely

Ms. Caruso

UWRT 1103-037

6 October 2015

Synthesis Paper

Poverty is an issue that affects humanity on every continent of the globe. It strips people

of their dignity, deprives them of basic necessities, and cripples their ability to flourish in

society. Even in the twenty-first century "poverty remains a global problem of huge proportions.

Of the world’s 6 billion people, 2.8 billion live on less than $2 a day, and 1.2 billion on less than

$1 a day" (World Bank VI). Although it would be ideal to totally eradicate poverty’s existence,

the first step is to identify the most effective and efficient ways it can be reduced. Socialism is

based on government ownership of production and distribution, while capitalism is based upon

private ownership of production and distribution. These two contrasting systems of government

develop opposing ideals within their societies’.

When assessing strategies to decrease poverty, capitalists are critical of “top-down

government funding as a strategy” (Shirima 2). They do not believe that it is effective to

distribute money as hand-outs to those in need. There is evidence that supports this claim.

When President Johnson was President, there was an incredible amount of money being spent on

government programs aiding the poor, “and the poor stayed poor” (Stossel par.3). Perhaps a

more successful method would be to utilize privately owned charities that are locally based. The

privately owned territories are more acquainted with the problems connected to poverty,

therefore will be able to address the problems more productively.

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Economic growth is critical to escape poverty (United Nations Development Program).

In a capitalist society, economic growth is created from the private sector through the formation

of new businesses that provide jobs and stimulate the economy. The best way to do this is to

direct policy efforts “towards promoting innovation and entrepreneurship” (Shirima 10). When

people feel as though though they can create a business, the urge to work and climb oneself out

of poverty is enhanced. Also, as people begin to open up new business, more jobs begin to be

created, which leads to more wages being paid. Capitalists believe that entrepreneurial

economies are vital for the reduction of poverty. Countries that support entrepreneurial efforts

experience an increase of development within their economy. The constant filtration of non-

beneficial businesses along with the birth of new innovative businesses adds a sense of

competition to pro entrepreneurial economies. This economic activity provides a copious

amount benefits for a society from an increase in the number of jobs, to an enlivened

entrepreneurial spirit that anything is possible if one puts forth the effort. One might sum up that

the capitalist strategy of minimizing poverty is to promote entrepreneurial efforts to create

positive economic activity such as creating jobs, and to keep the government out of the private

sector – including privately owned charities – in order to support the more effective private

sector.

Socialism is quite different from capitalism. In a socialist society, there is the promotion

of "freedom and opportunity" to everyone through the collective ownership of factories and

production. This allows for everyone in society to share the benefits of production, rather than

the private owners of industry in a capitalist society reaping the profits (SLP). Governments that

are associated with socialism provide free healthcare to all of their citizens, provide free

education, and have substantial welfare systems. The way the governments pay for these

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expenses is through a higher taxation. It is important to know that in today’s society there is not

a country with a government that is completely capitalist or socialist. Most governments in

today’s society are a combination of multiple kinds. It is understood that the United States is

primarily capitalist in nature, but there are socialist aspects such as welfare, the military, and the

FDA. Primarily socialist countries include Canada, Norway, Finland, China, Denmark, and

Sweden. The reason that these countries are identified as socialist leaning governments is the

fact that they provide governmental policies such as free healthcare and education. Many

countries that tend to have more socialist policies have extremely prosperous economies such as

Norway. Not only is the Norwegian government providing free healthcare to all of its’ citizens,

but they are also maintaining a prosperous economy (Gilbert 2-3). Many countries that are noted

as being the most prosperous are Scandinavian countries (Norway, Denmark, Finland, and

Sweden) with socialist style governments that focus on “generous welfare benefits and lots of

redistribution of wealth”, yet they maintain civil liberties (Helman sec. 2 par. 9). It is incredibly

intriguing that people have two polarizing points of view on which governmental system is the

best for reducing poverty. Socialists supporters give a large amount of faith and control over to

the government, while capitalist supporters have little faith in the governments effectiveness.

Capitalists side with the power of the private sector’s ability to create new enterprises which in

turn creates wealth.

The primarily socialist Scandinavian countries have some of the lowest poverty rates in

the world (Miller par. 1). As time has progressed, the countries have adjusted their tax policy to

appear more like that of a capitalist country. The Scandinavian countries, with the lowest

poverty rates in the world, have combined the “best of capitalism and socialism” in order to

reduce poverty to a record low (Miller par. 5). Another important note of these Scandinavian

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countries is their motive to promote entrepreneurial efforts. It seems as though the best method

to reduce poverty is to use the capitalist ideal of promoting entrepreneurship and innovation into

society to strengthen economic development, while simultaneously providing socialistic services

such as free healthcare, free education, and a strong welfare system in order to provide for

citizens’ basic needs. This creates a sense of security and inspiration within a society that

promotes growth.

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