From the perspectives of developmental economics, economic equality is not the greatest of virtues; neither is economic inequality the worst of vices.
By Anuj Kumar Vaksha
On 17 January 2022, Oxfam International published a briefing paper titled Inequality Kills, and called for unparalleled action to combat unprecedented inequality in the wake of COVID-19. It also published, on the same day, an India-specific report on the same subject titled, Inequality kills: India Supplement 2022. The report, particularly, the India supplement received wide coverage in print and social media. Most of the media coverage were captioned with alarmist headlines relating to the rise of economic inequality in India.
There is no denying the fact that economic inequality is bad – greater the economic inequality, the worse it is for the poor. This undeniable fact, however, is not the complete truth. From the perspectives of developmental economics, economic equality is not the greatest of virtues; neither is economic inequality the worst of vices. The general economic impoverishment and destitution arising out of the failing economic processes are far greater vices than the economic inequality of some degree persisting with sound economic processes.
It is now almost a settled proposition that an open, free and competitive economy brings general prosperity in society, though with inequality which follows the former as a byproduct. Most modern economies thus, on the one hand seek to build an open, free and competitive economy, while on the other hand, the seek to control inequality. India has embraced economic reforms since 1991 as a resolute decision to shake off socialist biases from the Indian economy and structure it to evolve as a free, open and competitive economy.
By 2022, India has moved far ahead on the path of economic reforms with almost irreversible political gusto. In the new India, economic inequality is not an unpardonable sin. It is an undesirable feature of a rapidly developing economy that needs to be appropriately managed. In a socialist or a communist polity, the most stringent and even repressive measures are used to remove inequality. In a democratic polity like India, the control of economic inequality involves complex economic, policy and political nuances.
Irrespective of the fact that India has moved far ahead, almost irreversibly, on the path of economic reforms, the socialist and communist brigades have repeatedly attempted to mud-sling the economic reform processes through rhetorical, propagandist and emotive reports on one or other aspect of the Indian economy. The recent Inequality Kills report from Oxfam on India is one such attempt to put in grisly state the issue of economic inequality, particularly in the context of untold human sufferings of the poor during the COVID-19 pandemic.
Billionaires bitterly targeted
The report particularly targets the government of the day and the billionaires who are the key participants in the economic growth of the country. The billionaires have been targeted so bitterly that, one with soft heart would possibly get sick, if he or she hears the sins attributed to them.
The report ignores the fact the wealth of the richest people in an open, competitive and free economy are not kept in their safe vaults in hard currencies. The substantive part of their wealth is invested in running enterprises. Thus, except for the numerical value of the notional wealth, the wealth that makes them billionaire does not live with them.
The Oxfam report completely ignores the herculean measures undertaken by government to address the economic depravity of the poor from time to time and particularly during the COVID-19 pandemic. In this sense, the Oxfam report is biased, misleading and motivated by left philosophical distortions.
The report does make some good, practical solutions to address the sufferings of the poor during COVID-19 pandemic. To this limited extent, it is appreciated. But it also advocates for radical changes based on the left ideological constructs, against which the people need to be guarded.
Anuj Kumar Vaksha is a Professor with the Guru Gobind Singh Indraprastha University, Delhi.
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