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Capitalist economies have shown sustained tendency towards economic growth, when measured as an increase in GDP. They have on occasion been through nearly disastrous periods (such as the Great depression), and some have argued that it has only been government intervention that has prevented capitalist economies from collapsing, while others maintain that it was government intervention that caused such disasters. The former argue that it is only government intervention that has enabled capitalist economies to ever grow at all, or even that economic growth in capitalist economies is not due to capitalism itself, but exists despite capitalism - perhaps due to some other reason such as increased scientific knowledge, or some form of ' imperialism'. Others have argued that the natural tendency of capitalism is to continuous growth and that government intervention in the form of subsidies and taxes is the cause of depressions. Yet others argue that growth, or often growth without enough freedom, is a bad thing. Still others argue that modern capitalism has been a disaster because of its other effects besides the growth of GDP. Further discussion on these points might be found in following sections. Nevertheless, good or bad, because of or despite capitalism, it can be seen from history that there has been a sustained tendency for capitalist economies to grow over time.
It should be noted, however, that many economic systems which have existed for significant periods of time have also exhibited economic growth. Thus, although such growth is an aspect of capitalism, it is by no means unique to capitalist economies.
Capitalist economies have shown an uneven distribution of wealth. Typically between 0.5% and 1% of people own more than half of productive capacity, if not half of all wealth. Various studies have shown distributions with the peak in the distribution at or near zero with fewer people owning progressively higher wealth. Common mathematical models of such distributions include power-law distributions, exponential distributions, and mixtures of the two. In these distributions some people own hundreds of thousands, or sometimes millions of times more than average.
The distribution of wealth in capitalist economies is one of its most contentious issues. To properly visualise the shape of these distributions it is useful to imagine what it would be like if some other commonly known characteristic of people were to be distributed this way. If height were distributed in the same way as wealth with the same average height as now, most people would be under 1 meter (3 feet) tall, but you would still see people 100 kilometers (60 miles) tall, if you could see up that far, and the wealthiest would rise well into space.
This seems to strike many people as being unfair and/or dysfunctional, while others don't see it as a problem.
Arguments directed against unfairness or disfunctionality have a tendency to go roughly as follows: Most characteristics of people, such as height or weight, and it might be surmised people's ability to be productive, are distributed according to a bell shaped curve with a peak at the average and few people far on either side. For example, there are very few people who are twice as high as average, or who can run twice as fast or have twice as high an IQ. The fact that capitalism doesn't distribute wealth in a similar fashion must mean either that people do not exhibit their full productivity under capitalism, or that those with greater wealth inherently use the capitalist system as a way of enforcing the "exploitation" of those with less economic power by not fully rewarding employee productivity or by stealing the creative ideas of others, in the form of modern copyright laws which favor the legal copyright holder and not the actual creator. Thus they accumulate more wealth for themselves in a cyclical fashion (as the old statement goes "the rich get richer").
People who don't see uneven wealth distribution as a problem tend to argue that it is associated with, or a byproduct of, the overall increase in total wealth, and often argue that as long as a high proportion of people have enough wealth to live above a minimum standard, it doesn't matter how the remaining wealth is distributed.
Disputes over this issue become entangled with disputes over the roles of cities vis-a-vis their rural supply regions. Jane Jacobs, for example, has expounded a theory that is ambivalent on capitalism-versus-communism disputes, but holds in essence that the dynamism of a city is essential for any lasting wealth.
In "Cities and the Wealth of Nations" ( 1984), for example, she argued that development aid to regions without capital-generating cities of their own is generally wasted, adducing examples from the rural south of the United States in the wake of the Tennessee Valley Authority to Iran under the Shah.
Free market theories are often used in which voluntary economic exchange is seen as leaving both parties better off as both would not be trading unless the outcome of the trade was an improvement for both. According to this view, even if the resulting distribution is not even, at least it is better than if there were no trading.
Another outlook that downplays the blame of capitalism for disparities in wealth distribution is that economic systems are not even the main culprit. The economist Thomas Sowell has attributed factors such as geography, climate, culture, and natural resources as primary reasons for inequity. Alternatively, the claim is made that capitalist economics is not a zero-sum game and that wealth is not "distributed", but actually "created" through innovation, and risk-taking. The writer P.J. O'Rourke has explained this view by comparing the alternative perspective to a pizza where people taking too many slices leaves somebody with just the box. By this way of thinking, the "pizza" (or zero-sum) model of wealth is a drastic oversimplification. In response, critics of capitalism have argued that even if these arguments could justify some economic inequity, they cannot explain the extreme inequality that capitalism brings with it.
Other points of view on capitalism's wealth distribution include:
Further discussion on these points might be found in following sections. While it may be debated as to whether capitalism causes the uneven distribution of wealth in capitalist economies, or whether it is good or bad, it is clear that capitalist economies do have uneven wealth distributions.
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