24.6 Private Enterprise And Reduction Of Poverty
From The Reality Of Welfare by M Cooray (1996)

Under capitalism and under every other system there is poverty. Critics make much of the poverty in capitalist countries - more accurately semi-capitalist countries (since the influence of socialist ideas is pervasive in all capitalist countries) but poverty has existed and will exist under any system as long as human beings are different and ambitious to varying degrees. Where capitalism has reasonable scope for operation there is less poverty and better living standards than under any other system. Capitalism will operate to reduce inequality and poverty unless subverted by radical socialism and violence. See further the above quotations from Friedman and Williams in section 3.

The statistics in 24.7 emphasise that the economic support for government bureaucracy and regulationary programs falls on the relatively lower income groups. The reason is that they are the more numerous. The relatively few wealthy persons constitute a minute fraction of the total population. Likewise their considerable combined wealth is insignificant compared to the total income of the lower income earners.

The consequence is that regulatory programs and welfare which benefit the relatively wealthy, must be paid for by the relatively less wealthy. The main winners from Affirmative Action and Anti-discrimination policies are relatively affluent upper middle-class women. The costs of these policies are borne by the lower income groups. The operation of Medicare, the education system, environmental policies and many other government programs endure to the benefit of the wealthy and the relatively wealthy and are paid for by the lower income groups.