The persistence of Poverty in Capitalist Countries

Abstract

This article describes the increased rate of poverty in the United States and Europe in the 2000s. Expanding productivity has not resulted in a concomitant improvement in the standard of living of people. Neither classical nor neoclassical theories explain the persistence of poverty in developed countries. First of all, the classical theory of poverty is based on a minimum level of subsistence for human beings, whereas neoclassicals maintain that low wages will reduce poverty. We argue that these ideas are characteristic of the capitalist perspective and that revising Marxian foundations may provide some insight into poverty in capitalism and its current evolution.