(General Studies IV – Theory Section – Ethical Concerns and Dilemmas in Government and Private Institutions; Laws, Rules, Regulations and Conscience as Sources of Ethical Guidance.)
- The recent ostentatious display of wealth by a billionaire during a family wedding has highlighted a pervasive issue of the vast and growing inequality between the rich and the poor.
- This disparity is not only economic but also social, creating a chasm between different classes that is often exacerbated by the conspicuous consumption of the wealthy.
The Rising Income and Wealth Inequality in India –
- A study by economists Nitin Kumar Bharti, Lucas Chancel, Thomas Piketty, and Anmol Somanchi titled “Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj” provides a stark view of the current situation.
- In 2022-23, the top 1% of Indians controlled 22.6% of the income and 40.1% of the wealth.
- The wealthiest 10,000 individuals in India own an average of ₹22.6 billion each, an amount 16,763 times the national average.
- This concentration of wealth is also skewed along caste lines, with nearly 90% of billionaire wealth held by upper castes, while Other Backward Classes and Scheduled Castes hold less than 10% and 2.6%, respectively. Scheduled Tribes have no representation among the wealthiest Indians.
The Ethics of Extravagance –
- Thorstein Veblen, an American economist, argued that conspicuous consumption is a means for the affluent to signal their status and superiority.
- The scale of their extravagance is often so large that it becomes impossible for others to emulate, thereby reinforcing their social standing.
- Harvard professor Michael J. Sandel’s political philosophy delves into the mindset that justifies such wasteful expenditure critiques the entitlement mentality of the rich, who believe their wealth is a result of their superior talents and hard work.
- This belief allows them to disregard the role of fortunate circumstances in their success and to see the poor as deserving of their fate due to their lack of merit.
- Sandel draws on John Rawls’s and Friedrich Hayek’s arguments to show that the wealthy owe their success to societal factors and are thus obligated to contribute to the common good.
Societal Impacts and Solutions –
- The NITI Aayog reported that 135 million Indians escaped multidimensional poverty between 2016 and 2021.
- However, the report titled “The State of Food Security and Nutrition in the World” highlighted that in 2022, 56.5% of Indians could not afford a healthy diet.
- This statistic underscores the stark reality of poverty in India, contrasting sharply with the lavish expenditures of the wealthy.
Idea of Trusteeship –
- To address this issue, societal and policy changes are necessary. The Koran’s doctrine of trusteeship, which posits that wealth is God-given and should be used for the benefit of all, provides a moral framework for the redistribution of wealth.
- Similar ethical principle of trusteeship was used by Mahatma Gandhi in various issues to avoid schisms between communities during freedom struggle.
- Trusteeship provides a way of changing the present capitalist order of society into an egalitarian one. It does not give importance to capitalism, but gives the present owner class a chance to reform itself.
- It is based on the faith that human nature is never beyond redemption. It does not recognise any right of private ownership of property except so far as it may be permitted by society for its own welfare.
Policy Recommendations –
- Progressive Taxation: Implementing higher taxes on the ultra-wealthy can help redistribute wealth and fund social welfare programs.
- Corporate Social Responsibility (CSR): Encourage or mandate that corporations increase their CSR contributions, ensuring that more funds are directed towards social welfare.
- Social Programs: Invest in programs that provide education, healthcare, and nutrition to the poor, thereby reducing inequality.
- Public Awareness: Increase awareness about the negative impacts of wealth concentration and the importance of social responsibility among the wealthy.
Societal Recommendations –
- Cultural Change: Promote values that emphasize modesty and social responsibility over conspicuous consumption.
- Community Support: Strengthen community support systems to ensure that the needs of the poor are met and that they have opportunities for upward mobility.
- Ethical Consumption: Encourage the wealthy to adopt ethical consumption practices and to use their resources to benefit society as a whole.
In conclusion, the extravagance of the rich not only exacerbates economic inequality but also perpetuates social divisions. By adopting policies that promote wealth redistribution and fostering a culture of social responsibility, society can move towards greater equality and justice. The wealthy must recognize their role as trustees of their wealth and use it to improve the lives of the less fortunate, thereby contributing to a more equitable and cohesive society.