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Excavation of Inequality


I.P. Khosla

CAPITAL IN THE TWENTY-FIRST CENTURY
By Thomas Piketty
Harvard University Press, Harvard, 2014, pp. 685, Rs. 1495.00

VOLUME XXXVIII NUMBER 9 September 2014

The inequalities of income and wealth in our time are blatant. There is a feeling of outrage when we see the opulent demonstratively flaunt their scission from everyone else and contrast the abysmal poverty on display: the hungry waiting outside the kitchens of seven star hotels for what the overfed diners inside have left on their plates; a beggar girl with a baby on one arm at a crossroad, scratching futilely at the window of a hundred thousand dollar car; the hovels of Mumbai crowding a shanty town a stone’s throw from a hundred million dollar home built by a businessman.   Inequality in the distribution of income and wealth has been around in every part of the world since history began. Over the centuries it has been extensively written about, in histories, in social comment, in poetry and novels, among other things like government reports. But, think about it, beyond the moral sentiments that those images arouse, our knowledge of the subject goes neither far nor deep. There is a good deal of anecdotal evidence supported by partial or rudimentary surveys, government statistics about whose reliability we cannot be sure, and that is all that we really had until quite recently, and these did not tell us very much about the four key questions to which answers are needed: how much inequality there is, precisely, how it is distributed between social groups, between labour and capital or between one nation and another and whether numbers can be put on these things; and the related question, the second and more important, whether it is increasing or decreasing over the decades; worldwide or within countries, are income and wealth disparities widening or narrowing? It is probably increasing a little because, though both these are admittedly crude measures, in India, for example, the Gini coefficient has been rising, from 0.32 early in this century to 0.38 today, while, to cite just one more fact, the wealthiest one per cent in the USA, who owned less than thirty per cent of total national wealth in 1970, now own more than a third. Thirdly and even more important, what are the causes of this inequality and whether they can be countered; in other words what are the economic (and political) processes involved in all this? And there is, finally, the most important question of all; whether these processes that lead to inequality are controlled, manipulated, or even ...


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