Oxfam Inequality Report, Piketty & New India || Midweek Matters 43

31-01-2022published_dt 2022-01-31T10:58:15.339Z31-01-2022 16:28:15 IST
2022-01-31T10:58:15.339Z31-01-2022 2022-01-31T10:58:15.339Z - - 24-03-2023

Hello and welcome back to 

Midweek Matters. 

Some writings have the potential to shake you out of complacency. The temptation for an individual and a society is to get busy with other things in the hope that those writings cease to trouble . We all do that and thus cancel their potential power. Business as usual is reassuring. Comforting. Coming face to face with the demons is unsettling. It shatters our certitudes, colourful myths, received narratives, favourite political philosophies, and dominant economic theories. Today I want to speak to you about two such works. One is, Thomas Piketty's absorbing book, Capital and Ideology. The second one is the recently released Oxfam's report, Inequality Kills. The report has an India supplement also. That is directly relevant for us. My plea today  is that engage with these two works, challenge them. And, even if we do not agree with them, we should allow ourselves to be troubled by them both.

Piketty's Capital and Ideology is a sequel to his earlier path breaking work, Capital in the Twenty First Century. But it can be read independently, although reading them both will be highly rewarding. Both are detailed works. The latest is an enormously lengthy one.  A lot of us do not really have that much time to read such works. Many of us these days like to think we do not have that kind of time to spare. Some of us do not have either the patience or the appetite for long winding cross country serious, scholarly historical analyses. At the risk of not doing full justice to his work, I’d briefly summarise Picketty's main  argument and then move on to the much more accessible Oxfam Report, both the global one and the India Supplement. 

Picketty tries to explore and understand inequality. He pores over what is currently the largest database on inequality, World Inequality Database, WID.world. It contains data on income and estate tax, distribution of wealth and income from late 19th century or early 20th century. In some cases, like France, data is available since the late 18th or early 19th century. To me the most striking and significant observation of Piketty is, and I quote, "Inequality is neither economic nor technological; it is ideological and political." He further says, "…elites of many societies…have sought to 'naturalise' inequality. They argue hat existing social disparities benefit not only the poor but also society as a whole and that any attempt to alter the existing order of things will cause great pain." Mark these remarks. We will return to them later when we talk about extant mindless justifications of inequality in the name of encouraging wealth creators and expecting "trickle down" to the bottom of the pyramid. Piketty's work is riveting to me partly because it explores how human societies justify their inequalities. Or even able to turn away from them, ignore them, or paper over them. He traces the current post 1980s hyper inegalitarian narrative to the failure of communism and the collapse of Soviet Union. 

While Piketty's broad sweep, detailed, historical meditation on Inequality may be inaccessible to many, the latest Oxfam Report drags us to come face to face with not only highly troubling but also several ugly and brutal truths in the post Covid world around us, globally as well as here in our country. Sample these: a new billionaire is created every 26 hours since the Covid pandemic began. Globally, the wealth of the ten richest men has doubled, while the incomes of 99% of humanity are worse off, because of Covid-19. 10 richest men together own more wealth than the combined worth of the bottom 3.1 billion people in the world. And now, imagine this, if the top ten richest men spent a million US dollars per day, yes - a million US dollars per day, it would take them 4 hundred and 41 years to spend their entire combined wealth. 252 men have more wealth than all 1 billion women and girls in Africa, Latin America and the Caribbean, combined. Since 1995, the top 1% have captured 20 times more of global wealth than the bottom 50% of humanity. This inequality has consequences.

 

Inequality contributes to the death of at least 21,600 people per day. That means, a person dies every 4 seconds because of inequality. About 5.6 million people die every year because of lack of access to healthcare facilities in poor countries. And about 2.1 million people per annum die of hunger. This is the global big picture. 

Let’s now take a look at the situation at home, in our own country. 2020 & 2021 were the worst years for India. It’s growth rate has plummeted. 2020 April to June quarter saw the economy contracting by 23.9%. But, Oxfam report tells us, the number of billionaires in the country grew from 102 in 2020 to 142 in 2021. While the bottom 50% of the population's share of national wealth is a mere 6%, top 10% of our population holds close to 45% of our national wealth. Our country is home to a quarter of all undernourished people in the world. Oxfam study cites a report by Forbes which tells us that the collective wealth of top 100 richest persons hit a record high of 775 billion US dollars. And about one fifth of this increase is accounted for by one individual and his business house - the Adani Group. All this happened while 84% of the country's population saw a steep decline in its income. This period also coincided with the growth of India's poor from 59 million in 2020 to 134 million in 2021. The share of indirect taxes has seen a steady increase in the gross tax revenue. While it was 43% in 2011, by 2019 it stood at 50%. And we all know that indirect taxes burden the poor disproportionately. Excise duties rose from 12% to 19.2% of the gross tax revenue while there was a sharp decline in the corporate tax from 27.7% to 22.6%. The union government collected 8 lakh crore rupees from taxes on diesel and petrol, pushing up their prices to unbearable levels. In the 2021 fiscal alone it collected 3.71 lakh crore rupees. These taxes have a ripple effect, pushing up prices of food, vegetables, and other essential commodities, causing further erosion of real incomes of the poor peoples. National Crime Records Bureau tells us that daily wage workers, self-employed and unemployed are the three top categories that resorted to suicides during this period. 

The Oxfam report also talks about how education, health care services and other public goods have become expensive and therefore inaccessible to the country's poor. Government's  abdication of its duty to provide public goods is starkly evident. The proportion of Indian children attending government schools has declined to 45%. This is as high as 85% in the United States, 90% in the United Kingdom and 95% in Japan. In India sending a child to a private school is 9 times more expensive than sending to a government school. Private healthcare has proved to be equally debilitating to the people. In 2017 alone over 55 million people were driven into poverty on account of expenditure on private health care. This is nothing but a structured economic violence against the poor in the country.

New India is indifferent to these inequalities. Economic Inequality is not a part of its political discourse. The Old India's political discourse, on the other hand, foregrounded it. Grappled with it. It was ineffective, no doubt, it fumbled, and was probably incompetent. It even failed. As every other country in the world failed. But old India tried. Its political discourse never justified inequality. It, however, made significant advances in addressing another inequality. The social and cultural inequality. It gave a sense of belonging to the marginalised, to the minorities. It reduced their alienation. Today, the New India is not only indifferent to economic inequality. It justifies it. It wants us to believe that the rich are, somehow, the only wealth creators and they need to be taken care of, given special privileges. Their corporate taxes need to be reduced. Public goods need to be given over to them. Poor, and the country at large will eventually benefit from their swelling wealth. From their efficiency, their smartness.

 

Inequality, in other words, is in the interests of the poor. The poor may not even know about it. This is where we recall Picketty's observation that inequality is neither economic nor technological; it is ideological and political. New India added another inequality. Again, not an economic or technological one. But purely ideological and political a la Piketty. People in New India are not citizens any more. They belong to religions. Native religions and foreign ones. Those whose Punya bhumi is here and those whose sacred land is elsewhere. They are, therefore, unequal. Those who belong to the native religions own this land. Others, even if they are born here, to the people who were born here and lived here, generation after generation for centuries, do not belong here because of the way they worship. They’re unwelcome. Should they choose to stay on, they should be content with unequal, subordinate, and even inferior, status. They should not fear, though. The native religion and its adherents are benevolent,  and tolerant. Just like the growth of the rich will have trickle down effect, the New India argues that the hegemony of those belonging to the native religion is indeed good for those 'others'. The poor, and the marginalised as well as those belonging to the non native religions, whose Punya bhumi is elsewhere, should discharge their duties and responsibilities. Not demand their rights as citizens. Demanding rights, by the poor and the marginalised, weakens the nation. It’s economy. It’s society. Thus spake the Prime Minister of our  New India.

 

That’s all for this week. 

Will be back again next week

Wednesday, lunch time at 1:00 o’clock 

Stay safe and take good care of yourselves and all your loved ones. 

Until then, Bye.

 

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