A world of Unequals
Shiwang Singh – Student, Kautilya
A few days after the imposition of the nationwide lockdown to restrict the Covid-19 virus, in the city of Delhi and other metropolitan cities, there were swarms of migrant workers out on the roads. One of the many public reactions to this incident was that of shock and disbelief. The daily wage earners, on whose hard work the urban centers develop and thrive, embarked on their journey back to their ‘homes’ (sometimes as far as 1000 km) on foot. It exposed the alienation of a significant section of the population from the polity. The policies we make, the issues we discuss, and the dreams we see are perhaps not representative of all those who also constitute this country. This event was a manifestation of the unsustainable level of inequality in our society. Oxfam International has reported that the top 10% of Indians hold 77% of the total national wealth.
The trend of rising inequality transcends the barrier of national borders. The bottom 50% in every large region of the world, except for Europe, earns less than 15% of the national income. Interestingly, from the 1940s to the mid-1980s, there were trends in reducing inequality in many countries worldwide. However, after a period of lowering the growth rate, the institutions and policies which kept inequality in check were blamed for the slow growth. There was a concerted effort to change the existing economic policies. The Reagan – Thatcher era in the 1980s espoused neo-liberal policies in the United States of America and the United Kingdom. Neo-liberal policies promote a free market economy and favours the transfer of power of controlling the economy from the public sector to the private sector. These policies advocated for deregulation, privatization, and lower progressive taxation. It became a dominant strategy in many developed and developing countries and international agencies like International Monetary Fund, World Bank, etc. The neo-liberal policies certainly have contributed to increased economic growth and employment opportunities. It was also argued that inequality would reduce when the world will become richer. However, in reality, a few sections of the population have benefited disproportionately compared to the larger section of the population, and the levels of inequality have increased significantly. A closer scrutiny reveals that the present structure of the market-based economy does not address systemic poverty and other forms of discrimination like racism, casteism, etc. These structural issues hinder equal access to the benefits of the free market.
In 1991, India adopted neo-liberal policies when it opened up its economy to the world. The experience in India was not different from the other parts of the world. While the economic growth rate increased, at the same time, income inequality increased significantly. In India, the indifferent attitude towards the ills of wealth accumulation is holding back our country from becoming more prosperous. There is a lack of belief in the concept of shared prosperity. We failed to become a development state and ended up becoming a compensatory state. When the states fail to improve the lives and capabilities of citizens significantly, it overly relies on cash transfer schemes and subsidies. These policies might give some relief to the beneficiaries but are highly inadequate to mitigate the high level of inequalities. The recent Covid-19 pandemic has further marginalized those on the fringes while the rich few further accumulated wealth. The economic slowdown aggravated by the pandemic has resulted in high unemployment. The countries are becoming richer while the governments are becoming poorer. Political populism is on the rise, and investments in the sector of research, education, and health are getting inadequate attention. The consequences of global warming and other events of climate change will be devastating, particularly for the poor.
The institution of caste, regionalism, patriarchy and other social markers create a hierarchal society. The economic inequality combined with the complex social realities is a formidable challenge for us. It is imperative to consider social inequalities while making comprehensive economic policies. While holding on to existing privileges and choosing to stay silent, we keep ourselves unknown to the possibilities of a better and sustainable life and livelihood. Historically, we are witness to events of unrest against the backdrop of any societal crisis. Rationally we should take lessons from history and not wait for any undesirable circumstances. Instead, we should start acknowledging the existing fault lines and start working towards an equal society. After all, as Pope Francis has said, “humanity is served by wealth and not ruled by it.”