Okay, before you suspect me of defending the indefensible and close this tab, let me answer the question I’ve posed in the headline: NO!
The whole debate about inequality got into my head after a friend sent me a cartoon strip early this week, apparently published in the US media. I did a little bit of research about the cartoon strip and found out that it was from a comic series called “Pearls Before Swine” drawn by Stephan Pastis.
The comic basically addresses political polarisation in the US — but from the angle of income/wealth inequality. “In 1990,” one of the characters says, “there were 60 billionaires in the US… Today, there are 664. Together, those 664 people have more money than the bottom 165,000,000 Americans combined.”
Coincidentally, around the same time that my friend sent me this comic, there was a renewed debate on social media over inequality. Apparently, Oxfam had released a new report called “Inequality Kills” and the report gave several shocking numbers. “The world’s ten richest men more than doubled their fortunes … during the first two years of [the] pandemic,” Oxfam said. Meanwhile, 99 percent of humanity lost some income during that period, while over 160 million people fell back into poverty.
Shortly afterwards, at least one Indian millionaire went on a philosophical rant, cautioning people against envying the rich, because Oxfam had advocated taxing the wealthy (admittedly, at an extraordinary rate). India, by the way, came out looking especially ridiculous in the report: the top 10 percent in India hold 57 percent of the wealth. More than a mere handful of the others, I presume, are newly minted engineering graduates, fighting to be clerks in the Indian Railways.
But I’m going to put to you that the root problem is not “inequality” per se but the lack of “social mobility” (or, as I would put it, the lack of hope).
I’ve spent some time in the Middle East, hobnobbing with highly paid management consultants who earn New York salaries but pay no tax. Believe it or not, I think that most management consultants in Dubai are actually underpaid, in a sense. In one of the firms, a junior consultant is billed to the client at $2500 a day. For a 5-day working week, that translates to $12,500, which amounts to at least $500,000 a year — assuming that business takes place for 40 weeks in the year. The junior consultant, however, only makes a fifth of that.
But it turns out that management consulting is not really quite as bad as other industries: In the 1950s, a typical CEO made 20 times the salary of the average worker. Today, the CEO makes over 360 times the average worker.
Yet, nobody who toils on Wall Street for $100,000 is really going on strike over income inequality. Because, truth be told, for one, they actually do have plenty. But perhaps more importantly, they expect “social mobility” — they expect promotions, progress and a better tomorrow (at least in terms of wealth if not job satisfaction).
The poor and destitute, on the other hand, have little hope of any of that. They expect to live and die exactly as they are today, because there are no “job promotions” at the lowest levels of the economy.
The most sinister thing about inequality is that, without some sort of government intervention, it simply repeats itself from generation to generation. A child born to a farmer or a factory worker will hardly have access to the same opportunities as a child born to a Wall Street trader.
The argument here isn’t for “redistribution” in the form of taking $1 million away from the CEO and giving it to the cab driver outside his office. It is for using the $1 million to provide quality education and healthcare for the poor, so that the cab driver’s kids can someday compete for the same jobs as the CEO’s kids.
But I’m not going to say that the solution is as simple as a “wealth tax”. The problem with taxes is that there is an intermediary: the government. The government takes $1 million from the CEO and you simply have to trust that it will use that money to uplift the cab driver’s kids. But in most countries (yes, at least over half of all countries), the government frankly cannot be trusted to do that job — either because it lacks the capabilities and competence, or because it lacks the will.
The key to cracking the inequality puzzle lies in solving that conundrum. Asking for taxes on the rich is easy; but if you really want a fairer and more equal economy, you have to find ways to make government more accountable and effective — or find other, more trustworthy intermediaries to do its job. Like Oxfam, perhaps?
To open or not to open?
That is the question that countries are now asking, as they try to figure out whether the pandemic is finally over. During the second half of last month, the world was recording several times more cases of COVID-19 than it has done any time before: over 4 million a day, as opposed to under 1 million in April last year when Delta was ripping India apart. But curiously, the number of deaths stayed pretty flat and didn’t quite hit the morbid heights recorded in the previous waves.
But how much of that good news was really thanks to Omicron? Some scientists reckon that Omicron isn’t exactly all that much milder than Delta; it just seems to kill far fewer people because several more are now vaccinated or have immunity from past infections.
So far, this looks like good news for most countries that have already been ravaged by the pandemic or have achieved a reasonable spread of vaccination (although — and this is how the pandemic has turned us into hopeless pessimists — you can never really be sure that you’re out of the woods). Britain has pretty much abandoned every COVID-19 restriction after it turned out that Boris Johnson was already partying while everyone else was locked up. Australia is starting to follow suit. Even New Zealand is now beginning to let outsiders come in.
But for countries that had decided to lock down and isolate themselves from the world early on, the virus is still creating nervous times. The most amusing of those cases is Kiribati — a Pacific island country so far removed from the rest of the world that it had people living on either side of the International Date Line until 1997.
For two years, Kiribati managed to keep itself COVID-free. Then, this January, it decided to open up. A charter plane was hired to bring home 54 of Kiribati’s own citizens. Each passenger was required to be vaccinated, tested three times before boarding the plane, and then put in quarantine upon arriving. And yet, somehow, 36 of them ended up testing positive after they were released, and by the first of Feb, the country had 169 cases a day — and counting.
At the other end of the spectrum is China — another country that is somehow maintaining (at least in the eyes of its officials) a “zero-COVID” policy. All through the pandemic, China has tried to keep cases and deaths low by turning itself into a giant prison. But this week, the Winter Olympics will begin in Beijing, and Putin will become the first world leader in two years to meet Xi Jinping in person.
The challenge for China is that, given that relatively few of its people (at least according to official data) were exposed to the virus, most will not have the natural immunity that has been acquired by people elsewhere. And as it turns out, China’s vaccines are apparently not the most effective in the world either.
So, countries are now facing the same dilemma that they faced early in the pandemic — except that, in some sense, the logic is now reversing. Two years ago, when the virus first became a thing, conventional wisdom held that countries should lock themselves down to contain the virus. Now, the lack of natural immunity is putting some countries under threat of a potentially higher death rate, and a supposedly milder variant is tempting them to take the chance to reopen. Once again, there seems to be no clear right answer.
But what do you think?
Should countries reopen already? Is it still too early to reopen? Send me your thoughts and comments on these problems — and, of course, your feedback on this blog.
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