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If this were the way the world worked then private charities would not exist. It makes some people feel good to donate money to charity and so it serves their self interest by making them feel good. Its a complex system where the gains of our money is not always material and so oversimplifying it in this way does not represent the real system. The beauty of capitalism is that individuals are free to donate as much or as little to whichever cause they see fit. The choice is up to the individual not the government. If you don't like the way your money is being spent, you have every right and ability to withhold your money from that organization and distribute it to other outlets. If the organization wants to keep receiving your donations, they must use the money wisely. In effect, its competition for charitable donations which encourages charities to improve and use their donations in the best possible ways. Otherwise, they loose donations.
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Private charities are a drop in the bucket when compared to the government. And their effects are minimal at best. A huge amount goes to providing housing in extreme weather and food. Living in Chicago, those nights where it is extremely cold, all over you can see messages from the shelters reminding all that there is more than enough room. These charities ensure that the extremely poor don't die, and thats about it. At the point where our countries governing body and entire economic system are profit driven and view human life as a means to the end of profit, it outweighs the small example of charity. If the government were to cut even 1% of the military budget (so high because of the need to "defend economic interests" (Iraq, Taiwan, terrorism), and because of the extreme power of the defense industry in government), then a HUGE amount of poverty could be reduced, through an array of programs. Unfortunately, the government doesn't represent everyone, they don't represent the interests of the poor, and the minuscule impact of charities will never balance that out.
In a system of capitalism, people will inevitably choose to spend the smallest amount possible on charity while maintaining the standard of living they desire, which is almost always extremely excessive. Charity cannot solve poverty within capitalism.
And what is a portion of charity? Things like "donating to cancer/aids/X disease cure research" that none of the poor would even be able to access. Not saying all charity is bad, but parts of it take money in for reasons besides the poor.
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Things aren't that simple though. It's easy to justify stepping in when you have country A invading country B. When you have a country oppressing their own people, or a civil war, it's harder to justify intervention. Condemning the actions and cutting off relations are just about all you can do. Countries do have a right to govern their own affairs after all.
Besides, you didn't see the soviet union sending troops to stop this sort of thing when they were around. If a capitalist country doesn't take action it's cause capitalism is bad and doesn't care about people who can't make them money? So what's the reason a communist country does nothing then?
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First, Iraq was justified in many ways, a good portion of them ignoring sovereignty. All of the "Saddam is a murderer" and all that jazz denies Iraq sovereignty. We all know Iraq had no WMD's, and had nothing to do with 9/11, thats the official policy of even our own government. I'd rather not get into the messy debate about whether or not the main planners of the Iraq war actually knew they had nothing before going in, since there are no solid facts, just speculation, but if they knew there was no involvement, it would most definitely lean my way, so thats just one potential example. But either way, arguments that deny Iraq sovereignty have been used to justify it.
In response to the second part, the world was an extremely different place back then, a completely bipolar world. And the political atmosphere has changed. Ever since the Rwandan genocide of 1994 there has been the echoing "Never again", yet it's happening right now, and unfortunately there is no powerful truly socialist country around.