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The Dramatic Rise in Wealth Inequality

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Oxfam has just produced a report in which it highlights the dramatic increase in wealth inequality that is occurring in India. The basic data it uses are from Credit Suisse which regularly brings out a Global Wealth Databook; and according to Credit Suisse the top 1 percent of the population in India cornered 73 percent of the additional wealth generated in the year 2017.
This is an incredible figure in itself. What is more, this percentage, which refers to the latest year, is higher than the overall figure that had prevailed prior to this year, which was 58 percent. The percentage at the margin being higher than the average percentage means that the average itself, already extremely high, is in the process of rising still further.
Growing wealth, and income, inequality, is not a phenomenon confined to India alone. It is a world-wide phenomenon which has now started worrying even the top leaders of the capitalist world who gather every year at Davos for the World Economic Forum. The threat of social instability that such growing economic inequality poses has placed it as a major item on the Davos agenda.
But where India stands out is that the growth of inequality here has been more rapid than elsewhere in the world, so much so that it now ranks among the most unequal societies anywhere. Compared for instance to the figure of 58 percent of total wealth that the top 1 percent owned in India prior to 2017, the corresponding figure for the world as a whole was 50 percent. And even though for the world as a whole the top 1 percent owned 82 percent of the addition to wealth in 2017 compared to 73 percent for India, the level of wealth inequality in the world will continue to remain below that in India in the foreseeable future.
What this suggests is that the underlying reason which is boosting wealth inequality everywhere is operating with even greater intensity in India. And this reason has primarily to do with the pursuit of neo-liberal economic policies. The growing wealth, and income, inequality is a necessary feature of neo-liberal capitalism. The “spontaneous” tendency of capitalism to produce “wealth at one pole and poverty at another” which had been somewhat restrained in the post-war years through State intervention, in response to the socialist threat and to the growth in working class strength that capitalism faced at the end of the second world war, has been reintroduced with a vengeance now, under neo-liberal capitalism.
There are at least five obvious ways in which neo-liberal capitalism boosts wealth inequality. The first is through the increase in income inequality that it brings about. Since the ratio of income that is saved (and hence added to the stock of assets) is greater for higher income groups, a shift in income distribution in favour of the latter increases both the overall ratio of savings (and asset formation) in total income, and also the share of the top asset-owners in total assets.
An example will make the point clear. Suppose, to start with, that the top 10 percent of the population owned assets worth 250 and earned an income of 50, while the bottom 90 percent had an asset of 50 and earned an income of 50; and suppose the former habitually save half of their income while the latter habitually save 10 percent of their income. Then the top 10 percent would save 25 and the bottom 90 percent 5, so that each group’s asset grows by 10 percent, and there is no rise in wealth inequality.
But now if income distribution becomes 60 for the top 10 percent and 40 for the rest, then with the same savings ratios, the growth in assets is 34 or 11.3 percent of the pre-existing level; the top group’s asset growth is 12 percent while the bottom group’s asset growth is 8 percent. The top group’s share in total assets increases from 83 to 84 percent. And if the increase in income inequality continues then the share of the top 10 percent would continue to rise.
The tendency under neo-liberalism is to keep worsening income distribution. This is because the number of jobs created under it falls woefully short of the number of job-seekers, which increases the relative size of the reserve army of labour, so that wages remain tied to a subsistence level even as labour productivity increases. The share of surplus accruing to the rich therefore keeps increasing over time under neo-liberal capitalism, entailing an increase in income, and hence wealth, inequality.
In the above example we assumed that the ratio of savings to income of each group remains unchanged when income distribution changes. In fact however consumption tends to be relatively sticky when income changes, in which case in the above example the savings of the top 10 percent would increase to 35 when their income rises to 60 (since consumption remains fixed at 25), and the savings of the bottom 90 percent would fall to minus 5 since their consumption remains 45 even as income falls to 40. In this new situation then, the share of the top 10 percent in total wealth increases from 83 to 86 percent.
This tendency for an increase in the share of wealth of the top percentiles becomes particularly pronounced when there is an absolute decline in the incomes of the bottom percentiles. And one reason among others why this happens in a neo-liberal regime is the privatization of essential services like education and healthcare which also makes them more expensive, so that the poor have to deplete their meagre stock of assets even to be able to afford a particular level of access to these services. This therefore is the second way in which a neo-liberal regime contributes to an increase in wealth inequality.
The third way in which a neo-liberal regime accentuates wealth inequality is through an intensive process of primitive accumulation of capital which it unleashes upon the economy. Through a variety of means, ranging from an outright takeover of petty property, including peasant property, (or its purchase “for a song”); to encroachment on common property; to appropriation of State property (which is built up through taxes imposed on ordinary people); to the sheer filching of bank credit from the public sector banks (what is commonly referred to as a build-up of their “Non-Performing Assets”), the big capitalists increase their share in the total wealth of the economy.
In fact primitive accumulation increases wealth concentration in two ways: one has just been discussed; it supplements the effect of what Marx had called “centralization of capital. The other way is that by squeezing peasants and petty producers it forces them out of their traditional occupations to migrate to cities where they join the ranks of the job seekers and hence swell the relative size of the reserve army of labour; this accentuates income inequality for reasons already discussed, and hence wealth inequality.
The fourth way that neo-liberalism promotes wealth inequality is by handing over tax concessions and tax breaks to the rich in the name of promoting higher economic growth. Such concessions directly increase wealth inequality. In addition since they are balanced by reducing government expenditure on education and healthcare, and thereby directly or indirectly privatizing these essential services, they contribute to the impoverishment of large segments of the ordinary people, which as we saw earlier, also increases wealth inequality.
The fifth way in which wealth inequality increases under neo-liberalism is through the formation of asset price bubbles. Speculative booms on the stock market or on other asset markets give a boost to the value of assets, because of which the top percentiles which figure prominently among the asset-holders find the absolute value of their wealth, and hence their share in total wealth, increasing quite sharply within a very short period.
This however raises a moot point. To what extent can an increase in the absolute amount of wealth and its share in the total caused by such a speculative boom be considered genuine? After all, just as a speculative bubble can boost the wealth of the top percentiles, the collapse of the bubble can reduce their wealth overnight; why then should a bubble-based increase in wealth inequality be a cause for concern?
It does however become a cause for concern because, again under a neo-liberal regime, governments try to prevent a collapse of the bubble (which would have seriously adverse repercussions on the economy) by sustaining it through various means. These range from fiscal support (such as what Obama had pledged in the U.S. to stem the effect on the financial system of the collapse of the housing bubble), to the commoditization of elements of nature like water and air (so that new profitable assets are introduced to keep the boom going), to the privatization of government assets such as “spectrum”(with the same objective). Hence the view that wealth acquired through an asset market bubble constitutes only fictitious wealth and should not therefore be a cause for concern, does not necessarily hold.
To be sure, wealth estimates, and hence estimates of wealth distribution, are fraught with a host of statistical difficulties. But, notwithstanding such difficulties, there is no gainsaying the fact that something extremely serious for our democracy and freedom is occurring through the extraordinary rise in wealth inequality.
(thecitizen.in)


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Opinion

Indian elections, South Asian concerns

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By Kanak Mani Dixit

The staggering scale of the election that is under way in India with just under a billion voters is hard for the mind to grapple with, even in this densely populated neighbourhood that includes Bangladesh and Pakistan. The level of worry is also at a pitch, for India should be the bulwark against weakening democracy in a world of Bolsonaro (Brazil), Duterte (the Philippines), Erdogan (Turkey), Putin (Russia) and Trump (the U.S.) not to mention the People’s Republic of China.

Modern India, created by M.K. Gandhi and Jawaharlal Nehru and their cohort, should be raising the standard for social justice and grass-roots democracy, and against destructive right-wing populism. This has not quite been Prime Minister NarendraModi’s record, and hence the concern that another five years would redefine the very idea of India.

 

Already, the term ‘world’s largest democracy’ is achieving banality as India gains majoritarian momentum. Centralised control of society would never be possible in such a vast and variegated society of sub-nationalities, we were told, but look at what is happening.

The high principle and probity of India’s political class, bureaucracy, academia and civil society are now exceptions rather than the rule. India’s Ambassadors are no longer the self-confident professionals we knew for decades, they act today like timid note-takers. Higher education is directed by those who insist that the achievements of Vedic era science included flying machines and organ transplants. Meanwhile, the adventurism that marked economic management, including immiseration through demonetisation, has been ‘managed’ through loyal social and corporate media.

Intellectual toadyism and crony capitalism have overtaken New Delhi on a subcontinental scale, but sooner than later this drift towards regimented society and whispered dissent must be reversed. Too much is at stake for too many citizens — India must revert to the true, messy and contested democracy we have known and appreciated.

Parliamentary democracy is the governance procedure adopted by each and every country of South Asia, and the Indian practice has always been held up as the example.

The precedents set by India’s courts are studied elsewhere, the professionalism of the civil service is regarded as the benchmark, and everyone else seeks the aspirational welfare state set in motion in India in the middle of the 20th century. This is why we watch worried as Indian democracy weakens in step with its economy, as inter-community relationships within India descend to one-sided animus, and as New Delhi’s global clout decreases in inverse proportion to Beijing’s.

To cover weaknesses in governance and promises undelivered, Mr.Modi as the solo electoral face of the BharatiyaJanata Party (BJP) has whipped up a tornado of militarised nationalism that projects Pakistan as the exclusive enemy. No one dares remind the Indian voters that Pakistan is the far weaker power; its people are battling fanatical demons more than are Indian citizens; Pakistan is a large potential market for India’s goods and services; and the future of Kashmir must be based on Article 370 of the Indian Constitution.

Meanwhile, Lahore intellectuals watch with apprehension as India copies the excesses of Pakistan’s theocratic state. Dhaka observers are numbed into silence with New Delhi’s vigorous backing of Prime Minister Sheikh HasinaWajed as she constructs an intolerant one-party regime. Colombo rides a geopolitical see-saw as New Delhi shadow-boxes Beijing. And Kathmandu wonders whether New Delhi has it in itself to concede that the amplified Chinese involvement in Nepal is the result of the Great Blockade of 2015-16.

India has been reduced to a giant nervously finger-counting friends made or lost to China. The media triumphalism that greets even modest shifts in India’s favour — be it in Male or Thimphu — marks unnecessarily low self-esteem. New Delhi seems preoccupied with ‘managing’ South Asian countries when it should be commanding the global platforms on climate alteration, protection of pluralism and correcting imbalances in global wealth.

Few note the incongruity of a New Delhi loudly daring Islamabad while acting coy on Beijing, which one would have thought was the real adversary or competitor. Meanwhile India’s celebrated soft power wilts even as the Chinese work to wipe out their English deficit, and Beijing places Confucius Institutes in far corners. Chinese goods flood the Indian market, Chinese research and development gallops ahead of India’s, and Beijing convincingly moves to tackle environmental degradation.

India seems drowsy and lethargic in contrast. South Asia as a whole — much of it the historical ‘India’ — roots for Indian democracy even while welcoming Chinese investment, infrastructure loans and tourists. Also because it has the largest population in the Subcontinent, India is expected to lead South Asia on myriad issues including the death-dealing Indo-Gangetic smog, fertilizer and pesticide use, cross-border vectors, arsenic poisoning, regional commerce and economic rationalisation, social inclusion and the Human Development Index and so on. But leadership requires humility, to study, for example, how adjacent societies have successfully tackled great challenges — look at Bangladesh surging towards middle income country status.

Nepal has long been regarded by exasperated New Delhi policy-makers as the South Asian basket case sending out migrant labour to India. This much is true, but it also emerges that the Nepal economy is the seventh largest sender of remittance to India after the UAE, the U.S., Saudi Arabia, the U.K., Bangladesh and Canada. Unlike these others, Nepal’s remittances go to India’s poorest parts, in Bihar, Odisha, Uttar Pradesh and West Bengal.

We switch on India’s news channels and find an abysmal common denominator in terms of civility and rationality. The national intelligentsia seems intimidated, unable to challenge the rigid, dangerously populist narrative of the BJP/RashtriyaSwayamsevakSangh (RSS). We watch as the National Register of Citizens propels statelessness, as the refoulement of Rohingyarefugees points to a reckless disregard for fundamental humanitarian principles, and as majoritarianism weakens the pillar of representative democracy that is the protection of minorities.

India is indeed large and important, but the chest size of a country does not translate into equity, social justice or international standing. Because nearly 20% of humanity lives within its boundaries, when India falters, the pit of despair and the potential for violence open up wide and deep.

The South Asia that New Delhi’s policy and opinion-makers should consider is not the centralised Jambudvipa mega-state of the RSS imagination. Instead, the ideal South Asian regionalism is all about limiting the power of the national capitals, devolving power to federal units and strengthening local democracy.

Modi’s own idea of regionalism is one where he calls the shots. The start of his current term was marked by an attempt to dictate to the neighbours, after which the pendulum swung to the other extreme. The freeze put by India on the inter-governmental South Asian Association for Regional Cooperation (SAARC) is only a cynical means to keep Pakistan out of the club.

The sabotaging of SAARC can hardly be considered a victory, for that feather-light geopolitical stratagem fails to consider that regionalism is a potent means to bring economic growth and social justice to India’s own poverty-stricken ‘peripheral regions’ from Assam to Purvanchal to Rajasthan. For its own security and prosperity as well as that of the rest of us, India must re-connect with South Asia.

Sub continental regionalism is also important to achieve New Delhi’s ambitions on the world stage, including that coveted seat at the UN Security Council. India’s global comeback will start the day New Delhi think tanks begin questioning South and North Block rather than serving as purveyors of spin. On South Asian matters, they should pull out a copy of the Gujral Doctrine from the archives, to be dusted and re-examined.

We seek an India that is prosperous and advancing at double digit growth, not only because what this would mean for its 1.35 billion citizens, but to the other 500 million South Asians. For its own selfish interests, the rest of South Asia wants India to succeed in the world.

(Kanak Mani Dixit, a writer and journalist based in Kathmandu, is the founding editor of the Colombo-based magazine, ‘HimalSouthasian’. Source: The Hindu)

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Witnessing the political tamasha in Kashmir

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By Meer Abass

At the onset of election fever, political parties belonging to exploiting ruling class use all kinds of tricks to lure voters on their side and grab power. Politicians resort to anything under the sky to woo voters and counter their rival parties. It’s obvious that in this cut-throat scheme of promises, hardly any political party has a programme or policy that genuinely aims well-being of the people of the state.

Every party claims that their leader is the ‘lion’ of the political jungle as tamashaof the hectic assembly poll campaign in Jammu and Kashmir reaches its culmination.
Getting elected should be very easy. If for five years you work for your voters without fear or favour then getting elected should not cost a dime. So why getting elected costs so much and takes so much effort?

 

The answer lies in the party system and the political illiteracy that our state suffers from.

Our political illiteracy levels are near 95% or more. Even the educated among us are politically illiterate. They stopped getting any education after they clear the class 10 during which they had Civics as a subject (of course this does not include people who did their BA and MA in Political Science).

Our political party system ensures that no representative of the people is able to do anything for the people that elect him/her. He has to follow the diktat of the party. And the party is driven by lobbies that want to get laws and rules made that benefit them. Thus even if there is a lawmaker who wants to work for his constituents, he can’t. Thus at the end of the tenure, if his party has something to show (which they usually don’t have), he can expect to get elected again otherwise he has to depend on the bluff of the party and its ability to convince the people that it has done well for them. Or fake them with the bluster of a fake leader.

And if the representative has been doing good work then his constituents will not even want to see him or hear him during election time. They would have been in touch with him all through the five years and would know what he/she has done and delivered. Thus the cost of getting elected would be very negligible.

Now that is the kind of politics that we should all aspire and work for.

And for a politician that is connected to the people, his/her formal education would not matter as much as his/her understanding of the pain points of his voters and his/her ability to solve their problems.

Therefore, there are two things you can do, one is to get a political education and second is to choose a representative that does work for you and not blindly toe the party line. Best would be to have a representative that represents you and not a political party.

“Walayvasie, aslisherhayy, aaaway (come, my friend. The original lion has come),” sing Kashmiri women folk in traditional ‘rauf’ dance at political rallies.

“Naklishera vatu daira, aslisheraaagaya (it’s time for fake lions to pack bags as the original lion has arrived at the scene,” is a common slogan witnessed in the campaigns right now in the Kashmir valley.

While every party has its own share of slogans but it is the “Sher” which is the common thread in their campaigns in the politically charged atmosphere in the Valley. Kashmir wildlife does not include lions.

The name of ‘Sher-e-Kashmir’ has been prefixed with a prestigious medical institute in the Valley, an agriculture university, gallantry medals for police, employment scheme and the only cricket ground in the Valley.

PDP also invoked ‘sher’ besides its slogans like “SabzukAlam chum aathskyath, aasiydeetaarParvardighar (The green flag is in my hand and God will help me crossing all hurdles)” besides the ‘Sher’ slogan. The flag of PDP party is green.

National Conference has some more to offer their voters like “aapkimushkilkabaaetbarhul, sirfhalhalhal (the only way for a honourable solution to your problems is plough). Plough is the symbol of National Conference.

There are multiple dimensions to how Kashmiris interpret elections. Some call it political maturity and see it as a befitting strategy to avoid having a party in power that has no sensibilities about Kashmir. Those who vote believe that if Kashmiris don’t vote, then the elected representatives will go down the same way as the previous ones have. Many see it as political leverage in negotiating for issues such as an immediate and urgent repeal of draconian laws in force in Kashmir and the release of youth who have been booked under these laws. Some consider it important for a long-term political solution to the conflict, which they think is only possible through consistent dialogue and negotiation with New Delhi, Islamabad and Kashmir.

BJP, besides its “abkibaarModisarkar” slogans, has banners hanging at various traffic cross sections “aaobadle Jammu Kashmir kehaalat, aaochaleModikesaath (let’s change Jammu and Kashmir’s destiny, let’s walk with Modi).”

It is said that in Kashmir nothing is straight except poplar trees, and it reflects the general persona of the biotic of Kashmir. Do we actually qualify to be humans, well what’s happening on the ground and has happened in the past, are contesting this prerogative. So the question arises, who is a common Kashmiri? And what are the aspirations, responsibilities and expectations out of common Kashmiri?

(Author is an Assistant Professor, Department of English, Govt Degree College Handwara. Feedback at meerabas32@gmail.com)

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Opinion

Running on fear in 2019

The Kashmir Monitor

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By Barkha Dutt

NarendraModi, India’s powerful prime minister, is seeking a second term. But in 2019, he is sounding less like the man who campaigned in 2014 and much more like his previous avatar — the abrasive, vitriolic and inflammatory chief minister of Gujarat.

His first national election five years ago was built on aspiration. Then he used to proclaim that the country’s constitution was his only holy book; he promised “achhe din” (good days) and “vikas” (development).

 

This campaign, by contrast, has been built on fear and on the othering of his political opposition as anti-national, anti-Hindu and, in antithesis to Modi’s own projected machismo, wimpish.

There is little or no conversation about the performance of his government, the economy or jobs. A leaked report from the National Statistical Commission (which the government contested) placed unemployment numbers at a four-decade high; a certain amount of deflection and changing the subject is political compulsion.

But the Modi-led BharatiyaJanata Party campaign has descended from spin to brazen coarseness, fear-mongering and Islamophobia.

In the 2019 production, Modi has cast himself as the “chowkidar,” or watchman — the guardian at the gate who will defend the country against predators and terrorists. The decision to order an airstrike inside Pakistan as retaliation for the terrorist attack in Pulwama, Kashmir, that killed 40 paramilitary police officers has become a major element in his narrative.

Modi even delivered a speech with photographs of the men who were killed in the Kashmir strike forming the stage backdrop; he also asked young voters to dedicate their ballot to the military personnel who led the assault inside Pakistan. Yogi Adityanath, the saffron-robed monk chief minister of Uttar Pradesh, India’s most populous and politically important state, added insult to injury by describing the military as Modi’s “sena” — or Modi’s army, comments for which he has been censured by the Election Commission.

The BJP has defended this by arguing that because the prime minister took a great risk by sanctioning the Pakistan strike — in contrast to the Congress, which took no military action even after the Mumbai terrorist attack in 2008 — the party has every right to politically own the decision. But given the flamboyant nationalism the party claims as its defining characteristic, this debasement of India’s armed forces is, frankly, impossible to justify.

The young daughter of a soldier killed in the Pulwama terrorist attack called out the bluff. “My father did not die for NarendraModi or Rahul Gandhi. He died for India,” ApoorvaRawat, 20, told me. “Can’t you run a campaign without using our families to win votes?”

Using soldiers as political fodder is bad enough. But even worse is the Modi campaign’s message to India’s 172 million Muslims. In the past few years, Muslim cattle traders have been repeatedly targeted by right-wing mobs on fabricated charges of trading in beef. During this campaign, the men charged with the 2015 lynching of Mohammed Akhlaq, a Muslim ironsmith in Dadri, were given front-row seats at a BJP election rally.

A prominent government minister has warned Muslims to vote for her or face the consequences. And in one of the worst election speeches of the season, the prime minister taunted Rahul Gandhi, leader of the opposition Congress party, for running away from Hindu voters to a constituency in the south where “the majority is a minority.” His comments were about Gandhi’s decision to fight from two seats, Wayanad in the southern state of Kerala in addition to his long-standing parliamentary seat in the north. Attacking the Congress is fair but implicit in this particular attack was the suggestion that a parliamentary seat dominated by Muslims is something to be embarrassed of.

Every single day, the marginalization and humiliation of India’s Muslim citizens are being reinforced.

The final blow came from the BJP president, Amit Shah, Modi’s second in command and said to be the only person the prime minister trusts. Shah has vowed to create a national citizens’ registry that will “remove every single infiltrator from the country” unless they happen to be Hindu, Sikh or Buddhist. The official sanction of crude religious majoritarianism did not even bother to disguise its anti-Muslim bigotry. It was tweeted out by the party handle with the hashtag #NaMoForNewIndia — a model of “New India” eroding the very basis of old India: constitutionally protected pluralism.

So far, despite the virulence of the campaign he is steering, Modi seems to be comfortably ahead. There is no visible backlash to even his most divisive words. His persona as a spartan, non-corrupt bachelor, who is “not in politics for himself” — this I’ve heard repeatedly from voters — and his reputation as a decisive leader seem to offset the flaws voters now concede he has.

Admittedly, there is no euphoria of the kind that India witnessed in 2014. But nor is there any widespread anger. And when it comes down to it, voters often add “who else is there” to their criticism of Modi’s first term. It’s like the post-romance phase of a personal relationship — you’re no longer smitten, the sheen has worn off, but until a better option comes along, in your mind he or she is as good as it gets, with all of the flaws. You tell yourself that the relationship is better than being single.

For this, India’s opposition must take the blame. Crude and sexist language by leaders from within their own ranks — such as Azam Khan, the regional leader who commented on the underpants of his female adversary — have somewhat blunted the moral force of their attack on the BJP.

The opposition also remains fragmented and divided. It has been too slow to produce a counter-narrative, and this has only bolstered Modi’s chances. It suits Modi to make himself the central issue of this election and ask, Modi vs. who?

The answer to that would be Modi vs. math.

In the absence of any other national persona to take on the tough-as-nails, ruthless and charismatic Modi, the opposition’s best bet is to bury its differences and work on a series of local alliances. Modi wants a presidential-style election. The opposition can only counter that with regional coalitions of varied caste groups and communities.

For the moment, in one of India’s ugliest election campaigns, the advantage is with Modi.

Chances are that he will be prime minister again. But there has been absolutely nothing prime ministerial about his campaign.

(washingtonpost.com)

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