Why Do the Rich Get Richer

 Why Do the Rich Get Richer:

If you are anything close to being an average human being on the planet, the question of “Why do the rich get richer?” has undoubtedly crossed your mind on more than one occasion.

Those who are financially well-off often use the wealth and privilege that they have to get insider information, special or additional knowledge which in turn helps them to generate more of that money, privilege, and closed-group information for themselves.

How does Monopoly — the board game — evolve? Each player begins the game on a level playing field, but as soon as a player begins to accumulate properties on the game board, all of that changes. When a player has control of a property, they can start to build hotels and charge the other players rent when they land on their properties. That player can then take the money they receive from the other players and use it to buy more properties and put more hotels on the game board. This makes it next to impossible for the other players to catch up and greatly increases the likelihood that the hotel-owning player will win the game. 

The other side is true as well; the poor also get poorer. Poor kids usually have access to the worst education, and thus the worst jobs and income levels. Their poverty is reinforced at each stage of life. People who do not have a lot of money are either unable to qualify for loans or must pay a disproportionately high-interest rate to the well-off — who collect the money. This keeps the poor from being able to make investments and improve their futures like the wealthy can. People with low incomes often are unable to own their own homes. They pay rent to those who can afford to own property. Tenants supply landlords, whether with a stable income source or enough to buy a new flat for more people to rent. Real-life Monopoly, folks.

The poor tend to pay a greater percentage of their income to taxes and healthcare. Wealthy individuals and corporations have access to attorneys who can help them find loopholes in the tax code and avoid paying a comparable amount of their income in taxes. They are also able to lobby government more to have their interests represented and to receive tax breaks.

How do you break out of the trap of “success to the successful?”

Sometimes it is possible to move, adapt, or evolve to escape competitive exclusion. Businesses can diversify themselves with a new product or service. Itis possible to keep the “rich get richer” phenomenon in check if there are other feedback loops in place (like antitrust laws) that keep anyone business from completely taking over the marketplace and driving out all competition.

Diversification can offer an opportunity to change the game and allow those who are losing to possibly be able to become competitive once again. Havingantitrust laws in place to keep businesses from completely eliminating all competition. Finding ways to limit some of the advantages of those with power and giving them to those without through unions, scholarships, or financial assistance; and offering rewards to winning competitors that will not impact future successes in the competition, are all possible solutions to breaking free from the system trap called “success to the successful.”