Tue, Dec 06, 2011 - Page 9 News List

Some more unequal than others in world’s largest democracies

By Pranab Bardhan

Inequality is on the public’s mind almost everywhere nowadays. Indeed, in the world’s two largest democracies, India and the US, widespread popular movements against rising inequality and elite greed are becoming highly salient issues in looming national elections.

Yet, in both countries, some social inequalities have been on the decline during the last few decades. In India, certain historically disadvantaged groups (particularly among the lower castes) are now politically assertive. The most egregious vestiges of caste discrimination are gradually disappearing.

Similarly, in the US, discrimination against women, black Americans, Latinos and homosexuals is declining.

These developments reflect a democratic advance in both countries. However, at the same time the fabric of democracy is being torn apart by a staggering rise in economic inequality.

Generally, economic inequality is easier to justify than racism and other forms of invidious discrimination. A fundamental tenet of US society is that everyone has an equal chance — a belief that appears more plausible with the decline of social bias. In India, this myth is less powerful, but there is a general feeling, shared even by some of the poor, that the rich deserve their wealth because of their merit, education and skills.

There are two problems with this argument.

First, education and skills are not inborn talents. The rich have access to better schools, healthcare, nutrition and social support than the poor, which plays a decisive part in later academic and social success.

Preschool children in rich families have better nutrition, healthcare and mentoring — there is evidence that much of the brain damage caused by malnourishment for poor children might have already, irreversibly, happened by age three.

When students from poor families start to fail in school, they have little or no access to remedial classes, whereas the rich receive expensive coaching from private tutors throughout their education. As a result, India has the world’s largest number of school dropouts.

Sociologists in the US have also documented adverse “neighborhood effects” for poor children in inner cities. In Indian villages, where residential patterns are often even more segmented, such effects are acute.

The other problem in both countries is the rising importance of “unearned incomes.” In India, as in other fast-growing economies, scarce public resources, such as land, minerals, oil and gas, as well as telecommunication spectrum, have shot up in market value recently, generating extremely high unearned income for the politically well-connected.

In the US, the deregulation of the financial sector during the last few decades and the accompanying rise of dubious financial instruments destabilized the real economy while doing little to improve productivity. The result, as everyone knows, was exorbitant financial gain for a select few, followed by large losses that were paid for by the many.

The US and Indian examples suggest that, in democratic societies, groups that promote social discrimination grow politically weaker over time. Economic inequality, on the other hand, is perpetuated through the politically powerful and well-funded lobbies of the rich.

The trend is reinforced as elections become more expensive in both countries, leaving politicians increasingly dependent on contributions from wealthy donors who demand policies that are favorable to their interests.

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