Money Games: Rise of the Rich, Fall of the NationBy Sanjay Sanghoee • May 14th, 2011 • Category: 24/7 Talk is Cheap - The Blog
The Rich and the Rest of the Country
A recent article in the New York Times talked about the stark disparity between the rich and the rest of India and the efforts of the wealthy to insulate themselves from the unpleasant realities of their motherland. As I read the thoughtful piece, it reminded me of the parallel between what’s going on in India today and what we are witnessing right here in the U.S. – a rapidly widening gap between the have and have-nots and a division into distinct “classes”, although in this case driven by economics and not race or culture.
However, my post is not about the class system but about something that is the inevitable byproduct of segregation. As society moves further apart, so do the interests of the various groups that are a part of it, leading eventually to a lack of cohesion and unity.
More specifically, the Republican agenda of slashing the federal budget to a level that would hamper the growth and stability of the U.S. as a nation while refusing to tax the rich or corporations is not only alarming but a recipe for disaster. For sure, cutting the budget deficit is important, but the extreme measures advocated by the GOP will destroy the infrastructure and future of our country while securing the future of a select few who can afford to insulate themselves from reality. Unfortunately, I believe that this trend is irreversible in the short term and will bring the U.S. to the brink of catastrophe before sensible minds prevail and rein in the fundamentalism of the conservatives.
Is India likely to go the same route? Quite possibly. While there is plenty of new investment flooding into India and the market is expanding, investment in infrastructure, education, clean energy and other long-term projects requires a different mindset from that of capitalism. It requires a long-term view of history and a sense of dedication to the welfare of all people, not just a powerful minority.
Again, as in America, the more divided people get on the basis of money, the less they share this essential “communal” value. There is no doubt that the Ambanis, Tatas and other financial empires will thrive in the future and that their expansion will fuel job growth and economic prosperity for others, but such prosperity is meaningless if the very foundation on which it stands is allowed to crumble.
Of course, pointing out a problem without suggesting a solution is meaningless so here is a possible way to buck this trend, at least for India. An old and mature culture should be able to modify its system to reflect the needs of both a rapidly growing capitalist economy and the larger welfare of the country, which encompasses all its citizens, including the disenfranchised and poor. The former needs to be addressed through financial reforms and curbing of government corruption – two things which are now thankfully being tackled by the Supreme Court.
As for the latter, developing a large and populous country like India and preparing it for a successful future requires tremendous resources – the type of resources that charitable contributions or economic initiatives of the private sector alone can’t provide. Roads, railways, schools, public services, scientific research and everything else that goes into nation-building all need financing from government coffers, which can only be filled through taxation. We may not like that idea, but that’s how it goes.
Additionally (in another parallel to the U.S.) , since a disproportionately large amount of the wealth in India is concentrated in very few hands, those hands need to be willing to sacrifice a bit more than the rest of the people in order to help their country.
The alternative is a future wasteland of poverty, illiteracy, inequity and misery, broken occasionally by the gated estate of a wealthy businessman but little else – which is a vision I find hard to believe would be palatable to even the staunchest capitalists in our society.
Sanjay Sanghoee, author of ‘Merger’, a corporate thriller available on Amazon, blogs on political, financial and social topics which are carried weekly by several radio stations. He has written spec episodes for TV shows like ‘Law & Order: SVU’ and a screenplay for ‘Merger’. He has an MBA from Columbia Business School and worked on Wall Street for 15 years in investment banking and hedge funds. www.sanghoee.com