This week, we had author and former Chief Economic Advisor of the Government of India, Arvind Subramanian have a riveting discussion with French economist Thomas Piketty, author of Capital and Ideology and many other bestselling books. Watch their conversation here:
Following are some of the key takeaways from their discussion –
- Inequality has been a constant theme in history. It has persisted and survived wars and revolutions. But, a large scale reduction of inequality is in the long run in many countries. There is a long run movement towards a more equal society and towards a more equity based economic system, which would then lead to prosperity. However, this is not a linear process.
- The response of most Western democracies to the covid-19 pandemic has not been great. The Western democracies have not done as well as the North-East Asian kind of semi-democracies.
- Not only in the U S but also in all European and Western democracies, the democratic and social democratic parties, which in the 50s-60s were able to form a coalition of relatively socially disadvantaged voters, have lost support. In particular, if one looks at the political cleavage by level of education, it used to be the case that less educated voters would vote for the Democratic Party in the U S and Social Democratic Parties in Europe. But from the 70s, 80s and 90s, one can see a very gradual, long-run process leading to the situation we have today where 80% of the most educated people, with a PhD, voted for Donald Trump. This is a sort of extreme point of evolution, it is a moment in continuation. This has little to do with Trump itself or Trump’s administration. This is an extreme situation. But it is a situation that is being seen in many countries across the board. It is not something that is peculiar to the United States itself.
- The source of economic prosperity in the long run comes from equality and in particular equality in education. An egalitarian educational system is key.
- The view that prosperity always requires more inequality could be true at a purely theoretical level, but it doesn’t work at all. The lessons from history say that what has brought about the bigger pie, and what has brought economic prosperity is, in fact, more equality. And the 20th century has seen a huge reduction in inequality.
- Piketty believes that the reservation system in India has had a part, a rather tiny part, in narrowing the gap in education, public sector jobs, etc. He thinks that reservation can be a part of the solution, but it is not enough. In many cases, reservation has also served as an excuse sometimes for the Indian elite. For example, payments of necessary investments in basic educational services, basic health services. And given the population of India, one is not going to substantially improve the situation of the lower caste population or the population in general by increasing seats in a university or public sector jobs because there are so few of them that the number is not going to be relevant.
- Arvind doesn’t think that the reservation system has been a great success either. Caste itself is the real impediment to the spread of education because it is a way for the elites to keep their control. It is a pretty strong barrier to overcome. The upper caste elites have wanted to preserve caste-based inequality because that’s how they preserve their power. One needs a lot to overcome the stranglehold of the elite upper-castes on the spread of education. Historically, it is a big part of the control that they have exercised.
- Due to various historical processes, every country has had its own trajectory. There is a lot to learn from India in general, and India itself has a lot to learn from the rest of the world.
- Mobilization, in particular social and political mobilization, can bring around positive changes much faster. Then, as a result, the dominant discourse of the elites about the naturalness of the inequalities, will be changed without major destruction to societies.
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