Having lived in China and Germany, I have never heard of a Chinese Dream or a German Dream. Only years after coming to the United States did I learn of the American Dream, an individualistic prospect of living a better life. As portrayed in American culture, the American Dream was supposedly achievable through hard work and perseverance. However, this is not the case, as in order to reach the so-called “American Dream”, talent and proper opportunity are also needed. Hard work and perseverance alone cannot actualize of one’s dream. Those who cannot reach a better life are then overtaken by those who are more talented and more fortunate, pushing them into poverty or economic disadvantage. So why does the United States have the highest poverty rate and income inequality of any developed nation? The answer is that the highly capitalist society of America is designed to benefit those who are intelligent, talented, and lucky, and not those who are not.

Now let’s consider some underlying aspects of this highly capitalist society. The United States has some of the lowest taxes of any developed nation. These low taxes allow for greater opportunity to develop successful businesses. Many people are therefore able to become rich, through use of their talents, hard work, and luck. However, as many do not carry the same talents or fortune, the low taxes provide fewer funds to help the poor. As a result, as the economy develops, the rich get richer, and the poor stay poor. Coupled with large spendings on national defense, the low taxes generate a highly ineffective and ineffectual welfare system. This system tends to encourage the mindset that one can simply live off of welfare, as it sometimes pays more than having a low income job.

Not only do the poor tend to stay poor, but individuals can easily fall into poverty in the precarious environment of the highly capitalist society. People are encouraged to take large risks. They are encouraged (often with government incentives) to take out mortgages and loans, purchase on credit, and spend and not save, all with the purpose to create greater economic activity. However, the problem is that the successful risk-takers are awarded at the expense of those who are not as fortunate. (There can’t be two winners in a risk-based situation, as a risk is not a risk without a loser.) In addition to risk that people can control, the highly capitalist society also carries inherent risks not acquired through individual choices. The most blatant example is of health care. Without universal healthcare, a serious illness can amass huge debts for afflicted families. This risk created by the American system itself can cause those who are hardworking and deserving to fall into economic hardship, bankruptcy, or poverty. Thus, since the rich are able to afford the health care, the economically disadvantaged are again the ones who suffer.

So how can we reduce poverty in the United States or other countries alike? First, we must consider two types of poverty. One type is the people who enjoy an easy life of minimal work and do not have high standards for living. Let them be; they do not need to be helped. The other is people who work hard but are still poor. These people are the result of societal problems that need to be fixed.

Despite all the inherent problems of a highly capitalist society that contribute to a large economic inequality, capitalism should not be discarded, as it bears many benefits (stimulation of scientific and technological innovations, economic prosperity in general, and overall increase in quality of life). The main cause propelling poverty through generations is the lack of proper education. The great majority of people in poverty cannot escape simply because they do not have the skills necessary to find a higher-level and higher-paying job. Education, especially in regions of high poverty, tends to be highly inadequate (low funds, large dropout rates, lower test scores). College is almost out of the question; such an education is far too expensive.

The first step then to reducing poverty and income inequality is to fix the education system: allocate more funds, improve the quality of teachers, and reduce the costs of college educations. By improving education, not only are the ones in poverty allowed a greater chance to escape, but also the value of the people overall increases as well, leading to better job opportunities, higher public funds (for health care, welfare, and education itself), and a general increase in standard of living. However, the effect would not be noticeable very quickly. Instead, reducing poverty would be a gradual process, requiring effective leadership over decades. With improved education, people will have greater opportunity to contribute more to society, and receive more in return. As a result, income inequality will decrease as “education is the great equalizer”.