: Why does the rich gets richer and the poor gets poorer?
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There are several reasons why it is hard to climb out of poverty relative to rich people.
Wealth benefits wealth. With having money you have the ability to do things like invest, buy properties, own companies.. all of these earn their own income.
While people in poverty are just struggling to get by, buying small packages which actually have a higher unit cost than bulk, or being stuck without clear ways out.
One famous example of this is the “boots theory”,(copied wikipedia and an excerpt from Terry Pratchett’s 1993 *Men at Arms*)
>The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while a poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. This was the Captain Samuel Vimes “Boots” theory of socioeconomic unfairness.
While this is not an all encompassing explanation since inequality economics is a very broad and deep topic, this is an example of issues that barely getting by cause. A modern example I think is looking like Electric Vehicles. Gas is currently expensive. Sure you can get around that by having an EV like a tesla or plug in hybrid, but if you don’t have surplus to just go out and buy a 30k+ vehicle or have charging infrastructure for it, you’re still stuck with a gas vehicle and paying for gas.
Additionally there are just more opportunities for people with surplus capital. They can afford to take a risk, they can afford to send people off to college, to levy social connections, to take a risky investment.
There are the terrible “give a rich man $1000 and 6 months, and he will return with $10,000, and give a poor man $1000 and it will be gone immediately” memes/graphics/tweets… because things like the above.
If all your needs are met, surplus money can just go off and get put to work making things more efficient, or just stuck in a bank account somewhere stacking interest. Someone with means can yolo a thousand into a meme stock or crypto, and not be upset if they lose it but still collect the gains, while someone who has no extra surplus must use whatever income they have to survive.
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