Question

Hernando de Soto states, “The constituency of capitalism has always been poor people that are outside the system. Capitalism is essentially a tool for poor people to prosper.” What does he mean? Do you agree? Why or why not? Explain

Answer 1

I agree with the statement. Other economic systems like socialism tend to encourage corruption and benefit people who are attached to the system. However, capitalism is one such economic system which extends economic benefits to the poor as well. Capitalism presents opportunities for all. In capitalism, there is no central planner to distribute resources, rather resources are distributed by the market. People with an attitude to work hard can avail the opportunities presented by capitalism. Capitalism provides the opportunity for social mobility in which poor people participate in the economy and become rich to move upward. Other economic systems fail to provide opportunities for social mobility.