Final answer:
Capitalism may exacerbate poverty and inequality due to its mechanisms and focus on property rights and individual freedoms, although historical attempts such as welfare capitalism have sought to address these issues to some extent.
Step-by-step explanation:
Capitalism lacks institutional mechanisms which can lead to an equality of employer to employee. In a market economy, differences in income and wealth are expected due to varying abilities, education, risk-taking, and entrepreneurial success. However, the inherent characteristics of capitalism, with its focus on individual freedom, laissez-faire economics, and property rights, sometimes exacerbate poverty and inequality. Workers in a capitalist system may face alienation and competition, and the wealth gap can widen as the success of businesses often depends on lowering labor costs, which may be achieved through automation or suppressing wages. Despite this, there were attempts in history, such as welfare capitalism, to mitigate these effects by introducing benefits to improve worker loyalty and productivity, which highlights the complexity of the capitalist economic system and its impact on social hierarchies and power distribution.