Growing inequalities and the Nature

Jun 03, 2016

“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”

― Franklin D. Roosevelt

At the time of attaining independence, the country was largely under-developed with its vast resources, agriculture and minerals being unexploited due to lack of proper direction. And planning offered the only way to achieve a rapid and balanced growth keeping the national priorities in mind. The success of such planned development in both agrarian and industrial sector in the USSR played a part in popularizing the concept of planned development. So the state took an active part in economic and social development, as we committed to have a sovereign, socialist, secular & democratic republic.

The Status
Johannesburg-based The New World Wealth, a research consultancy that tracks the global wealth sector, in its report titled The W20: The 20 Wealthiest Countries in the World, ranked India 10th among the 20 wealthiest countries in the world in terms of private wealth held by individuals. The value of total individual wealth in India - which includes property, cash, equities and business interests - is pegged at $3,492 billion in 2015. Further, as per the new data released by the IMF in its Asian Regional Economic Outlook, inequality rose in tandem with economic growth in both China and India, the two most successful Asian economies after 1990. This is in sharp contrast to what happened in countries such as South Korea or Taiwan in earlier decades. The multilateral lender has based its analysis on the Gini coefficient, a standard measure used by economists to measure inequality. As per the IMF estimates Gini coefficient for India has gone up from 45 in 1990 to 51 in 2013.

Is it an Issue?
Should it be a matter of concern? The answer is definitely yes. Economic inequality can give wealthier people an unacceptable degree of control over the lives of others. And when wealth is unevenly distributed in a society, wealthy people quite often end up controlling many aspects of poorer citizen’s lives. For instance, ownership of a public media outlet, such as a newspaper or TV channel, can give control over how others in the society view themselves and their lives, and how they understand their society. As many of us would agree, workers, as participants in a scheme of cooperation that produces national income, have a claim to a fair share of what they have helped to produce. But what constitutes a fair share?

One answer is provided by John Rawls’ Difference Principle, according to which inequalities in wealth and income are permissible if and only if these inequalities could not be reduced without worsening the position of those who are worst-off. Whether one agrees with this line of argument or not one thing is fair enough, i.e., “if an economy is producing an increasing level of goods and services then all those who participate in producing these benefits including workers should share in the result”. British epidemiologists Richard Wilkinson and Kate Pickett (2009) found a very strong correlation between income equality and societal well-being. In more unequal societies, people are more out for themselves.

What Does Nature Say?
As we all know, nature has no favorites and every plant and every animal has to fend for itself to survive. So that way, there is equality in nature. But it is a fact that, no two plants and no two animals are the same. Each has its own strength and weakness, with exposure to its own set of opportunities and threats. In that sense, there is no equality in nature. Similarly, every human being, like every plant and animal, is unique, with its own set of strengths, weaknesses and opportunities. He/she can imagine a world where everyone, no matter what their strengths and weaknesses, gets access to the same opportunities and protection from the same threats. When the experienced world does not match up to this imagined world, we get upset, demand changes in the world and wish for messiahs/revolution.

Humans can also imagine themselves as special, better than others, and wish to dominate over others, or be feared or respected by others. This imagination makes one feel privileged and drives people to compete and be successful. This is what prevents people from sharing and to dominate feels good. While we all yearn for equality in public. privately the preference is for inequality, i.e., the desire to dominate another, control others, be feared or respected. When we think of equality we talk of positive discrimination and reservations to create a fairer and just world. From visualization of inequality come concepts like meritocracy and free market and political correctness that gag conversations and allows for only one kind of conversation.

What Needs to be Done?
The trickle-down theory stated that economic benefits provided to the rich will help society as a whole, as their extra wealth or income will be invested or spent on the economy, creating jobs, wealth and income for the poor. But the WEF’s study concludes that this simply isn’t happening. A large part of existing inequalities within country results from unequal control over assets. These include natural resources such as land, water, minerals and other fruits of nature, as well as produced productive and financial assets. This increasing concentration of assets needs to be countered by explicit policies to reduce it and spread the access to resources and assets more equally. While considerable controversy surrounds these issues, we should not jump to the conclusion that the treatment for inequality may be worse for growth than the disease itself. Equality enhancing interventions could actually help growth: think of taxes on activities with negative externalities paid mostly by the rich or cash transfers aimed at encouraging better attendance at primary schools in developing countries, as examples.

Our body is a combination of our mind, flesh and the property and privileges we acquire or inherit. And in the cycle of rebirths, the soul experiences different bodies and eventually realizes that it is temporary and the source of all agony. Wisdom lies in looking beyond the body at the soul, and realizing that the soul within us and within all those around us is the same. When this happens, we work towards helping everyone around us, strong and weak, find opportunities and avoid threats, knowing fully well that we cannot change their destiny, or alter their desire, or make the world an equal place.

As rightly said by Walt Whitman, “the greatest country is not that which has the most capitalists, monopolists, immense grabbings, vast fortunes etc., but the land in which there are the most homesteads, freeholds and where no man is made possessor beyond the sane and beautiful necessities.” When we outgrow our desires, we no longer compare and contrast the imagined world with the experienced world. And we don’t crave for a change but simply glide with the change. So let’s do our bit by moving in the right direction.

Dr A Jagan Mohan Reddy
Advisor, HSCRF
Associate Professor (HR) 
Osmania University Campus,