A Guide to Inequality

By Anjum Altaf

It is good that inequality is attracting attention in Pakistan because there are significant gaps in our understanding of the phenomenon.

What is under scrutiny in the West is economic inequality which is only one aspect and that too a rather peculiar one. Inequality has at least two other important dimensions – political and social. Political inequality refers to unequal say in choosing how one wishes to be governed and within the representative form of governance such equality is now ensured by giving every citizen a vote. Although the struggle for political equality goes back at least four centuries, its full achievement is quite recent. Very few are aware that only around 15 percent of the adult population was eligible to vote in the 1946 elections in India. Women obtained political equality as late as the 1940s in some European countries and Blacks became eligible to vote much later than Whites in the U.S.

Social inequality can be appreciated by thinking of who can share your dining table. Your uncle surely can but your cook would most likely eat in the kitchen in separate utensils. Societies stratified by status are socially unequal, caste-based systems being the most obvious examples in South Asia. Some aspects of gender and race discrimination like prohibiting women to drive in Saudi Arabia or restricting Blacks from certain schools in the U.S. are or were forms of social inequality.

Political and social inequalities have engendered protracted struggles over a number of centuries with very clear goals – the achievement of full equality. These goals have been largely achieved in the West which is why one doesn’t hear much about them anymore. The situation is quite different in South Asia where social inequality is the norm. Political equality does exist in principle but in a peculiar form because of the nature of its origin – a fallout of decolonization and not the outcome of a prolonged popular struggle. Consider how one-person-one-vote is moderated through biraderi and caste identities and how many women cast their votes as instructed by men.

Economic inequality is quite different because complete parity has never been a serious popular demand. It is relevant in restricted domains like gender and ethnicity where the call for equal-pay-for equal-work remains cogent but across-the-board equality has been espoused only by some utopian movements. Even Marxism didn’t subscribe to it – its maxim was ‘from each according to his ability; to each according to his needs.’

The reason economic equality has not been a political demand is that it contradicts the demand for freedom. Individuals wish to choose between work and leisure for themselves and since it is highly unlikely that everyone will have the same preference, income inequalities are accepted as inevitable. Political and social equality are considered birthrights but economic achievement is a function of choice as well.  

The recent attention to economic inequality in the West is not the outcome of a sudden popular yearning for parity. It has more to do with the realization by the elites that inequality might have crossed the point where it threatens both capitalism and democracy, the pillars of the current world order.

Economic inequality was not considered a threat to capitalism as long as it was believed that everyone was becoming better off albeit some more than others. This trickle-down theory has been exposed as mistaken. Since around 1980, the output of the capitalist economy has been sucked up – the richest have gained, the middle has stagnated, and the bottom has lost in real terms. This explains the emergence of the Occupy Wall Street movement and the resulting blasphemous references to socialism in the recent elections in the U.S.   

The concentration of wealth has also distorted democracy because the rich have used  money to protects their assets. It is common for tycoons to pay a lower income tax rate than their secretaries and legal mechanisms have been created to shelter wealth offshore – Trump is reported to have paid no tax for 18 years. Democracy has morphed into plutocracy with one-person-one-vote replaced by one-dollar-one-vote and a growing reaction is paving the way to right-wing populism.

Economic inequality is extreme in South Asia –  the richest 57 individuals in India are reported to own as much wealth as the bottom 70 percent of the population. However, there is no significant political mobilization because people continue to accept economic inequality as the norm. They have always known that it exists – how could they not when it is always in their face – but its wider implications for capitalism and democracy are not issues that agitate the minds of the rulers or the ruled.

Much more relevant for the individual in the economic sphere is equality of opportunity. It is a meaningful political demand that irrespective of the economic status of individuals their children should be entitled to the same opportunities as anyone else’s. This would begin to erode the cumulative accumulation of privilege and wealth that characterizes South Asia.

The real issue remains social inequality. Without gains on this front economic justice would remain unattainable. Not all South Asians have been unaware of this truth. Reflect on the words of Dr. Ambedkar, the author of the Indian Constitution: “On the 26th of January 1950, we are going to enter into a life of contradictions. In politics we will have equality and in social and economic life we will have inequality… How long shall we continue to deny equality in our social and economic life?…  If we continue to deny it for long, we will do so only by putting our political democracy in peril. We must remove this contradiction at the earliest possible moment or else those who suffer from inequality will blow up the structure of political democracy which this Assembly has so laboriously built up.”

This opinion was published in Dawn on June 13, 2017 and is reproduced here with the author’s permission. For a related article, see Poverty and Human Rights.

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5 Responses to “A Guide to Inequality”

  1. Vikram Says:

    “the richest 57 individuals in India are reported to own as much wealth as the bottom 70 percent of the population. However, there is no significant political mobilization because people continue to accept economic inequality as the norm.”

    There are two claims made here. That the fact that 57 individuals are as wealthy (mainly stocks of companies they own) as the bottom 70% should provoke ‘political mobilization’.

    That the lack of ‘politlcal mobilization’ is due to the acceptance of inequality as the norm.

    What is the justification and evidence for these claims ?

    • Anjum Altaf Says:

      Vikram: The article is about Pakistan. The example of 57 individuals in India was used because there is no comparable data for Pakistan and it is a reasonable assumption that inequality is likely to be similar in the two countries.

      The remark that that there is no political mobilization against inequality is an observation. It does not require any justification.

      The claim that inequality is considered the norm is based on repeated conversations with people. It is a dominant belief in Pakistan that God created the world with rich and poor people for His own reasons and good people will be rewarded in the hereafter for accepting the Divine Will. And what can be a greater acceptance of inequality than the caste system in India.

      This is similar to the pre-Enlightenment belief of Christian Europe (“The poor will always be with us”). When the belief in Divine Will was rejected in Europe political mobilization emerged to demand a fairer distribution of assets (which at that time were primarily in the form of land). Hence the celebrated and unequivocal slogan of the French Revolution – Liberty, Equality, Fraternity. There has been no such movement of a similar scale in South Asia although there have been limited and localized unsuccessful attempts led by the Communist Party, e.g., in Telengana.

      You are welcome to provide a different justification and evidence for the same phenomenon. That is the purpose of these discussions.

      • Vikram Says:

        Out of the total revenue accrued by the Indian government, 40% comes from taxes paid by businesses and corporations, 14% from income tax, and the remainder from service tax and borrowing.

        25% of Indian government spending is on salaries and perks of government employees (even though they make up only 6% of total workforce, 0.2% of population), 25% on agricultural subsidies/investments.

        In terms of money, the Indian state effects a net transfer from the corporations and salaried employees to government employees and politically powerful rural groups.

        Political mobilizations should focus on decreasing the spending on government employees (who are paid exorbitantly without much accountability, especially rural teachers). In fact, the mobilization should demand a decrease in the spending on non-essential services provided by the state (oil production, construction, steel, airlines) by decreasing the top heavy headcount, and ask for a massive increase in state functionaries in the law enforcement, justice and education departments, which are woefully understaffed.

        It is not clear to me therefore why you are berating the 57 Indians who made some money in software services, pharmacy, automobiles, media and telecoms. They pay their fair share of taxes.

        • Anjum Altaf Says:

          Vikram: I am not berating “the 57 Indians who made some money.” I am simply stating a reported statistic that 57 Indians owned as much wealth as the bottom 70 percent of India’s population. Is there a bar on stating facts or is this particular fact some kind of sacred cow that cannot bear mention?

          Also, how do you know “they pay their fair share of taxes”? Do you know how much taxes Trump pays in the US? Do you know how much taxes corporations pay in the US relative to the statutory tax rate? Have you heard of off-shore tax havens and Swiss accounts? And what exactly is a ‘fair’ share?

          Finally, political mobilization is not a policy statement from a think tank that identifies what expenditures should be increased or decreased. That is not how the political mobilization of the French or the American Revolutions or even of the Occupy Wall Street movement took place. It is a reaction to a generic feeling that the economic system is not fair. That is how Bernie Sanders mobilized his supporters in the most recent election in the US and Corbyn in the UK – “for the many, not the few.”

  2. Anjum Altaf Says:

    Is there a peaceful way to reduce inequality? And, what can be considered an acceptable distribution of wealth? Lessons from history.

    https://aeon.co/essays/are-plagues-and-wars-the-only-ways-to-reduce-inequality

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