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Can Capitalism bring in Inclusive Growth?

Writer and Editor Arundhati Roy in her book the “Capitalism: A Ghost Story” has an interesting description about the 27-storey home on Altamont Road – Antilla the Hun.

“Is it a house or a home? A temple to the new India, or a warehouse for its ghosts?”

 

Apparently, Antilla belongs to India’s richest man, Mukesh Ambani. It is basically a 27 storey building. The other “special features” it has – three helipads, nine lifts, hanging gardens, ballrooms, weather rooms, gymnasiums, six floors of parking, and the six hundred servants. The worst part? Inspite of all this “lavishing” features, it has no one staying in. All the efforts, the profits wasted by the Reliance enterprises on building a “to-be-abandoned” later home is apparently a waste. The irony is the state government doesn’t have enough funds to make sure those living on the streets can have a one-room construction to escape the scorching heat or the highly intense rainfalls in Mumbai. So, has what had been “promised” in silent words been done? Has the adoption of the free-market regime post liberalization in India worked? Has inclusive growth been brought about by the Capitalists taking over?

 

t For understanding this, let’s first understand what “Capitalism” and “Inclusive Growth”actually is. In its simplest form, capitalism can be described as the avocation of wealth.  Wealth may be materialistic or monetary.  In both cases, the capitalists work towards acquiring “more than is needed to survive”. The three components – Labor, Capital and Consumer. While if any one of the three don’t have an existence – Capitalism isn’t a success. So what is “inclusive growth” ?  The idea of this is not only “employment” generation instead of “income distribution” but a more “holistic” growth of the lower strata – the deprived strata – the Labor class. Holistic here means education, employment, health, better economic and social status and a better environment to live in.

Taking the Indian context – Since the inception of economic reforms, the GOI has always talked about how they have been putting efforts towards protecting the interest of the deprived strata. There was a paradigm shift from the “socialist” ideology to that of a mixed economy (private and public ownership). The wordings being taken up have changed from  “Towards Faster and More Inclusive Growth” (11th five-year-plan FYP) to “Faster, More Inclusive and Sustainable Growth (12th FYP). The general perception has been a shift towards what we call “aam aadami” (Common people).

capitalism1

But according to some economists, India- even though a mixed economy- is being run mostly by the capitalists. The reason behind this large chunk of population deprived of job opportunities, food,health care, education, and most of all – free and safe air is because of the large number of tax evasions and certain malpractices being followed to attain clearances . The tax evasions being mostly done by the elite class – the capitalist class. Corruption is seemingly hard-wired into the Indian social,economic and political system.

The seemingly increased parallel economy is actually a reality. It leaves the government revenue deficit, thus forcing them to cut down on social welfare policies. The result? Poor getting weaker and poorer. They have been denied this “inclusive growth”, the deserved right to grow and survive, the way elites grew – not by choice.

Sometimes the capitalists abuse their freedom and the workers helplessness, pay them less than what they should be given(more labors in market and less work). Unsafe conditions to work, less pay and breaking the trade unions through dirty tricks increases this class divide – and thus less inclusive growth.

Big capitalists own bigger enterprises- push out the jobs being done by smaller houses(like making auto parts-mostly done by Small business blocs) thus forcing them to shut down there enterprise. But what about all the job that was lost? They are forced to migrate – deprived inclusive growth.

The ability to be financially stable- Yes it is there- but a few dominate the others. The working class is always subordinate to the capitalist class. So, what should have been divided between everyone equally – is divided depending upon status and class. A major chunk in a capitalist society is poor, some form the middle class and the others occupy the rich strata. This “capitalism” is not only bringing in a class disparity- but also bringing a moral disparity. Shouldn’t all (being humans) be equals? It isn’t fully the case with Capitalism. It makes sure there always is a population who works for them for a low wage – depriving them of social status- increasing disparity and demolishing the concept of inclusive growth.

Most of the industries owned by these capitalists show little or no empathy towards the environment. Result? Loads of effluents being released without treatment into the water, harmful gases being emitted and acid rains following. Soil, air and water – every bit of it is being polluted by them. How is it connected to inclusive growth? Rich can afford treatment from asthma- not the poor. Thus,how can we say has it contributed to inclusive growth?

Big industrialists take away the lands of the poor for building industries. They are guaranteed jobs, schools and healthcare facilities for the same. But after completing their motive, they hardly look back towards the poor. And when they start Naxalist movements (Bihar and Chattisgarh, plights of the SC’s) they are blamed to be local terrorists. Was it all their fault? Wouldn’t it be a completely different picture if proper steps for inclusive growth was taken in first place?

But is the whole story ending with the conclusion that inclusive growth is NOT possible with a Capitalist society. This may not be the complete truth. The idea that always pops up in the mind while thinking of the poor is that they are getting poorer. Apparently,what empirical evidence shows is rich are getting richer, and so are the poor.

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Capitalists mindset has led to the evolution of a completely different set of people. They are those who believe in being the change. A lot of the entrepreneurs have risen in the past decade, who have not only increased the number of job opportunities for people with skill, but also increased the number earning opportunities in an indirect way.

Construction labors, carpenters, tea-stalls, food corners, dabba-wallas- Thanks to the ever rising capitalists mentality, they have benefited. This not only makes sure they are earning, it also makes sure that they are no longer denied social parity, no longer have they got to be clutched in the web of misery, no longer are they poor. The idea is being enthusiastic enough to do what can be done the best by you. You have the trigger already at your finger tips, you need to just push it. Just because you don’t have capital given by a venture capitalists to start your own firm, it doesn’t mean you have to die without food and fuel.

The same scenario has been found in the most developed nations today. Not only are the skilled benefiting, even the unskilled are.

But the question arises is- how is there such a disparity between the poor in India and that in USA? The answer to this is – the capitalists society isn’t an end in itself. The government has to do its part too. How can this be done? Taxing the rich, sharing it with the poor. Giving back to the poor- what should be given to them morally. This is the socialist principle – taking from the rich, giving it to the poor.

In India, steps taken thus are highly commendable. National Rural Heath Mission for health facilities to the poor, National Food Security Act for food security and MGNREGA for providing job opportunity has had it’s impacts in providing the inclusive growth needed. But the government lacks funds. There is a strong interconnection between taking from the capitalists(taxes) and giving it back through welfare policies (socialist ideology and inclusive growth.) Dalit capitalism is on the rise too.

So it shouldn’t merely be the capitalists who should be responsible for inclusive growth. The government has to play it’s role too. There needs to be an amalgam of the two, a definite demarcation of both, and a need of striking the right cord in between. Government needs to plunge the gaps (structural and administrative), make sure education is provided to poor at minimal cost, they have better health facilities, and have the proper skill to uplift them as well from the clutches of poverty and rise as a middle class. As a capitalists, the responsibility should be being ethical, honest and having integrity. Paying taxes, following the procedure to attain clearances, philanthropic activities, helping NGO’s and not paying bribes can be the bits.

 

 

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Philosophy Tuber

  • Hi Serious!
    After going through your outline, your essay appeared more clear. Intro was quite good and so was the conclusion. The only parts which I found difficult to relate with were these-
    – Finding links between the two (capitalism and inclusive development)
    – Showing how capitalism has been infallible in bringing a holistic inclusive growth – keeping in mind the different parameters of inclusive growth.
    Rest was as always perfect, with clear structure and flow. 🙂
    All the best.

    • Okay Isha. Let me tell u this, u may find this useful :

      U need understand this = Inclusive growth = better education, health, employment, economic condition, social status, and better environment.

      – Finding links between the two (capitalism and inclusive development) + – Finding links between the two (capitalism and inclusive development)
      – Showing how capitalism has been infallible in bringing a holistic inclusive growth – keeping in mind the different parameters of inclusive growth.

      It is as follows.

      Capitalism = Corruption = Govt. left with less money for welfare policy = No inclusive growth (4th and 5th PARA)

      Capitalism => Less pay to labors + no incentives + Unsafe conditions => Lack of inclusive growth.

      Big capitalists => Take up works done by small enterprises => Force them to close the enterprise => lead to loss of jobs of people working in the small enterprises => Lack of inclusive growth.

      Capitalism => Paritally divided money (based on class and status) => Nothing for the poor => Class divide => Deprieved social, economic status => Lack of inclusive growth.

      Industrialists => Take away land of the poor+ Guarantee jobs => NO JOBS given => Lack of employment => Naxali => No inclusive growth (both naxalis and of nation)

      Hope am clear 🙂

      • Thanks for the detailed explanation Serious 🙂
        Now I am able to see what you have actually written and like every time- It is indeed a brilliant piece of write up. Keep writing!

      • Shivam Sharma

        Give me your EMail ID. I will send you mine, then we can discuss the content for this essay. Because, this topic can be asked in Mains.

  • Hi Joker, my views:
    1)Intro was quite unique and well crafted
    2)I felt that at some places you were trying to enforce the idea of ‘inclusive growth’, you every para ending with the phrase “inclusive growth”. Though it can be said that you were making efforts to stick to the topic but still I found it repetitive
    3)Through you conclusion and preceding paras, you have shown inclination towards capitalism as driver of inclusive growth. However, in the para “Construction labors, carpenters/…”, I don’t see much enforcement of idea of inclusive growth like you have done in your “against” arguments
    4)I liked the way how you handled the “India” part. In forum, people have tried to separately address it but you have handled the India and global perspective together. Keep it up!
    5)Somewhere I feel that in the effort to cover many dimensions, you miss out the connectivity. Though that is something obvious but still take care of that
    6)Conclusion was good. Even I had written on the same line. Kudos!
    Overall, a very good write up 🙂

    • what an analysis. Thanks for this elaborate response. I emphasized on those words coz you I believe inclusive growth can be perceived differently by someone. Thoda forced effort lag raha I agree though 😀

      Thanks again man!

  • Hi Nitish, this is Jyotsna
    your writing is wonderful yaar ! i started practicing essays from this year onwards and after reading yours i am am only amazed . can you please share some tips to help improve essay writing. insights pe what i mostly get is flow missing, kahin kain pe connectivity lag etc. i am working on those areas and trying to get better. what is the right way to approach essays according to you ?

    • Hey Jyotsana 🙂

      Thank you for being generous with your words. For getting the flow, I will ask you to read polity books from class 9th. The way they continue with the story is something to learn from.

      Further, I would suggest u to form a structure before writing an essay. U use headings while writing. i have nothing against the usage of the headings. It infact gives a better structure. But what I believe is a better flow is imperative in a good write up… the curiosity should be maintained. Come out of that comfort zone, leave the headings and pick up the most apt words for connecting between the paras.

      Another way to maintain the flow is a story, which can be linked from the start till the end. This shows that u have an ability to connect things well.

      Again, another thing that can be done is analysis and formation of links within the keywords of the topic. For example : When u have to write on “capitalism” and “inclusive growth” then make sure yu form links between these two terms like “how has capitalism resulted in inclusive growth”, “how was it infallible” , “how was it successful” “were the other models not successful” “should capitalism be the only one responsible for inclusive growth” and then the penultimate para should be filled with solutions (obviously in context ones)

      The conclusion para must include a line from each para of the passage. Also, if u have used an example/a story in the body/intro : Form a connection and link the story/example with the conclusion. DON’T use a different dimension in the conclusion, that may cost u marks.

      Keep reading and writing. the more u practice, the more u move closer to perfection (Perfection is never reached though) The only way ur essay can be successful is if it has a layman language, a unique idea in each para, interlinking, connections, analysis of the topics and certain “self-made” theories which can be used. Refrain from quoting thinkers, it’s their perception and not urs.

      Finally, use quotes only if u have nothing. using quotes in the end is very mainstream and used by 75% of the people writing them. What makes u stand in the rest 25% is ur uniqueness, analysis and simplicity with the words.

      I sincerely hope u find this helpful! thank u 🙂

      • thank you so much friend. will keep all your suggestions in mind while writing essay tomorrow 🙂
        you are totally right about the polity NCERTs , a lot to learn from their story presentations !
        Thanks again 🙂