Capitalism And Capitalism

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Capitalism, as Speth explains, is an economic system that is geared toward accumulation of profit, its tendency to change and expand. Root explains that the developed world has necessary tools to guard themselves against uncertainty and risk. They also can count on social institutions and welfare programs to manage risks. Engaging business activities, developed world is dealing with risk by developing products and marketing, for instance. Developing and marketing new products require capital, and capitalism by nature is geared toward capital accumulation, to make profits. Whereas, as Root points out, the developing nations don’t have enough capital to improve their lives and climb out of poverty. The idea is that a poor nation not being able to invest, the economy does not grow, so they remain poor. According to Root, the wealth gap between the rich and poor nations has widened tremendously. However, it is necessary to also explore other contributing factors for the economy of the developing nations not being able to grow.
However, Root explains that uncertainty and risk are the factors how developed countries have grown rich by turning uncertainty into risk. Of course, the presence of institutions are needed to make the risk management possible. For example, institutions might discourage people to acquire education to learn new skills to engage business activities to accumulate capital (p. 4).
Further, innovation is needed to develop necessary technology for economic

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