Since the Congress party released its election manifesto on April 5, the word ‘redistribution’ has dominated the election discourse. Prime Minister Narendra Modi alleges that the Congress’ manifesto promises to ‘redistribute’ wealth by taking away people’s gold, mangalsutras, imposing new taxes and giving it to poor minorities. Except, there is no mention of ‘redistribution’, ‘mangalsutras’ or, ‘wealth tax’ in the 48 pages of the manifesto. The election in the world’s largest democracy is now a contest over missing words.
Nevertheless, this has triggered a furious public debate over India’s inequality and the idea of redistribution to bridge the gap between the haves and the have-nots. It is simply incontestable that the economic disparity between the rich and the poor has widened alarmingly over the last two decades, not just in India but across the world. It is puerile to politicise this serious issue by quibbling over which political party’s tenure has exacerbated economic inequality. The fact is that the world is becoming more and more unequal and it is not in the larger interest of any society to let this fester. The real argument is over how one should bridge this gap and aspire for a more equal and just society.
The gap between the rich and the poor can be bridged by either making the rich poorer or the poor richer or both. Does one believe that the size of the overall economic pie is either fixed or will not grow fast enough for the rich to keep their share and the poor to get a greater share? If the answer is yes, then the thinking to achieve a more equal society is shaped by what sociologists call a ‘Pareto Optimum’, under which it is impossible to make one person better off without making another worse off. Developed nations, that can only grow slowly, are forced to adopt a ‘Pareto’ path to reducing inequality. But developing nations that can grow much faster need not. This is the fundamental philosophical difference across the ideological spectrum to solving inequality.
