Ways to narrow rich - poor gap

Across much of the world, the share of national income flowing to labor has fallen over the past 40 years. Taxing the rich in order to fund spending on the poor is a straightforward solution to inequality problem. But the well-heeled are adept at squeezing through tax loopholes, and at marshaling the political clout needed to chip away at high tax rates. Income inequality is the result of bad policies that favor the rich and leave everyone else struggling. A social wealth fund could narrow the gap between the rich and the poor.

• People don't realize how wide the gap between rich and poor has become. Credit masks poverty. We tend to see and associate with people who are like us, economically.
• There's no surer ticket out of poverty than a solid education. But that education has to be affordable and it has to be equally distributed. Poorer students are years behind their richer peers. Richer kids go to a private schools. Poorer students go to a government schools that does not perform well. Education should be a great equalizer, not a source of division. 
• A hard day’s work deserves a fair day’s pay. It's impossible to live on today's minimum wages, which are essentially poverty wages. Decent minimum wages (for 8 hours/day, 6 days/week work) must cover home rent, utility bills, groceries, basic health care expenses, children education and some savings, for a family of 2+2. Today's minimum wages or poverty wages that covers food expenses only, for a family of 2+2. They must be at least be double or treble.
• It's convenient for employers to argue they can't pay higher wages. Their profits indicate otherwise. The reality today is that people who are working full-time are unable meet their family(2+2)'s basic necessities.
• Tax rates on the very rich are so low. While middle class salaried person on an average pays income tax at more than 20% on gross real income, the rich pays lesser than 10% of his gross real income. The rich must be taxed at least 40-50% of gross real income and this additional amount must be spent for better education and health care of lower income groups. Without good education and sound health, one can't work hard to prosperity.
• Give workers a voice in their companies. Worker union's role is is declining since 40 years and their voice shrank to a whisper. Meanwhile, the economy is pushing a greater share of money to the top management. While half of the people view worker unions in a favorable light, the other half continue to see unions as inefficient or annoying, but there are other ways to give workers a voice, such as supporting employee-owned companies.
• Ban political donations by businesses and industry. Let politics get funded by people (individuals only) and government. Compel politicians keep away from influential rich industrialists.
• Give money to the poor -- maybe at random. Randomly giving poorer people cash may not be such a bad idea. A nonprofit organisation which is experimenting with the concept is seeing promising results. The point is not exactly how a program like this should work but that when we trust people -- when we see them as equals -- they can succeed.
• We see rich and poor differently. We assume that these divisions are inevitable. They don't have to be.
• Investing in women (family-friendly work policies, paid parental leave, allowing kids in the workplace etc), agriculture (providing farmers with access to seeds, plant nutrients and production practices, risk mitigation, weather insurance etc) and reforming workplace laws (raising minimum wages and universal basic income etc).

Let us not forget history. The Roman Empire was one of the richest on the planet, with wealth concentrated in the hands of a few senatorial elite and the rest were utterly poor. Warning signs of inequality were ignored and it resulted in civil war and the entire empire collapsed. Do we want that again? Let us collectively work towards making an equitable world.

Caste consciousness

Caste system is a phenomenon related to Hinduism in particular. On the basis of caste, it is fixed at the time of a person’s birth that whether she/he would have higher or lower status in social hierarchy. Castes were first classified according to their occupation. But due to access to wealth, power, and privilege, Brahmins and Kshatriyas started to use religious sanctions to monopolize their position. 

Caste system in India is so rigidly deep-rooted in its socio-cultural and religious life. But in reality it is no God-send virtue to be followed by the people. It has had several exploitative and discriminatory effects on our social order throughout the ages. As a by-product, caste system has given several other social ills to the society such as untouchability.

A Brahmin’s caste pride comes with humiliation for other castes is both the base and superstructure of Indian society. Blindness to caste does not take away the social, political and economical privileges one gets because of one’s accident of birth in a particular upper caste. Anyone belonging to a hierarchically privileged caste is bound to get the advantages of his caste location, willingly or unwillingly, consciously or unconsciously.

To be born in a privileged caste is not anyone’s fault but to refuse to even acknowledge unearned benefits’ accruing due to one’s caste and thereby claiming that the very mechanism that enforces them is absent in one’s life is not right. For the people belonging to the marginalized lower strata of this system, caste is about humiliation, deprivation, oppression and imposed identity.

To be oblivious to caste and indifferent to the caste associations of friends, employees and associates, is no longer enough in today’s caste-conscious India. Caste blindness is an affectation available only to the privileged; the lower castes cannot afford to be indifferent to caste.

Caste discrimination affects millions people and involves massive violations of civil, political, economic, social and cultural rights. Caste systems divide people into unequal and hierarchical social groups. Those at the bottom are considered ‘lesser human beings’, ‘impure’ and ‘polluting’ to other caste groups and subjected to untouchability practices. Untouchables, known as Dalits are often forcibly assigned the most dirty, menial and hazardous jobs, and many are subjected to forced and bonded labor. Due to exclusion, they have limited access to resources, services and development, keeping most of them in severe poverty.

Caste consciousness is not so rigid in Indian diaspora as in India. They have caste feeling but not use it in day to day practices but use it flexibly without causing any harm or ill treatment. Caste identity has been central to the ways in which Indians overseas organised their society. They still look to marry within caste and endorse caste system. People change their names and surnames to get away from low-caste identity. Caste is something that is embedded in the psyche of a person. So, as long as a person's cultural roots are present in a society with caste system embedded in it, this practice is bound to continue. Thus, a second generation emigrant is to have lesser belief in the caste system and so on. Thus caste consciousness is very much present in much of the Indian diaspora.

Although India has a more rigid mechanism of caste system, the struggle of BR Ambedkar was able to grant the lower castes with the incentive of reservation, which is mostly absent in other countries. In Oct 2018, Kerala government has appointed 54 non-Brahmin priests including 7 dalits to the Cochin Devaswom Board. Earlier, 36 non-Brahmins, including six Dalits, were appointed to the Travancore Devaswom Board.

The Constitution mandates that no citizen shall, on grounds only of caste or race, be subjected to any disability and restriction. Nehru had hoped caste would disappear from India’s consciousness. Law can only provide protection from exploitation but it cannot bring attitudinal change in so-called upper castes. The young and modern generation is perhaps the only hope in bringing about the real meaning of social justice in our country.

Wherever a Hindu goes he takes his caste along with him .. Dr Ambedkar 

Living wage

In 2001 a dormant idea with deep historical roots was revived in London’s East End: the living wage. A living wage is the minimum income necessary for a worker to meet their basic needs. Needs include food, housing, clothing etc. Family circumstances vary and no realistic hourly pay rate can ever lift every family to an adequate living standard. The goal of a living wage is to allow a worker to afford a basic but decent standard of living. Due to the flexible nature, the term "needs" varies by location and household type.

• A living wage generally means that a person working 40 hours a week, with no additional income, should be able to afford the basics for a modest but decent life, such as, food, shelter, utilities, transport, health care, and child care. Whereas minimum wage focuses on what the labor market can bear without a significant effect on employment.
• Living wage advocates have further defined a living wage as the wage equivalent to the poverty line for a family of four. The income would have to allow the family to 'secure food, shelter, clothing, health care, transportation and other necessities of living in modern society'.
• The living wage differs from the minimum wage in that the latter is set by national law and can fail to meet the requirements to have a basic quality of life which leaves the family to rely on government programs for additional income.
• Employee, employer, and community all benefited with a living wage. Employees would be more willing to work, helping the employer reduce worker turnover, and it would help the community when the citizens have enough to have a decent life. 
• A living wage, by increasing the purchasing power of low income workers, focuses on stimulating demand in order to improve the state of the economy.
• Low wages and excessive working hours in global supply chains often leave full-time workers and their families to live in poverty. Adoption of a living wage meets workers’ basic needs to maintain a safe, decent standard of living. 
• The real living wage is based on the cost of living and is voluntarily paid by employers who believe a hard day's work deserves a fair day's pay. 
• In UK, far too many people earn far too little to get by. UK has a high share of low-paid workers, with one in five employees in low-paid work. The rate of low pay has risen gradually for the past 30 years. It is most prevalent among women, part-time and younger workers. In some sectors it is endemic; in hospitality, 69% of workers are low paid, in retail 41%. Recent years have also seen gradually rising rates of in-work poverty. While the minimum wage safeguards around one million of these workers from extreme low pay, on its own it is not a solution to the wider problem of endemic low-paid work. 
• Some 23% of jobs outside London paid less than the living wage in 2014, compared with 19% in London.  Local and regional initiatives continue to proliferate, building on a string of successes that have secured improvements in pay for nearly 45,000 low-paid workers. Living wage initiatives have reshaped social norms around wages and in-work poverty and have refocused attention on the role that decent pay above the national minimum can play in raising living standards, alongside remedial redistribution through tax credits and in-work benefits. 
• The Walton family which owns Wal-Mart is the wealthiest family in America and it is absurd that thousands of their low-wage workers are forced to use programs like food stamps, Medicaid and subsidized housing. Wal-Mart should not be paying starvation wages. Struggling working families should not have to subsidize the wealthiest family in the country. 

The real poverty in our society lies with those who are not in work at all, and the implementation of the living wage will do nothing to improve their chances of a job. The solutions for the unemployed are different from those for low-paid jobs and a single measure cannot help both groups and risks harming one at the expense of the other. It is insanity that companies pay small wages and high taxes and the government uses those taxes to supplement to the low wages. It would be better for companies to pay higher wages and for the benefits system to be much smaller, requiring smaller taxes? What is impossible is to pay low wages, low taxes and no benefits.

No business which depends for existence on paying less than 
living wages to its workers has any right to continue in this country.

By living wages I mean the wages of decent living - Franklin D. Roosevelt

There are 400 American billionaires because there are 45 million people living 

in poverty. Profit comes at the expense of the living wage. Corporate executives, 

university presidents, and capitalists in general are living the good life -- because 

so many others are living a life of hardship - Keeanga-Yamahtta Taylor

Elite capture

Elite capture is a form of corruption whereby public resources are biased for the benefit of a few individuals of superior social status in detriment to the welfare of the larger population. 

• Elites are those who enjoy privileged status and exercise decisive control over society. Three-fold classification of elites are (a) knowledge elites, (b) entrepreneurial elites and (c) political elites. 
• Elites are groups of individuals with self-ratifying factors such as social class, asset ownership, religious affiliations, political power, etc have decision-making power in processes of public concern and uses public funds intended to be invested in services that benefit the larger population, to fund projects that would only benefit them. 
• Elite capture is related to information asymmetry, inefficient regulation or inefficient allocation of resources causing biased distribution of a public goods or a services, wherein certain segments of the population experience reduced access to these public goods. As long as there is elite capture, the welfare impact will not be Pareto Optimal* or equitable.*Pareto optimality is simply a statement of impossibility of improving one variable without harming other variables.
• When people have preferences about what other people do, the goal of Pareto efficiency can come into conflict with the goal of individual liberty.
• By yielding power to smaller units, money should be more efficiently distributed, but local governments are more vulnerable to pressure groups. Local governments are even more vulnerable to capture by local elites than national governments.
• Community-based development has inadequate understanding of power relationships at the local level, which leaves room for elite capture.
• An elite derives its status from its relationship to property, whether physical or human capital. While stable property rights are necessary for everyday business, unstable property rights may have a positive impact on economic development. Institutional changes have a positive impact on economic development when a country’s elite can manage them. 
• Counter-elite approach need not necessarily be effective in challenging elite domination, but the co-opt-elite approach risks legitimizing the authority of the elites and worsening poverty by implementing anti-poor policies. The success of dealing with elite capture lies in the flexible use of the counter-elite and co-opt-elite approaches together with the need to secure alternative livelihoods and to achieve empowerment with the poor.
• The role of elites in economic development have a disproportionate impact on development outcomes. While a country's endowments constitute the deep determinates of growth, the trajectory they follow is shaped by the actions of elites.
• Poverty is a problem for the rich in the sense that it generates negative externalities that they would like to reduce, and that the elite believe that there are effective remedies. While reducing poverty is a national priority, elites do not see it as their responsibility to do something about it. Elites feel that through education, poor will be able to take advantage of opportunities and resources and is a solution because everyone can supposedly get richer without the need for redistribution. Elites are failing to create a consciousness that makes them react more responsibly in supporting pro-poor policies.
• Evolution of welfare states inform us that elites’ prioritization of poverty reduction is driven by the extent to which elites and the poor are interdependent, such that the presence of the poor has a positive or negative impact on elite welfare. 

Believers in liberal freedom should worry whether they can prevail
against their own forms of institutional entropy:
elite capture, corruption, and inequality - Michael Ignatieff

Poverty is not an original state

Most wealthy people believe that poor people today have it 'easy' because they can get government benefits without doing anything in return. This is an infuriatingly obtuse view of those who have not known or have long forgotten what poverty truly means. 'Easy' is a word not easily spoken among the poor. Things are hard, the times are hard, the work is hard, the way is hard. 'Easy' is for the willfully callous and the haughtily blind.

Poverty is not an original state, nor are the poor the victims of their own faults and weaknesses. Poverty is self-sustaining. Poverty creates a picture of aimlessness, uncertainty and hopelessness. Once a person is caught in its trap, it is hard to escape the cycle of poverty. It destroys self-confidence and the capacity to organize collective action and response. 

Poverty is a multidimensional phenomenon. Advising poor people to working harder is an useless advice because people are rarely compensated for hard work. They are compensated for skills and smart working. A poor person can't think or plan his old age years. Poverty restricts forward thinking and planning. The daily struggles of the poor constantly humiliate them. There is no possibility of poor people enjoying rights. In poverty there can be no control over one’s life chances or even everyday life.

Development fail to address poverty or to narrow the gap between rich and poor, but widens and deepens this division and ultimately creates poverty, as natural resources and human beings alike are increasingly harnessed to the pursuit of consumption and profit. The rich are great beneficiaries of poverty. It is very cheap to be rich in India. In a poor nation, the social elite can pass through life without facing any competition. The less democratic a nation, the safer it is for the rich.

The attitude we have is running away from the needy and not drawing near to them. Corruption directly brings underdevelopment and spawns poverty. In India poor people vote, and the elected become rich. It’s a government of the rich, for the poor to sustain the poverty. This sounds cynical, but hard facts vindicate the statement.

The global economy on a wildly unequal trajectory is absurd and unsustainable. For getting everyone above poverty line (> $5 per day) would take 100 years, require $1m GDP per person and per capita income about $100,000. As a result, ending poverty under the current model is slow, inefficient and runs into planetary problems. Already the present global economy is in ecological overshoot. A radical shift in distribution to favor the poorest is the only way to reconcile the twin challenges of halting catastrophic climatic change and ending poverty.

The wealth of the super rich in the world can eradicate global poverty TEN times!

In a country well governed, poverty is something to be ashamed of. 

In a country badly governed, wealth is something to be ashamed of - Confucius

If a free society cannot help the many who are poor, 

it cannot save the few who are rich - J F Kennedy

It is expensive to be poor

Most wealthy people believe that poor people today have it 'easy' because they can get government benefits without doing anything in return. This is an infuriatingly obtuse view of what it means to be poor - the soul-rending omnipresence of worry and fear, of weariness and fatigue. This can be the view only of those who have not known or have long forgotten what poverty truly means. 'Easy' is a word not easily spoken among the poor. Things are hard, the times are hard, the work is hard, the way is hard. 'Easy' is for uninformed explanations issued by the willfully callous and the haughtily blind.

• It is extraordinarily expensive to be poor. The less money you have, the more expensive many things are likely to cost. When your income is only just enough to cover your basic living costs, even modest unexpected outgoings can push you into debt. 
• It’s no secret that the poor pay more. The poor pay more by living in food deserts, by having to commute longer distances and stand in longer lines to buy or do just about anything, by not having enough cash on hand to shop when items are on sale, by receiving less efficient. At the same time, prices increase every year, even as wages stagnate. For those who struggle to make ends meet, it means paying for anything takes deeper chunks out of their limited income.
• The more affluent you are, the more likely it is you’ll be able to access credit at low interest rates. Poorest households spend about 25% of their monthly income servicing debts.
• Poor people usually have hard time getting credit. Doorstop lenders and extortionate companies target poorer customers because they are the least likely to have other options. 
• The poor people earnings are more heavily taxed than the earnings of wealthier citizens.
• Minimum-wage jobs are physically demanding, have unpredictable schedules, and pay so meagerly that workers can't save enough to move on.
• Many poor people work, but they just don’t make enough to move out of poverty.
• If you’re earning is just enough to cover rent, food and bills, finding regular extra income can be a struggle.
• Easy credit has been similarly disastrous for households struggling to make ends meet. Government policies have only exacerbated this situation.
• The homelessness and crippling debt are being inflicted deliberately, in an act of sadism.
• The current situation – where people are forced into crippling debt trying to sustain themselves and their families – is a genuine moral catastrophe.
• Low-income households are facing a difficult 2018, with rising prices, frozen benefits and a wage squeeze all putting further pressure on household incomes.
• The poor man's hardships are endless, but the point is: Being poor is anything but easy.

The rich get richer, and the poor get poorer. 

Poverty, human rights & dignity

Poverty is not an original state, nor are the poor the victims of their own faults and weaknesses. Nor is it due to shortcomings in personality or morality, or failures in family or upbringing. Poverty is about exclusion, physical and economic insecurity, fear of the future, a constant sense of vulnerability. Poverty is created by societies and governments. Poverty is experienced as individuals, family and communities. Poverty is embedded in complex of policies, interactions and relationships.

• Poverty is self-sustaining. In the modern economy, once a person or group is caught in its trap, it is hard to escape the cycle of poverty. It destroys self-confidence and the capacity to organize collective action and response. 
• Economic globalisation, which include the privatisation of state resources and functions, and the introduction of charges even for the most basic needs reinforce the cycle of poverty by cutting off possibilities of social mobility. 
• A powerful economic and political class emerges on the back of this poverty, with no interest in social reform, creating further obstacles to equitable distribution of resources. In this way poverty leads to social exclusion.
• Poverty negates the realisation or enjoyment of human rights. The purpose of human rights, a life in dignity, is rendered impossible by poverty. The daily struggles of the poor constantly humiliate them. 
• There is no real possibility of poor people enjoying rights, whether civil and political or social, economic and cultural, without resources such as education, physical security, health, employment, property, participation, and due process - all of which poverty negates. In poverty there can be no control over one’s life chances or even everyday life.
• Existence in hovels without the basic amenities of life allows no time or ability for self-reflection, essential for identity, self- realisation, or making moral judgments. Poverty generates habits of subservience and docility that denies the premise of the equality and dignity of all persons. 
• Poverty also forces persons into slavery and bondage, and stories of parents selling children into slavery out of desperation are now common place in states like India, Bangladesh, and Nigeria - and many other parts of the world. 
• A poor man cannot support his family and tends to draw away from it, burdening the wife with additional responsibilities to sustain the family.
• Poverty creates or reinforces divisions within the family, in which the male members get priority over scarce family resources. In this way poverty subverts decent and fulfilling family life. 
• Family is the natural and fundamental group unit of society which is entitled to protection by society and the state.
• Poverty not only deprives and demeans the poor but also affects the affluent and society. It sharpens inequalities and leads to crime, law and order, as the poor resort to various forms of self-help to eke out a living, including thefts and robberies. Security becomes an obsession for the middle classes, turning their suburbs into fortresses. The slums that grow out of poverty breed diseases and environmental degradation that can scarcely be contained within the confines of the slums. 
• In the modern age poverty poses a major threat to social consensus and political stability. Poverty erodes the moral fibre and the moral cohesion of a society. It destroys the self-confidence of the people caught in the cycle of poverty, and leads to the waste of resources. 
• Ideology is used to justify the limits on the role of the state in providing social welfare. Disparities of opportunities and incomes have increased in recent years. The poor can make themselves heard only by irregular demonstrations, to limited effect. 
• We need fundamental social and economic reforms to ensure all its residents a decent life in dignity which is so eminently within reach, based on its wealth and resources.

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Dignity

Dignity is defined as the quality or state of being worthy, honored, or esteemed. Dignity is as essential to human life as water, food, and oxygen. The stubborn retention of it, even in the face of extreme physical hardship, can hold a man’s soul in his body long past the point at which the body should have surrendered it. Without dignity, identity is erased. In its absence, men are defined not by themselves, but by their captors and the circumstances in which they are forced to live. Apartheid was a clear case of direct attacks on individuals’ dignity and this was not limited to a few individuals but on multiple generations of native South Africans. How an individual reacts when his or her dignity is violated. The most common reaction is to keep reliving the torment through flashes and nightmares and eventually convincing oneself that the only way out is to seek revenge. Loss of dignity is a gradual loss of individuality.

• The saddest thing in the world is not poverty per se; it's loss of dignity.
• Those at the bottom of the economic ladder lack dignity, and it is the job of the rest of the world to help give it to them.
• Some of the poorest people are the most dignified. And some of the richest lack dignity. If I fail to treat someone with dignity, it is me, not them, who is undignified.
• Extreme poverty is undignified – sometimes communities or individuals do find themselves helpless and in need of crisis or ongoing assistance. Whether in city or countryside, very poor people tend to work for a better life.
• Former president of Haiti Jean-Bertrand Aristide has pleaded “help rebuild the country, moving from misery to poverty with dignity".
• Amartya Sen (and others) defined development as freedom rather than just economic or social progress, and the concept of dignity takes us a step further along that road.
• It is said that if you can’t measure it you can’t manage it. While most poverty measures are disputed, dignity is perhaps the one thing that humans across the globe, in myriad different contexts, most instinctively recognize and long for.
• Dying with dignity is the greatest shift in morality in this generation. If a person is diagnosed with a terrible terminal illness, or is in intolerable pain, why force that person to suffer? There is a big difference between suicide, euthanasia, and dying with dignity. Suicide is self-inflicted. Euthanasia is ending life without consent. Dying with dignity is neither suicide nor euthanasia; it is respect for the individual. An adult who, for very good reasons, consents to die should have that right. Frostbite would not be a good reason. 
• Each person has a sense of worth or value, sense of the price of his personality, his dignity. Personality, dignity, is the center of attention in people’s relationships. Demeaning of dignity is almost the only reason for conflict. Those who lost it are humiliated.
• The genuine price of a man is the truth about him. Everything that increases a man’s dignity is goodness, everything that decreases it – evil. 
• Internal freedom is freedom from fear of being judged, of being charged a low price, and freedom from doubts about dignity. The only fear an internally free man has is fear of going against his conscience. Society knows freedom when its people know dignity.

Income tax reduction doesn't impact economic growth

No one likes to pay taxes, particularly more taxes. Discussions about tax rates rouse emotions as discussions about where those taxes are spent. The influence of tax rates isn’t as significant as the emotional response to them might suggest. The basic question is: Do tax rates—by adding money when cut or subtracting money when raised—result in economic growth or contraction, meaning more or fewer jobs? The structure and financing of a tax change are critical to achieving economic growth. If the tax cuts are not financed by immediate spending cuts, they will result in an increased budget deficit, which will result in inflation and increased interest rates. The net impact on growth is either small or negative or uncertain. Base-broadening measures can eliminate the effect of tax rate cuts on budget deficits. They may also reallocate resources across sectors toward their economic use, increased efficiency and raising the overall size of the economy. All tax changes will not have the same impact on growth. Reforms that improve incentives, reduce subsidies, avoid windfall gains, and avoid deficit financing will have more auspicious effects on the size of the economy, but may also create trade-offs between equity and efficiency. 

• The tax policy can influence economic choices, it is by no means obvious that tax rate cuts will ultimately lead to a larger economy in the long run. 
• The income tax rate cuts would raise the after-tax income to working, saving, and investing, they would also lessens their need to work, save, and invest. The first effect raises economic activity, while the second effect reduces it.
• Tax cuts financed by immediate cuts in unproductive government spending could raise output, but tax cuts financed by reductions in government investment could reduce output.
• If they are not financed by spending cuts, tax cuts will lead to an increase in government borrowing, which in turn, will reduce long-term growth. 
• The historical evidence and analysis suggest that tax cuts that are financed by debt for an extended period of time will actually reduce growth.
• Tax reform is complex, as it involves tax rate cuts as well as base-broadening changes. Such changes should raise the overall size of the economy in the long-term, but the magnitude of the impact are uncertain. 
• Broadening the tax base by reducing or eliminating tax expenditures raises the effective tax rate and hence will operate in a direction opposite to rate cuts and mitigate their effects on economic growth. But base-broadening has the benefit of reallocating resources to sectors that have the highest economic return, which should increase the overall size of the economy.
• A well-designed tax policies have the potential to raise economic growth, but there are many stumbling blocks along the way and certainly no guarantee that all tax changes will improve economic performance. 
• A tax change will be more growth-inducing to the extent that it involves (i) large positive incentive effects that encourage work, saving, and investment; (ii) small or negative income effects, including a careful targeting of tax cuts toward new economic activity, rather than providing windfall gains for previous activities; (iii) reductions in distortions across economic sectors and across different types of income and consumption; and (iv) minimal increases in, or reductions in, the budget deficit.
• Debt-financed tax cuts will tend to boost short-term growth, but also tend to reduce long-term growth, if they are financed eventually by higher taxes. Second, revenue-neutral income tax reform can provide a modest boost to economic growth.
• The tax rate on the average American was around 21% in 1947 and declined to around 15.5%, in 2015. The tax rates for the highest earners dropped from 86.45% in 1947 to 39.60% in 2015.  During this period US economy (GDP) grew from $243 billion in 1947 to $18,905 in 2017. Over that period, taxes increased and decreased; wages climbed and dropped; interest rates rose and fell; and so on. But GDP grew year after. It grew because something other than money drives the spirit.
• Income beyond $250,000 per annum gets tossed into savings & investment account and gets utilized for vulgar spending like gambling, trading, holidaying, ornaments, real estate, vulgar homes, money laundering etc and taxing this money doesn't make any difference to anybody.

Tax cuts that target new economic activity, reduce distortions to the allocation of capital, and are not deficit financed are more likely to lead to economic growth. Advanced countries that decrease their tax rates do not experience less economic growth as changes to the top individual income tax rate are not associated with economic growth. Studies show that the US economy has not grown in conjunction with large changes to individual income tax policy. In summary, the impact of tax cuts on growth depends on how the tax cut is financed and the assumed international capital flows. Failure of capital to flow internationally reduces the likelihood of success of tax rate cuts.

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The income tax created more criminals 

than any other single act of government ... Barry Goldwater

Almost all studies indicated that, income tax reduction has significant and negative impact on economic development. Hence income tax reforms aiming to reduce tax rates benefits only rich to become much richer and is in violation principles of democracy and equality. The present tax regime which taxes class four employees is ridiculous while almost all businessmen pays meager taxes that never exceed 10% of their real income, where as TDS deductions for salaried class starts at Rs.2.5 lakhs pa. The suggested rationalization of tax rates to be as under with stringent penalties for violations.

Since broadening tax base has evil aim of taxing the poor while doling out concessions to the rich with other hand and is unacceptable non-sense as it results in much work and little gain. Riches beyond certain point neither increases consumer spending nor capital accumulation but goes into unproductive spending & laundering that burdens the economy and abuses nature. While intelligence, talent & hard work must be rewarded, the high:low wage ratio of over 10,000 is untenable and must be brought to acceptable 200. Extreme poverty must be subsidized heavily and extreme wealth must be taxed heavily.

The insanity of endless growth

Almost all governments, business, media and both the political ‘left’ and ‘right’ are busy extolling endless growth on a planet which is finite. Clearly endless economic growth is impossible, and its pursuit unsustainable and unethical and such destructive pursuit of the impossible is insane. Humanity is totally dependent on the biosphere and it is degrading. Hence society needs to realize that we are way past sustainable ecological limits. 

• The most drastic effects of the rise of economic growth are the impoverishing of democracy, the loss of liberty, and the abandonment of equality. We must subject the economy to the ideals of democracy, liberty, equality, and unity. The drivers of free-market system are causing interrelated problems and if we are to turn our nation from this path of folly, we must first abandon the faulty assumptions that drive our thinking. The four pillars of capitalism - endless economic growth, ever-increasing productivity, accelerating technological advances, and self-interest must be abandoned. Economic insanity challenges people to stop looking for answers within the system and look instead to changing the system.
• The reality is that endless economic growth on a finite planet is unsustainable, especially if society has exceeded ecological limits. There are ‘limits of growth’; and the ‘endless growth mantra’ within society is unsustainable. The three main drivers of ‘unsustainability’ are overpopulation, over consumption and the growth economy. 
• The ‘decoupling’ strategy by switching over to renewable sources of energy etc has its merits and limits, and at best a partial solution to the problem. The key social problem is denial of our predicament along with the contribution of anthropocentric modernism as a worldview that aids and abets that denial. At best attempts at decoupling slow down the rate at which things get worse. Talk of 100% decoupling is likely to be merely a wishful thinking.
• Human population growth and the concomitant increase in the consumption of resources would exceed planetary limits around the middle of the 21st century, causing societal collapse. The Global Ecological Footprint now stands at 1.6 Earths. The Living Planet Index has declined by 58% between 1970 and 2012.  The species extinction rate is at least 1000 times normal. At least 60% of ecosystem services are degrading or being used unsustainably. We are bankrupting nature and consuming the past, present and future of our biosphere.
• Economic growth is seen as the panacea for almost all societal ills. Commitment to growth is being promoted in the guise of free trade, competitiveness, productivity – or even as sustainable development which is an oxymoron. Sustainable development requires a GDP growth rate of 5%, doubling output every 14 years. Economic growth can't be the cure for poverty, unemployment, debt repayment, inflation, population explosion, and so on.
• The idea of benefits of growth would trickle down and alleviate global poverty has failed. The verb ‘to grow’ has become twisted; its original meaning is to spring up and develop to maturity, a steady state. To grow beyond a certain point is disastrous. It is possible to develop scenario where full employment prevails, poverty eliminated, people have more leisure, and greenhouse gases drastically reduced, with low or no economic growth. It is a mistake to assume that economic growth is a necessity for full employment.
• Once we have exceeded ecological limits, growth will make us worse off with uneconomic growth. Products scarcity leads to advocacy of even more growth. This becomes a death spiral. Healing our world requires accepting the reality that the economy cannot grow forever. 
• A dismissal of ecological limits and the rapidly worsening environmental crisis indicates many are still in denial of the insanity and unsustainability of endless economic growth. Many things change and solutions become easier if we change our worldview and ethics. Society needs to return to ecocentrism and adopt an Earth ethic and undertake the work of repairing the Earth and changing to a worldview of ecocentrism to step on the path to a sustainable future.

We have been locked into an insane growth fantasy for two centuries, but the past does not mandate the future. It is time now to grow up. We need to acknowledge the scale of the problem, abandon denial, and move towards a major shift in worldview. This is a big task, but also an exciting, positive challenge – one nobody should deny.

Read the source article

Four Earths would be needed if everyone lived like Americans.

All progress is precarious, and the solution of one problem 
brings us face to face with another problem ... Martin Luther King, Jr.

Growth mantra has simply made rich much richer while poor remained poor. The disparity between rich and poor has widened like never before. This trend can't go on forever. In order to retain our humanity in the face of ecological limits, we would have to confront inequality head on. If wealth were divided equally among the all the people in the world, the per capita material affluence would drop significantly. Global society has already entered the phase where the capacity to grow, to generate real new wealth, is declining. When growth stops, tensions mount. Only the tyrannical state, with its monopoly on violence, its enormous bureaucracies, its tentacles reaching into every facet of life, will have the power to save us from the stupidity called the freedom to grow forever. 

Extreme wealth is indefensible

What is difficult to understand about those who make millions of dollars a year is why they ever need that kind of money for? Who could ever use that much? What are they even spending it on? Why do they actually want it?

• These people live like monarchs. They live in almost ludicrous luxurious excess.They make no effort to curb their consumption. 
• When they want something, like a piece of designer clothing or a fancy dinner, they simply buy it. An expensive meal does not require an occasion. If the family wants to go out to a pricey restaurant, they just do it.
• They don’t have to do household chores. Everything is taken care of by the housekeeper, gardener, housemaid, driver etc. It is difficult to fathom living like this.
• Yet most of their income still just gets tossed into their savings account. This is truly extraordinary. 
• Whether increased taxes on the wealthy will have useful consequences is arguable. What is unimaginable is that increased taxation would deprive these people in any serious way.
• These people donating to charities may not exceed 1% of their annual income. It’s almost as if they care far more about feeling like they are charitable than actually being charitable.
• They rarely encounter criticism for the moral aspects of this kind of life. In wealthy circles, everyone has a strong interest in allowing each other to feel like they are good people. So if one person mentions about their donating to charities, the friend is unlikely to criticize. Rarely do elites tell other elites that it is wrong to be an elite, for obvious reasons. 
• And the most contact this person has with the working class probably comes during chance encounters with the pool man, who is unlikely to voice any judgment he may secretly hold about their decadent bourgeois habits.
• Even $400,000 annually is far too much to live on. It is very difficult to even grasp the amount of money possessed by the 20 people who own more than half the country’s wealth. If it takes a lot of effort to fritter away $400,000 each year, imagine how the billionaires struggle to think of things to buy. That’s why their spending becomes outright ludicrous. Once you go past the first million, there’s not really much more pleasure you can buy, so you have to resort to nonsense.
• The tax policy implications are debatable. But it’s uncontroversial to conclude that the possession of enormous wealth, especially in a time of great suffering, is just indefensible in every way. Even $400,000 a year provides enough to live in extreme luxury. Anything over that is just obscene. 
• Risk-taking investors deserve higher returns, but actual returns do not necessarily reflect merit. The determining quality of  billionaires is to be lucky -- the other qualities being necessary but not sufficient. And luck is not meritocratic.

Inequality does not cause poverty. Capitalism has resulted in much more economic inequality in China, but much less poverty. Studies have shown that lower taxes for the wealthy don't necessarily result in increased economic growth. Extreme wealth contributing to inequality were seen as irrelevant and a prerequisite for the growth that would also help the poorest, as the wealth created trickled down to the benefit of everyone. But rather than creating jobs and lifting others out of poverty super-rich minorities cause social unrest and depress demand for goods and services, limiting growth and innovation as a result. Extreme wealth causes extreme inequality that impedes poverty alleviation, slows economic growth, compounds gender inequality, drives inequality in health and education outcomes, undermines economic mobility over generations, fuels crime, undermines social cohesion, and harms democracy.

Read the source article

That man is rich, whose pleasures are the cheapest ... Henry David Thoreau
Honesty is incompatible with amassing a large fortune ... Mahatma Gandhi 

At least 50% of the world’s billionaire wealth is non-meritocratic owing to either inheritance or a high presumption of cronyism. Another 15% is not meritocratic owing to presumption of monopoly. All of it is non-meritocratic owing to globalization. By contrast, crime and technology are found to be negligible sources of extreme wealth. The argument that "These eight billionaires, through the salaries and stock paid to their employees and the stock owned by millions of shareholders, have made millions of people rich and improved the lives of billions of people through the use of their products. They have not made anybody poor." is fine but governments must tax them at higher tax rates and spend the proceeds for accelerating eradication of poverty. These billionaires have a greater obligation for contributing for this cause. 

Development and poverty

POVERTY

• Poverty is present everywhere. Manifestation of poverty is a challenge.
• Poverty and development are two sides to a coin. Where there is poverty, there may not be development.
• Poverty is not only a lack of money to take care of basic necessity of life it creates a picture of aimlessness, uncertainty and hopelessness in the mind of the poor. 
• An unhealthy or poor population produces less and may be forced into practices damaging the environment. It is the poor people who suffer most acutely from lack of development. 
• The poor are anxious about the future in regard to the national political life, degradation of the environment, the high rise of inequality among people coupled with mass unemployment.
• The high level of selfishness in the society with people looking only to their needs and fearful of others. Corruption is endemic. Crime rate is high and the future of generation yet unborn is clouded with uncertainty.

DEVELOPMENT

• Development is often socio-economic, political, science and technology biased. 
• The concept of development is a complex one. Its difficulty is not only in terms of definition or description but also in terms of measurement. 
• Lack of infrastructure, deep seated corruption, various forms of conflict, bad governance and poor healthcare facilities cannot promote a healthy population committed to work for progress and development.
• GDP as the measurement does not say anything about the distribution of total income of its country. It does not capture the totality of the development situation of the country.
• The people are both the means and the end of economic development.
• Human beings are at the center of concerns for sustainable development. 
• They are entitled to a healthy and productive life in harmony with nature.
• Development cannot be merely economic development or GDP as important as that may be. 
• Development must include the conditions of reality that allow people to take their destiny into their own hands, individually and collectively involving economic, social, political, psychological, environmental, cultural, religious and international dimensions. 
• Development is the ability and capability of the people to procure sufficient natural resources to meet the basic needs of all in a self-reliant manner.
• The situation of the bottom forty percent of society is often bypassed by development and government.
• Human welfare is the ultimate end of development not economic indices.
• The welfare of the human person in its totality is the good health of a person and his skills cultivated through educational programmes as his endeavours add to the wealth of his nation.
• Development strategy should be people centred and community participation must be evident. Any project that people/community cannot identify with will collapse. 

SUSTAINABLE DEVELOPMENT

• World Commission on the Environment and Development (WCED) defines sustainable development as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’
• WCED posits that the present generation has been reckless and wasteful both in its exploitation and use of natural resources by pursuing a series of socio-economic and industrial policies which endangers global environmental security. It condemned the inequalities with and among nations and called for a restructuring of contemporary economic relations to guarantee an equitable distribution of national and international wealth.
• The International Economic System (IES) is primarily profit orientated. Consequently, everything could be sacrificed on the altar of profit to the detriment of development of peoples and individuals, the often stated corporative responsibility of multinationals.
• Can accountability and transparency be found in their political intercourse?
• Poor countries are without development and citizens may not be able to compete with others because of lack of necessary capital, the technical-know-how and expertise. Symbiotically, without development poverty may not be eradicated. The solution to the dilemmatic situation is to confront the reality of poverty and challenges of development simultaneously, nationally and internationally.

There is no humiliation more abusive than hunger ... Pranab Mukherjee

Any kind of development that don't benefit bottom 40% of people, environmentally sustainable and generate mass employment is not a development at all. The trickle down theory, the standing rationale for our economic reforms, doesn't not address the aspirations of the poor people and eliminate poverty is unacceptable nonsense. Health, drinking water, sanitation, education, skill development and empowerment with adequate capital are essential for poverty eradication and meaningful development of poor people especially in rural India. Govt spending meager 2.27% on healthcare and 3.70% on education in the current budget against a minimum of 5-6% indicates empathy deficit towards the poor people of India. Even these meager allocations are towards high end spending rather than improving PHCs and schools. Hyped disruptive economic reforms Demonetisation & GST continuum have impacted poor most with loss of livelihoods and incomes and driven towards desperation and our rulers thought fit to turn a Nelson's eye.

Gujarat model OR Gujarat muddle?

Scholars have shown that Gujarat’s development achievements are actually far from dazzling. The State has grown fast in the last twenty years. And anyone who travels around Gujarat is bound to notice the good roads, mushrooming factories, and regular power supply. But what about people’s living conditions? Whether we look at poverty, nutrition, education, health or related indicators, the dominant pattern is one of indifferent outcomes. Gujarat is doing a little better than the all-India average in many respects, but there is nothing there that justifies it being called a “model.” Anyone who doubts this can download the latest National Family Health Survey report and verify the facts.

• Development economist and activist John Dreze today said there was "no evidence" that the so-called "Gujarat Model" was a model in any sense, pointing out to the state's backwardness in social indicators.
• Almost all ranking of development indicators, whether it is social indicators, human development index, child development index, multi-dimensional poverty index and all the standard poverty indexes of the planning commission. Gujarat almost always comes around the middle.
• It was the case much before Modi became chief minister and it remained the case after that, said Dreze, who helped draft the first version of NREGA (now called the MNREGA).
• He describes the Gujarat's development model as a counter-example, because of the disappointing social indicators inspite of the high growth in terms of standard economic indicators.
• Dreze believes that something lacking and it can be an illustration of the limitations of relying on private-enterprise growth for development in the larger sense.
• Commenting on ratings-agency Moody's recent upgrade of India's sovereign-credit rating to 'Baa2' from 'Baa3', Dreze says he doubts the credibility of such an index. "If you dig into the methods behind these indexes, there is very little to them, except that they are taken seriously!"
• He also raised concerns about the Aadhaar scheme, fearing that it will create an infrastructure of surveillance. His opposition to Aadhaar was not related to welfare programmes, but civil liberties. Aadhaar multiplies the power of the state to keep track of everybody over time - he said, flagging apprehensions that it could lead to stifling of dissent, as a lot of the databases that are going to be linked will become accessible to the government.
• Dreze partly blamed the stagnation of agricultural growth for the unrest and the recent agitations of Patidars, Jats and others for reservations. The people, who have seen the size of their landholding shrink with the population explosion in the last few decades, have certainly suffered. That creates a sense of grievance, but there must be other things also.

 

Read the article "Gujarat Muddle" dated April 11, 2014

Any development model with Public Private Partnership (PPP) is fundamentally flawed and unsustainable because it enables few enterprising people become extraordinarily rich at the state expense, breeding corruption and impoverishes the state and its people. The state ends up paying huge amounts of money in future payments in the range of 2-10 times. Consequently rich poor divide will increase. Modi's Ahmedabad-Mumbai bullet train is another white elephant in disguise which will enable Japan loot away our money perennially. Development based on market borrowing is not development at all but is similar to selling family silver for fancy expenses. 

India slips to 100/119 in Global Hunger Index!

 

 

Insanity is defined doubling the speed in wrong direction

It is a matter of shame that our politicians tell us that our's is most powerful economy in the world where as the reality is we are in the club of Bangladesh, Cambodia, Nepal, Iraq, Pakistan, Afghanistan and North Korea with half of the population either hungry or malnourished. Let someone remind Modi that his primary job is here with poor & lower classes not with Ambani's & Adani's and we don't need bullet trains but we need safe & affordable trains and that we just need schools, nutrition, healthcare, drinking water, sanitation, transportation, jobs and livelihoods for decent living. Spectacular publicity, self aggrandizement and Mussolini type fascism leads us to nowhere. People trapped in poverty can't just work hard to come out of that. They need external helping hand. That is the primary responsibility of the Government. Anything else is next. Modi must understand this. Knowing his personality, I am sure he will not. The irony is that one half of India is grappling with obesity and diabetes spending crores of rupees for getting treatment in corporate hospitals for over eating while the other half is either under fed or malnourished.

Poor people don't work. Why?

• Poverty is not just life below the poverty line, its living under financial stress, where it is difficult to maintain quality of life. A life in poverty means living deprived of sufficient food and nutrition, education, proper shelter, sanitation, clean water and so on. This points to the need of seeing poverty as a multidimensional phenomenon.
• We are all children of one and the same God and, therefore, are absolutely equal.
• Poverty in India is attributable to (i) social inequality leading to exclusion and marginalization (ii) illiteracy (iii) population (iv) gender inequality (v) unequal distribution of wealth (vi) faulty economic reforms (vii) corruption and (vii) colonial rule.
• India has more than 400 million (30% of total population) people under the poverty line. In 1947 when colonial British left India, they left 70% Indians in deep poverty. Seven decades later, poverty is down to 30% despite the multi fold increase in population. Despite the progress, even 30% poverty means a huge headcount in a country of 1.3 billion people. 
• UNDP in its 2017 report estimated India’s poverty at 41% i.e. 528 million.
• There are lazy poor people just as there are lazy rich people and laziness is not the only cause of poverty. There are many factors such as economic instability, cultural discrimination, physical or mental disability, or familial problems. 
• Many people ignore the poor, justify their dislike of the poor, or view their poverty as deserved because they think that those in poverty could come into wealth if they just worked harder. 
• Working harder is an useless advice and an even more ridiculous mindset. In a free market society, people are rarely compensated for hard work. They are compensated for valuable skills and smart working.
• Poor people may be born poor, but they don't have to remain that way. They choose to remain poor. Coming out of poverty is neither easy nor hard. External helping hand is essential to come out of poverty quickly.
• A poor person can't think or plan his old age years. Poverty restricts forward thinking and planning. 
• Work is a pillar of our society. It supplies income that enables families to thrive, fosters a sense of pride and belonging, provides dignity and purpose. For these reasons vast majority of prime-age people work for pay. 
• Few of poor don't work, which robs them of this sense of purpose, affects their families’ prospects for prosperity.
• The presumption is that poor don’t earn enough or work hard enough.
• The reasons poor not working primarily is females with children citing family and home responsibilities, and others citing disability and illness.
• To meaningfully reduce poverty, public policy must focus on improving the health of poor, decrease work disincentives and providing work supports to poor parents such as disability assistance.
• But when a lack of employment leads to poverty, it raises important questions about the role for government. Government can make poverty less painful through income transfers etc, but the question is whether government can encourage those who prefer not to work.
• We can either accept the status quo of leaving millions of people in poverty, or continue funding large government programs that transfer income from working taxpayers to the nonworking poor.
• In India, the labor force participation rates* among prime-age workers have declined over the past three years from 48% to 43% suggesting that India is facing a work problem. China's labor force participation rate is 71%, in USA it is 64% and world average is 63%.
  *The labor force participation rate is the percentage of the population that is either employed or unemployed.
• The children growing up in a poor family just need to work hard to escape poverty.  Poverty has been proven to be a leading contributor to a child’s social, emotional, and behavioral problems. For children, poverty is an extremely difficult situation to overcome; and even if the children overcome it, they run the risk of being damaged by it for life. Children living in poverty are at an extremely high-risk for mental and physical disorders, due to lack of nutrition, physical stimulation, and emotional development.
• In USA, the reality is that one in six Americans lives in a household that is “food insecure”.
• The rich are great beneficiaries of poverty. It is very cheap to be rich in India. In a poor nation, the social elite can pass through life without facing any competition. The less democratic a nation, the safer it is for the rich.

Poverty is easy to spot, but hard to define.

Those parts of India which have been longest under British rule are the poorest today ...  Nehru

India is a rich country inhabited by very poor people ...  Manmohan Singh

As opposed to the western ‘trickle down’ capitalism India needs a comprehensive “human development” plan in order to really crush the widespread poverty. The present economy based on GDP growth, India is only promoting inequality that sustains by keeping the poor in poverty. It needs an economy that supports millions of small and medium enterprises that are suitable to employ low skilled poor people. Agriculture must be made sustainable and remunerative. Focus on good governance to root out corruption. Promote women empowerment through education and healthcare to deal with population growth. 

Development is not a buzzword but a toxic word

Despite its widespread usage, the meaning of the term ‘development’ remains vague, tending to refer to a set of beliefs and assumptions about the nature of social progress rather than to anything more precise. Development fail to address poverty or to narrow the gap between rich and poor, but in fact it both widens and deepens this division and ultimately creates poverty, as natural resources and human beings alike are increasingly harnessed to the pursuit of consumption and profit. The survival of the planet will depend upon abandoning the deep-rooted belief that economic growth can deliver social justice, rational use of environment, and human well-being.

• The word ‘development’ as a buzzword is in vogue for almost 60 years and its actual meaning is still elusive, since it depends on where and by whom it is used.
• Everyone uses it as she or he likes, to convey the idea that tomorrow things will be better. 'Development' has been widely used as a hard drug, addiction to which may stimulate the blissful feelings that typify artificial paradises.
• President Truman merely wanted to include in his 1949 Inaugural Address as a fourth point that would sound ‘a bit original’. So from the very beginning, no one not even the US President really knew what ‘development’ was all about. This did not, however, prevent the word from gaining wide acceptance.
• There was an unquestioned assumption that “development”, whatever it was, could lead to improvement in the situation of 'poor people’. And no one cared to define it properly.
• Any measure (foreign investment, lowering or raising of trade barriers, well-digging, literacy campaigns, etc) was justified ‘in the name of development’, making even the most contradictory policies look as if they were geared to ‘improving the lives of poor people’. This trick has been highly instrumental in preventing any possible critique of ‘development’, since it was equated almost with life itself.
• During the cold war period (1947-1991), the great powers disagreed on almost all issues except one: ‘development’, the magic word that reconciled opposite sides. Its necessity and desirability were not debatable, and the two ideological adversaries vied with each other in promoting it across what was then known as the Third World. ‘Development’ was mainly used as an excuse for enticing ‘developing countries’ to side with one camp or the other.
• This political game turned to the advantage of the ruling ‘elites’ who were influential in international arenas, rather than grassroots populations.
• To reconcile the requirements to be met in order to protect the environment from pollution, deforestation, the greenhouse effect, and climatic change and to ensure the pursuit of economic growth that was still considered a condition for general happiness has resulted in the coining of the catchy phrase ‘sustainable development’, which immediately achieved star status.
• It is impossible to bring together a real concern for environment and the promotion of ‘development’. ‘Sustainable development’ is nothing but an oxymoron, a rhetorical figure that joins together two opposites such as ‘capitalism with a human face’ or ‘humanitarian intervention’. Hence the battle to define what ‘sustainable development’ is really about.
• The ‘new era of economic growth’ was certainly not in favour of those who considered environmental sustainability a top priority. Despite increasing concerns for the environment protection, but the popularity enjoyed by the idea of ‘sustainable development’ is overwhelming. Increasing number of people feel that something has to be done to lessen the impact of human activity on the biosphere due to the mounting environmental crises. And yet, ‘development’ whether sustainable or not remains high on the agenda, and no one seems about to forsake it.
• Irrespective of ideologies, no politician would dare to run on an election platform that ignores economic growth or ‘development’, which is supposed to reduce unemployment and create new jobs and well-being for all. Small investors and ordinary people expect an increase in profits or wages. ‘Development’ has become a modern shibboleth, for anyone who wishes to improve his or her standard of living.

The undeniable success of ‘development’, linked to its undeniable failures in improving the condition of the poor, therefore needs to be called into question. Those who are ready to recognise that ‘development’ has not really kept its promises are also loath to discard the notion altogether. Failures, they would say are from erroneous interpretation or ill-considered implementation. After all, God himself may not answer all our prayers or grant all our requests, but his righteousness remains beyond doubt. In a nutshell, ‘development’ could be defined as: the essence of is the general transformation and destruction of the natural environment and of social relations in order to increase the production of commodities (goods and services) geared, by means of market exchange, to effective demand. 

• A country is the more ‘developed’ the more limited the number of free things that are available: to spend an afternoon on the beach, to go fishing, or enjoy cross-country skiing is nowadays impossible unless one is prepared to pay for it.
• In a ‘developed’ country, human beings are also turned into ‘resources’ and are expected to know how to sell themselves to potential employers. Prostitution may be officially condemned, but it has become the common lot: everyone is for sale.
• Poverty is proof of the ‘good health’ of the capitalist system. It is the spur that stimulates new efforts and new forms of accumulation. Economic growth – widely hailed as a prerequisite to prosperity – takes place only at the expense of either the environment or human beings. 
• World segregation is such that those who enjoy a so-called ‘high standard of living’ hardly come into contact with the poor and may thus cherish the illusion that their privileged circumstances may sooner or later spread to humankind as a whole. But climatic change, the greenhouse effect, and nuclear clouds cannot be contained and affect everyone, rich and poor alike, perhaps in the not-too-distant future. This is the real meaning and the real danger of globalisation. 

It is clear that ‘development’ is not a buzzword but a toxic word. It has been used time and again to promote a system that is neither viable, nor sustainable, nor fit to live in. The benefits that it still confers on a tiny minority are not enough to justify its continuing acceptance, in view of the lethal dangers that it entails. This is being progressively admitted. Given the amount of information that have been gathered on the manifold man-made hazards that impinge on our daily lives, why is it that we do not believe in what we know to be certain? The answer, probably, lies in the fact that our belief in ‘development’ is still too strong to be undermined by the scientific certainty. A change could be conceivable if we recall the Amerindian wisdom that teaches us that ‘we hold the earth in trust for our children’. It is high time to debunk the ‘development’ buzzword. To do so means that we must define it relying on actual social practices, rather than wishful thinking. We must be aware of its inclusion in a corpus of beliefs that are difficult to shatter, expose its mischievous uses, and denounce its consequences. The most important thing is that there is life after ‘development’ – certainly a different one, but there is no evidence to suggest that we would lose on such a deal.

All progress is precarious, and the solution of one problem brings us 

face to face with another problem - Martin Luther King Jr

Development as a buzzword - Gilbert Rist

In India there would be no speech by politicians or officials or anybody without reference to the buzzword 'development' which in fact justifies, promotes and expand their activities and vested interests in multiplying their profits albeit unjustly, undemocratically and often unlawfully. Every rich and 'street smart person' tries to jump into the bandwagon of  'development' gang and corners some share of the booty. Those who can't in the name of ethics & morals, will get lost in this siren world to lead ignominious life. Excepting escaping from extreme poverty by masses, there is no justification for destruction of ecological assets and deterioration of social life in the name of 'development' and 'capitalism'. China's development if loaded with the factors of ecological destruction and erosion of human values, it would be negative. Finite world doesn't have enough resources to support ever increasing population without erosion and degradation. 

Democracy and its Perils

• Democracy is a political system which combines the elements of fairness, legitimacy and effectiveness. It is the least worst system. 
• Democracy is imperfect and, when misapplied or incorrectly interpreted, can be saddled with flaws and weaknesses. 
• Democracy is the most expensive & inefficient form of governance.
• A democracy is not a democracy unless it has independent and strong institutions that help facilitate good governance and right thinking citizens demanding accountability and transparency.
• Proper democracy is far more than a perpetual ballot process. It must include deliberation, mature independent institutions and checks and balances. It may include educated citizens, strong civil society and strong laws.
• Freedom is an essential part of democracy. Freedom is essential for both the ruled and the ruler.
• Unfettered freedom brings with it its own hazards that would undermine the institutions that help sustain democracy.
• The victim of democracy is the politics itself. Politics in a democratic set up tends to be looked upon with contempt by the people. It is much maligned and abused field in all the democracies.
• Politicians once elected to power become the custodians and abusers of power.
• Bad politics leads to corruption. As the people responsible for corruption are ‘enabled’ to loot the exchequer either by the loopholes in the laws or indifferent ‘people’ who form the very basis of democracy.
• Corruption has reached gargantuan proportions, because of the indifferent attitude of the people and enabling environment provided by democracy for the corrupt to practice their art. 
• Democracy aides both the individual and the ‘corrupt’ authority. Democracy with weak institutions gives them free hand to run the government, they tend to err, and err with impunity.
• Criminalization of politics is the biggest peril of democracy. With it comes misuse of position and authority. It inevitably leads to corruption.
• Corruption directly brings underdevelopment and spawns poverty. In India poverty is the major benefactor for the politicians. As long as poverty is sustained, they can amass wealth – always unaccounted.
• Democracy promotes capitalism which in turn results in uneven wealth distribution. Rich becomes much richer while poor remain poorer.
• Risk of capitalism is usually socialized while profits gets privatized.
• Democracy in itself is not a threat, but any weak link within it is bound to weaken the whole structure.
• Democracy has become synonymous with elections and is reduced to the process of elections.
• In democracy poor people vote, and the elected become rich at the cost of the poor. It’s a government of the rich, for the poor to sustain the poverty. This sounds cynical, but hard facts vindicate the statement. If 70% of India’s population still earns less than Rs 50 per day, even after 70 years of independence, should we compliment ourselves or introspect?
• Development has suffered more in democracy than in other forms of governments. Though it is fashionable to say that democracy is better than despotism despite lack of development, does it do justice to the vast millions who go to sleep hungry?
• Within democracy, we need a change of mindset both of the people and politicians in their attitude towards development. We are witnessing the loot of our resources by the powerful few who are covertly supported by the government machinery. Every penny that’s put to improve the lot of this country is unaccounted for. The crux is lack of accountability.
• Education of the masses and strong institutions is a solution to most problems in India.
• Institutions which are not pestered and interfered by the ruling classes perform better. The fear that these institutions if given complete autonomy would grow as a threat is unfounded. The Supreme Court of India and Election commission of India are governed by bureaucrats, not by the elected politicians. These institutions function well within the scope of our constitution.
• Our military has gained reputation for being fair to its people and the constitution. Where there is no interference by the politics, the institutions serve well. For a democracy to thrive and bring development to the masses, we need independent institutions to act as check and balances on the government.
• We need universities which are not at the mercy of government; we need public service commissions not interfered in their functioning by the government; we need a strong Lokpal to punish the corrupt; strong local governments to bring development at the bottom; independent CBI and a police force which is pro-people; the list goes on.
• These changes are not difficult to bring on. It is the will which is missing, lest it affects the power of few to amass the wealth. Perils of democracy are the result of loopholes within it. To plug them, we need to fight. Of course, non-violently.
• A blanket endorsement of it as a convenient panacea will do more harm than good.
• There are very few nations on this Earth, which openly reject the notion of democracy. Most countries espouse it, or at least offer it lip service.
• Myth #1: The people can do no wrong.  The legitimacy of majority rule with no reservations or caveats raises the issue of sub-units within the voters viz territorial, cultural, ethnic or religious. What happens if the people change their minds? Democracy cannot be just if it is not just over time. Does a coalition automatically legitimize the action of individuals or groups or nations without regard to higher principles of morality or ethics? The doctrine of popular infallibility can be kept as a useful reference point but must not be abused or overextended.
• Myth # 2: Direct  democracy is always better than representative democracy. Given the volatility of public opinion, the complexity of social psychology and the possibility of inter generational conflicts, the representative democracy is often superior to direct democracy, with the representatives acting as buffer. Mistakes can then be attributed to representatives and not to the people. The conventional assumption is that the will of the people should always trump that of the elites. The principal arguments against leaving too many decisions to the direct appreciation of the masses can be summarized as follows: (1) Uninformed or insufficiently informed electorate (2) Influence of money and media (3) People changing their mind (4) Contradictory Referenda (5) Deleterious effect on public policy.
• Myth #3: Democracy trumps all other social goals. The backlash against Dumb Democracy is the realization that democratization, although a valid goal, is not the only desirable one that a Society can legitimately aspire to. The following compete for priority with democracy. (1) Peace (2) Justice (3) Liberty & Freedom (4) Security (5) Good governance (6) Escape from extreme poverty (7) Public Vs Private goods (8) Good health (9) Traditional values (10) Climate change and sustainable development. 
• Myth #4: Democratic countries will never go to war against each other. There is a frequent assumption that once a country becomes democratic it will renounce violence, avoid going to war especially against other democracies, and try to resolve outstanding problems by peaceful means. Experience shows that the relationship between democracy and war is actually very complex and far from straightforward. 
• Myth #5: National democracy automatically leads to global democracy. Will a world composed of democratic nation-states automatically mean that it will also be democratic? This question is as complex and there are no simple answers. The UN Security Council, with coercive powers, is composed of five permanent members with veto powers who appointed themselves to that position. The other non-permanent members are elected by the UN General Assembly, but do not have veto power. The elected President of United States has real authority over the whole world by virtue of the overwhelming military power, which it has used in Iraq and threatens to do so elsewhere. There is a serious democratic deficit where 2% of the world’s voting population manages to have a determining influence on the entire world.
• There is no formula of global democracy and every formula suffer from inefficiencies and conflict of goals. The attempted simple transition from national to global democracy without a lot of preparation and adaptation is therefore destined to fail unless treated with a more sophisticated analysis.
• Other than democracy, there are no other known political alternatives which will work in the long run.  There is no permanent security in tyrants and the checks and balances of democracy make it the only sustainable political system, which can claim both long-term efficiency and legitimacy. Democracy must prevail because of mounting global interdependence requiring team responses and collective decision-making. A leader has to motivate his troops and keep their confidence. No single individual holds absolute power anymore, and everyone has to report to some group or a parliament, all leaders are accountable to some committee of peers, which makes democracy sustainable, indispensable and inevitable. 
• The modalities of this accountability have to be modulated and perfected.
• The construction of a democratic state must be gradual and well planned. It can rarely be imposed by non-democratic means. Democracy by force of arms is self-defeating. 

 In framing a government which is to be administered by men over men, the great 
difficulty lies in this: you must first enable the government to control the governed; 
and in the next place oblige it to control itself ... James Madison

The Perils of Dumb Democracy


Ambedkar described constitution as a fundamental document stated that the purpose of a constitution is not merely to create the organs of the state but to limit their authority because if no limitation was imposed upon the authority of the organs, there will be complete tyranny and complete oppression. The legislature may be free to frame any law; the executive may be free to take any decision, and the Supreme Court may be free to give any interpretation of the law. It would result in utter chaos. Constitutional morality is not a natural sentiment. It has to be cultivated. We must realise that our people have yet to learn it. Democracy in India is only a top-dressing on an Indian soil which is essentially undemocratic. Demonetisation has negated the fundamental and constitutional rights of Indians. By forcing every Indian, and not just the black marketers and counterfeiters, to stand in queues to withdraw hard earned money, our elected government has insulted all. Citizens have been temporarily deprived of property by a single fiat, even though the constitution says this can only be done with the authority of law. Countless have died, been rendered jobless, hungry and homeless. Is this a democratic act? RBI has been reduced to cipher. Fiscal policy has become political and the finance ministry redundant. The parliament and the cabinet have been turned into a mere formality. Judiciary appears seriously weakened. It is not easy for the victims of police and investigative agencies to get any relief against wrongful detentions and prosecutions. But it is the concerted attack on institution after institution by the Modi government that raises serious concerns. Bhakti in religion may be a road to the salvation of the soul. But in politics, bhakti or hero-worship is a sure road to degradation and to eventual dictatorship. India has moved away from constitutional democracy to populist democracy. Ambedkar is losing. Modi is winning.