A lot of talks are going on about the World Inequality Report 2022. In the mean time from today the US is organizing and hosting first Summit for Democracy. Interestingly although the said report has no connection with the summit and when we go for doing some analysis of inequality on one hand and of democracy on the other hand we find that at the end we arrive at the point where we find inequality in terms of economics is nothing but an authoritarian way of distribution of economic resources and this is the concentration of inequality of economic endowments and resources against the masses which promotes authoritarianism against the democracy.
Democracy is not only a political system. That is just a myopic solution to see democracy as a pure political system as envisaged by Margret Thatcher and Ronald Reagan during 1980s. They and after them most of the world leaders failed to understand that if concentration of political power within a few hands was allowed to continue to grow this would only enable small groups of the rich or super rich to dominate and to capture political power by using vast resources which would help in subordinating masses to the might of money and political power. This happened and the seats of power all over the world started being slipped into the laps of crony capitalists.
On the other hand social dimension of economic inequality was never considered extensively. Societal value system was hurrriedly replaced to provide room for authoritarianism. World wide prevalence of patriarchy has been responsible in the long run in strengthening the tendency of inequality .We can enumerate the lists of the causes which explain the role of and also impact of inequality . In nut shell we can safely say that economic inequality gets its life from political authoritarianism which is opposite to democracy but paradoxically is present in many so called democracies. Even this word of democracy is extensively used both by politicians and capital owners just to regularize their monopoly over political and economic resources and this monopoly over economic and political resources enables small groups of oligarchs -Crony capitalists to capture the social structure of the country or the society. Hence with increase of inequality in economic and political terms the social capital becomes concentrated in the hands of oligarchs -Crony capitalists and they consciously promote the value system in the society which is conducive for their growth. This is the reason behind strong social trends that support inequality , communalism and open and unhindered market system, meritocracy. All these trends go against the majority of population and keep them pouparized so that they for their basic needs continue to depend on the philanthropy and mercy of the system. Even the latest trend of limiting human capability with the help of technology originates from this philosophy of inequality. In fact growing inequality is not a failure of modern capitalism rather it's the strongest tool of modern capitalism which guarantees oligarchic rule in the sacred name of democracy.
On the other hand technology is marching ahead at very fast speed. Technology is changing from traditional to Artificial Intelligence. Automation and digitization of technology has caused shrinking of labour market resulting in decline of employment opportunities and consequently economic inequality has become sharp. Those who are at the top of the pyramid don't prefer to allow government expenditure on social sector. When democracy is dependent on capitalists leaders for their own sake are not in a position to outrightly brush their wishes aside. Elections in modern crony capitalist democracies have been being fought not by convincing people but by winning people by employing some ideology or by combination of money and muscle power or by combination of the two. In such a situation for voters more than inequality other questions are important for choosing their governments. This serves the purpose of crony capitalism to continue to keep hold on resources in the name of democracy. Modern democracies in name of free market economy and meritocracy have given up their one of the basic tasks of social welfarism. This has propelled inequality in the milieu of changing technology.
Besides failure in investment in social welfarism failure to maintain the level of knowledge required for meeting technological.advancement is another reason for rising inequality. Today in the era of AI driven technology skill is the new capital which is if neglected population of working age is not able to earn sufficient. This on the one hand makes majority of working people vulnerable and on the other hand keeps the owners in advantageous position . This generates a huge "useless class" as Yuval Noah Harari calls. As thhis turns majority of the population week in bargaining democracy suffers as the "useless class" is efficiently used by politicians as plebeians to consolidate their power by engaging them in vigilantism . In this way though democracy still exists as a system of governance but it exists without the independent choice of the people . It is run by oligarchs for furtherance of their own interests.
Then what are the way outs? For reducing inequality we need certain governmental interferences urgently.
First the governments will have to increase investments in health, skill development and social welfarism sectors. Second, certain institutional changes have to be introduced to make wage distribution more pragmatic, opportunities for modern education and skill developments more accessible. Infrastructure must be developed throughout the country. These are pre market interferences. Similarly post market interferences in form of tax reforms . Similarly industrial and agricultural policies must be framed in such a way that more and more people can have access with beneficial returns. At microlevels we need moret localized interferences. A country of the size of India there are many areas which are economically untapped. We need to harness their capabilities. Green energy is another area where much needs to be done. So inequality is more an issue of public policy. Governments will have to come out of the graveyards of politics to do their job of policy formulation and execution. Unless this is done democracy is bound to suffer as if inequality is not lessened by conscious interferences crony capitalism will continue to dominate eroding the base of democracy.