Global Economic Inequality and Challenges to Capitalism

Global economic inequality has reached unprecedented levels in 2025, posing significant challenges to the capitalist system that has dominated the world economy for centuries. This paper examines the current state of wealth and income disparities worldwide, drawing on data from organizations such as Oxfam, the World Bank, and the World Inequality Database. It highlights how the richest 1% have accumulated vast wealth—over $33.9 trillion since 2015—while billions remain in poverty. The analysis explores structural factors exacerbating inequality, including inheritance, cronyism, and monopoly power, which extract resources from the Global South to benefit the elite in the North. Challenges to capitalism are discussed, such as threats to the social contract, environmental degradation, and rising authoritarianism, which undermine the system's legitimacy. Through a literature review and data analysis, the paper argues that without reforms like progressive taxation and wealth redistribution, capitalism risks collapse or transformation into oligarchic rule. The objectives include assessing inequality trends, identifying capitalist vulnerabilities, and proposing policy solutions.