#Must Read – Society Watch – Inequality is the number one risk !!!

Note – Excerpts from the speech of Vice-President.Contains good statements and statistics that can be used to accentuate your writing.

To enjoy the ‘freedom of,’ there is a requirement first for certain ‘freedom from’. To survive with dignity, humans require both ‘freedom from want’ and ‘freedom from fear’

Richest 1% in India owned nearly 60% of the country’s total wealth, with the top 20% commanding 80%. The bottom half of Indians by contrast, collectively own only 2% of the national wealth.

Rising inequality can lead to conflict, both at social and at national level and the growing threat of left extremism, which has been repeatedly acknowledged as the gravest security threat to Indian state, has its roots in economic deprivation and inequality in access to resources.

Freedom, in the dictionary meaning of the term, signifies ‘the power to act, speak and think freely’. It implies unhampered liberty to think freely, to question anything, to be able to speak frankly, to be free to explore boundaries.

Yet freedom or liberty in itself would be quite meaningless. To enjoy these ‘freedom of,’ there is a requirement first for certain ‘freedom from’.

In advance of the world’s financial and economic elite going to Davos for their annual meeting, the World Economic Forum publishes its Global Risks Report. The 2017 edition highlights some risks facing the global system and places the issue of income inequality as the number one risk because it is associated with a rise in populism and threatens the cohesiveness of countries. It describes the present as ‘a febrile time for the world.

It is therefore not surprising that reducing inequality is one of the UN Sustainable Development Goals.

A number of studies have come to the distressing conclusion that despite the increase in the number of people coming out of abject poverty, the majority of people on the planet today live in countries where economic disparities are bigger than they were a generation ago. Please consider the following:

• Including capital gains, the share of national income going to the richest 1% has doubled since 1980. Within it, the largest share going to the top 0.01% – some 16,000 families- who now control almost 5% of the global wealth.
• If we divide the whole income of the world into two halves, we find that the richest 8% get half, while the other half would be distributed in the remaining 92% of the population.
• In almost all countries, the mean wealth of the wealthiest 10% is more than 10 times the median wealth. For the wealthiest 1%, mean wealth exceeds 100 times the median wealth in many countries and can approach 1000 times the median in the most unequal nations.
• The richest 1% in India owned nearly 60% of the country’s total wealth, with the top 20% commanding 80%. The bottom half of Indians by contrast, collectively own only 2% of the national wealth.

While the economists may continue to debate the extent and causes of inequality, there can be little doubt about its implications for the political, social and economic fabric of society.

Some years earlier, Joseph Stiglitz had written about the price of inequality in the context of the United States. More recently, Kate Pickett and Richard Wilkinson have described the “pernicious effects that inequality has on societies and provide evidence for a strong correlation between higher levels of national inequality and a wide range of health and social problems.

Research has shown that in contrast to oligarchic regimes; democracies avoid serious political turbulence only so long as they ensure that the relative level of inequality between the rich and the poor does not become excessively large. Some studies have concluded that ethnic groups with incomes much lower than a country’s average per capita income are more likely to engage in civil war.

New protest movements have broken out around the world, many arguably rooted in the burgeoning inequality. The Occupy Movement and the Arab Spring were both fuelled by growing public despair at the sharp inequalities and growing unemployment and the perceived inability of the existing governance structures to redress the situation.

Inequality also breeds economic inefficiencies and limits productivity. Research by IMF has shown that income inequality slows growth, causes financial crisis and weakens demand. In a recent report, the Asian Development Bank has similarly argued that if emerging Asia’s income distribution had not worsened over the past 20 years, the region’s rapid growth would have lifted an additional 140 million people out of extreme poverty.

A conceptual framework is provided by Amartya Sen and some others who see human capabilities as the capacity and freedom to choose and to act; and calls for the opportunities that give individuals the freedom to pursue a life of their own choosing to be equalised.

We have to move beyond seeing corporate social activity and government welfare schemes as merely minimum relief for the misery of the masses aimed mostly at neutralising the more aggressive antagonism of those who have lost income and wealth or those whose upward mobility seems permanently blocked.

We need to ask ourselves some uncomfortable questions:

• Can we ignore the great inequity as merely a by-product of progress? (Can be asked by UPSC)
• Has the trickle-down model of growth failed us? (Can be asked by UPSC, already asked before)
• Have we paid too high a cost in terms of environmental damage for our material progress?(Can be asked by UPSC)
• Are conflicts and human suffering the new normal? To what extent are they induced by failed ventures in quest for unrealizable utopias? (Can be asked by UPSC)
• Can we just accept the growing insularity, intolerance and discrimination?
• Have we made sufficient investments in improving our human capital and public goods, like education and health-care?(Can be asked by UPSC)

Faced with growing global violence, poverty, and injustice, it may be difficult to retain hope for an equitable future. Yet, if the reality of global inequality inspires what Antonio Gramsci called “pessimism of the intellect,” work must nevertheless begin with what he termed “optimism of the will”—the undaunted commitment that drives radical change.