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The Stewardship of Wealth: Successful Private Wealth Management for Investors and Their Advisors, + Website by Gregory Curtis

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Capitalism and Its Contradictions

Karl Marx famously maintained that capitalism contained the seeds of its own destruction, that the exploitation of labor would ultimately cause the emerging, alienated working classes to rise up and crush bourgeois society, replacing capitalist systems with socialist “dictatorships of the proletariat.” Although many of Marx's criticisms of capitalism were alarmingly accurate, he was notoriously wrong in his prediction of its demise. Indeed, free market democracies have proven to be the most resilient of all forms of sociopolitical organization.

In terms of social peace and economic productivity, the determinative question turns out to be not so much whether labor is or is not “exploited”6 or how big the gap may be between rich and poor.7 Instead, what seems to matter is whether or not citizens—including the poor especially—have a real opportunity to improve their condition on an absolute basis. If so, the relative size and stability of the resulting middle classes (the hated bourgeoisie of Marxist theory) will increase rapidly. This is, of course, exactly what has happened in all advanced industrial and postindustrial free market democracies.

In America, as elsewhere among free market democracies, the native8 poor have come to represent an ever-smaller percentage of the population, as poor families have tended to move into the middle classes—or even to become rich—in one or two generations. This phenomenon has occurred because the vigor of free ...

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