Geo 277

A characteristic of man that separates him from the majority of the animal world is his organization of social and economic systems. Man, however, retains traits of his evolutionary ancestors in the form of self-preservation and greediness. While many political, economic, and social systems try to eradicate this form of natural selection, capitalism and related economic structures preserve social inequality in many forms. Historically, this preservation of financial inequality has achieved a higher standard of living generally than systems originally formed and employed to achieve just that.

There are specific economic factors of capitalism that enables it to make life more civilized and beneficial for its population. By definition, capitalism is an economic system controlled chiefly by individuals and private companies instead of by the government. Inequality is based by mostly two things, a person's home and workplace. People are free to decide how they will earn and spend their income. Companies may choose which goods and services to produce and how much to charge for them based on the wants, or demand of the people. This regulates the amount and kind of products produced to accommodate the population. Because of this emphasis on economic individual freedom to become the wealthiest of one's nation, many inequalities form in the distribution of wealth.

As many citizens are able to acquire their needs to survive and eventually purchase luxuries, some citizens are not able to support their own existence and eventually die of cold, starvation, or other such causes. "Ronald Reagan explained that the United States has an abundance of food, but the hungry are too ignorant to know where to get it" (Kodras 67) Although this is viewed by many as inhumane, capitalist societies achieve a higher standard of living than other socialist and communist societies. This also provides motivation for the unemployed to find jobs, as they are not supported by others in a capitalist society. Historically, communist societies achieved less unbalanced financial inequality, but the standard of living was lower than that of capitalist societies. The complexity of human behavior and the vastness of one society is too great for human planners to address. Although one may have had a job for sometime, he/she may still be replaced by a more efficient worker. This code of work ethics forms higher levels of competition, boosting work quality and production. Many privately owned companies exist in capitalist societies. The population is not vast enough to carry all of these companies.

Everyone needs a house. Rich people poor people; all people are included. This is a problem, because housing costs a great deal of money. Poor people that can barely afford food and clothing also have a hard time finding reasonable housing. As a result, some live in unsafe and unhealthy conditions that are badly in need of repair. Poor people live in the central city for two different reasons. First, the farther away that you get from the central business district, the higher your transportation costs to get to your job (assuming that the job is located in the CBD). If you can not afford to commute to your work, you will be unable to keep your job, making you worse off economically. Therefore, you would chose to locate your residence close to your place of employment (closer to the CBD) in order to reduce your transportation costs. IF you live close enough to your place of employment, you may not need to use any form of transportation other then your feet, which doesn't cost you anything but your time.

The second reason has to do with where new houses are built. New homes are built on land that was previously undeveloped, usually located on the outer edge of the residential district, furthest away from the central business district. The wealthiest people move into these new homes, leaving the upper middle class to move into their old residences. This "trickle down" effect does hold true at the bottom end of the scale as well. The poor that are on the margin of being considered middle class will be able to afford to move into nicer houses.

The poorest people are left to keep occupying the oldest homes, located in the inner city, thereby keeping the inner cities poor. Now, it seems terrible to allow people to live in low quality homes, and some people feel that the way to get poor people into nicer homes is to require the building owners to upgrade their buildings. First, in order to revamp the building, the owner would have to charge the tenants a higher rent to pay for these changes. The poor are barely able to pay the rent at the current price, and most will be unable to afford a rent hike. Upgrading these buildings would place them in a different category (they would be fit for middle class tenants, rather then remaining housing for the poor), forcing the poor to look for other, rare housing that they can afford.

To help reduce the problem, the government has implemented programs to ensure everyone has access to adequate housing. One of the government's ventures includes employment and job training programs. By offering poor people these services, they are better able to obtain the funds needed to live in decent housing through employment. The government has also introduced housing subsidies to the poor, to better equip them to pay rent for sanitary living space. Section 8 certificates are given to individuals who are considered to have very low income to help them pay for housing. The recipient of the certificate is required to contribute 30% of their income towards housing costs, while the government writes a check for the remainder. There are also housing certificates that work very similarly to the Section 8 certificates. The effect that these vouchers have on the market is a negative one. By giving people 'free money" for housing the government is pushing up the average market price of housing. These vouchers shift the demand curve for housing to the right. The supply of housing does not change therefore the new equilibrium is a higher price then without the vouchers.

Another option is public housing projects. This could be a decent idea, but the way that most projects are set up make them doomed from the start. Low-income people are put into these apartment-like complexes, concentrating a large amount of poorer people in a small place. These people do not own their units, and because of this, they treat them poorly. Without property rights for your residence, you are not likely to upkeep the structure, or its contents. It is for this reason that housing projects are in such poor condition. In addition, with the high concentration of poor people, there is also a great deal of crime within the projects.

Most taxpayers are in favor of public housing rather then housing vouchers. This is because