The World Inequality Report 2018, a first of its kind, was published last week by Thomas Piketty, Emmanuel Saez, and their associates. Indeed, as Piketty demonstrated in his 2015 book Capital in the Twenty-First Century, we are witnessing a resurgence of the rentier class – the class which owns (financial and non-financial) assets and they obtain a rent/return on their ownership – and not the 'euthanasia of the rentier class' as John Maynard Keynes had expected.
In this short essay, I argue that our staggering inequality of income and wealth severely undermines progressive politics, and therefore renders our collective vision of a good life for all impossible.
One of the key insights from Piketty's book is that the rate of return on 'capital' (which includes financial assets such as equity shares, mutual funds, and bonds and non-financial assets such as land and housing) has grown faster than the rate of growth of output (or GDP). Remember that the rate of per capita GDP is a proxy for the rate of annual growth of income per person. Hence, on an average, as a worker, I can reasonably expect my income to grow at the per capita GDP growth rate. However, if, for instance, I own financial assets, I do not need to work and yet my average annual returns will be greater than those who work.
India, or more accurately, Indians, are extremely poor as well as highly unequal. More precisely, 93% of Indian households earn less than ₹ 2,50,000 a year (or ₹ 21,000 a month) and therefore are exempt from paying personal income tax. That is, most Indians do not possess an income that can be taxed. At the same time, the richest 1% own 53% of India's wealth according to a Credit Suisse report. Owing to the high return on financial assets, the wealthy get wealthier. Moreover, they are able to use their socioeconomic standing to ensure that their children also have access to a clean environment, good schooling, quality health care, and eventually a job that 'pays' well.
What is scary is that we have uncritically bought the idea that to improve our socioeconomic standing, we have to individually strive to become better.
Our current socioeconomic order gives us time only for work and work-related activities such as traveling to and from work, and increasingly, looking for work too. As Francis Wheen writes in his biography of Karl Marx's Capital, "The average British employee now puts in 80,224 hours over his or her working life, as against 69,000 hours in 1981. ... many people have no time for anything beyond labour and sleep." Many workers in Bengaluru spend around 2 hours a day on an average commuting to and from work. Contrary to our expectations from this socioeconomic order, technological progress has neither resulted in shorter working days nor in higher wages.
Every time, I am out on the roads of Bengaluru, I am struck by our neglectful attitudes towards our common property – lakes, trees, parks, buses, and roads. This is accompanied by a growth in: lake-facing apartments, big SUV vehicles plying on the roads, international schools which guarantee our children seats in MIT and Harvard, trees being felled to make away for the increased cars and school buses, and lakes frothing due to household (and industrial) waste from all the toxic ingredients in the substances we use daily for cleaning clothes, dishes, and our dwellings. I will not be surprised if, in the future, some large gated housing communities partner with schools and hospitals to provide services exclusively for their residents.
In the manner described above, the responsibility to ensure a good life for all has been passed on, rather sold to, all of us, individually.
The death knell of our extant socioeconomic order is and has been ringing, and it keeps getting louder. What is scary is that we have uncritically bought the idea that to improve our socioeconomic standing, we have to individually strive to become better – work harder, save more, and become more efficient and smart. [The burgeoning self-help books industry is testament to this need created by the current socioeconomic order. A 2012 study by Marketdata Enterprises valued the US self-help industry at around $10 billion per year.] And the reasoning continues: after all, our children's educational attainment (aka merit) chiefly depends on their individual hard work; overall ecological improvement depends on individual decisions and actions – of what to and what not to consume; our access to good health care depends on our individual savings, or financial planning, as they call it; our ability to subsist well after our retirement also depends on our individual retirement planning.
In the manner described above, the responsibility to ensure a good life for all has been passed on, rather sold to, all of us, individually. And this idea is deeply flawed in an unequal society like ours because the poor cannot afford to make demands for better public infrastructure and services, and the rich meet their growing needs through purely private means.
(The opinions expressed in this post are the personal views of the author. They do not necessarily reflect the views of HuffPost India. Any omissions or errors are the author's and HuffPost India does not assume any liability or responsibility for them.)