- According to World Inequality Report (2022), India is now among the most unequal countries in the world. In India, the top 10% of the population earns 57% of the national income.
- Within the top 10%, the very elite top 1% earns 22%. In comparison, the share of the bottom 50% in national income has declined to 13%.
- The rise in the fortunes of the very rich even during covid crises, when juxtaposed against the misery of the millions of migrant workers who had to walk back to their villages, is a stark reminder of the extent of economic disparities.
Crisis of an ideology:
- A surging tide of nationalism and authoritarianism has imperiled democracy even in democratic countries such as UK, US, INDIA and EU too.
- Economic despair is feeding the rise of nationalism and identity politics, Liberals who continue to advocate for more liberal economies must understand how their ideas have caused the rise of anti-liberal societies
- Opening national borders and reducing the taxes at the top became an ideology in last 30 years, the justification was that the animal spirit of wealth creators must not be dampened.
- With higher taxes until 1970s the US and many European countries in Europe had built up their public health and education infrastructure.
- The rich are now being taxed less than they were and the income inequality has remained high.
- Liberal economists, promoting free markets, free trade, and privatization are worried by nationalism and authoritarian governments.
Failure of ideologies:
- Authoritarian governments are now being democratically elected by people seeking a way out of the morass. Further, Socialism seems to be back in U.S. politics now with Bernie Sanders, Elizabeth Warren, and young Democrats.
- Worries within liberals: Liberal economists, promoting free markets, free trade, and privatization, are worried by nationalism and authoritarian governments. They rail against “populist” policies of governments that subsidize the poor and adopt industrial strategies for self-reliance and jobs for their citizens.
- Democratic and capitalist principles were becoming reconciled with “socialist” ideas in Europe and the U.S. after the World Wars, and in developing countries such as India after the collapse of colonialism.
- Climate change and political rumblings around the world are both warnings that capitalism needs reform.
Source: THE HINDU.