View: The missing politics of inequality
- 2020-03-15 09:59
- By economictimes.indiatimes.com
An interesting puzzle that still remains unsolved is to ascertain the level at which a society begins to perceive distribution of resources to be unfair. The Human Development Report 2019 showed that the rise of inequality in India over the last two decades has been the second highest in the world with Russia being the most extreme case. Considering the level of inequality in India in recent times, which is incomparable to democracies around the world, one would expect it to be a primary issue for the voters in the country. India, for instance, is yet to experience any show of public discontentment against rising inequality to the scale of mass demonstrations it had witnessed against corruption in 2011, which the voters even took to the ballot box as seen in the unambiguous vote against Congress in 2014. A US economist, Tibor Scitovsky, suggested three criteria when rising inequality is socially acceptable: when it arises out of merit, when there is equality of opportunity, and when there is an improvement in the condition of those at the bottom of the ladder. Meanwhile, inequality in the modern world has been hardly meritocratic or stemming from equality of opportunity as validated by an Oxfam study, which found that approximately two-thirds of billionaires’ wealth currently is a product of inheritance. On the other hand, when the economy grows at a rapid pace, an improvement in economic advancement of one section of society signals a possibility of a rise in prosperity of the rest. Hirschman’s arguments could partially explain the tolerance of inequality among Indian voters during the high-growth years that lasted from the turn of the millennium till 2012. One, it has allowed Indian consumers to access e-commerce services (Amazon and Flipkart) and ride-hailing businesses (Uber and Ola), which has created multiple low-skill employment opportunities. India needs to explore avenues of job creation and high growth soon, which might become more difficult in the impending recessionary fears spreading across the world.