How Capitalism Causes Inequality

The concept of capitalism has been subjected to a wealth of criticism. The most prevalent criticism is its tendency to cause inequality. Some argue that inequality is an inevitable consequence of the capitalist system, while others believe inequality is not inherent in capitalism but instead caused by human error or mismanagement. In this article, we will explore how capitalism causes inequality.


I’m sure you’ve heard the word “exploitation” before. If not, it’s a simple concept: the act of using something for personal gain. It can be used for good—for example, when we use solar panels to harness energy and decrease our reliance on fossil fuels—but it also has negative connotations when applied to people. In his book The Capitalist Manifesto: A Radically Beneficial World by Charles Eisenstein, he gives an example of exploitation in capitalism as follows:

A corporate executive decides that employees should work longer hours with less pay so that more money can be made by shareholders and executives (the ruling class). This is an example of what Marxists call wage slavery; workers are being exploited by the ruling class because their labor power is being bought at below-market prices while they are forced to sell their labor power under threat of starvation or homelessness if they do not comply with managerial demands.

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Structural violence

Structural violence is one of the most important concepts to understand when it comes to understanding how capitalism causes inequality. Structural violence is the violence that is built into the social structure. It’s caused by unequal access to resources, power and decision-making ability in society.

This can be broken down into two types of structural violence:

  • Economic structural violence occurs when people don’t have enough money or resources to survive (economic poverty). For example, if you don’t have enough money for food or water so you go without those things until death—this would be economic poverty causing death.
  • Political structural violence occurs when people aren’t allowed to participate in decision making processes affecting them (political disenfranchisement). For example, if only rich white men were allowed to vote on laws affecting everyone else even though everyone else also had an interest in these laws being fair—this would be political disenfranchisement preventing equality from happening.
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Privilege is a set of unearned advantages and benefits that are given to people who fit into particular social groups. Privilege can take many forms: it can be financial, cultural, or sexual. The unearned advantage is not shared equally with everyone—some people have more privilege than others. Privilege is a social construct, not a genetic trait: someone who has white skin privilege does not have this because they were born with it; rather they were born into a society that gives them certain benefits due to their skin color and passes on these benefits from generation to generation.

People don’t usually want to think about how much privilege they have or how it affects others’ lives negatively (and vice versa). It’s uncomfortable for us to acknowledge that we may be better-off than someone else simply because of our gender identity/expression or race/ethnicity—or maybe because we’re cisgender instead of transgender or gender nonconforming! But if you consider the ways that people around you are disadvantaged by the systems of capitalism (both historically and currently) then maybe it’ll help you see yourself as part of those systems too–and therefore responsible for helping dismantle them so everyone has equal opportunities in life

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Capitalism causes inequality by exploiting the working class.

The working class consists of people who do not own the means of production. They are therefore forced to sell their labor in order to survive. Capitalism exploits this labor, which is used to generate profit for capitalists.

Capitalists control the means of production and distribution, as well as the means of communication and transportation. These resources are essential for creating products, moving them around on a global scale and communicating ideas across borders. Capitalism allows capitalists to exploit these resources because they own them while workers do not have access to them unless they work for someone else who has access (i.e., a boss).


Capitalism is the dominant economic system in America, but it’s not without its problems. The system relies on a division of labor that limits workers’ autonomy, which then contributes to inequality by perpetuating exploitation between the classes. Capitalism also leads to structural violence against marginalized groups and privilege among wealthy elites.

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