Thursday, 11 December 2014

Ameliorate or leverage?

by Haris Gazdar

Photo Credit: Fatima Zaidi

‘Poverty, Inequality and Economic Growth’ was the title of this year’s annual general meeting of the Pakistan Society of Development Economist (PSDE) – the largest professional association of economists in the country – held in the national capital in early December.  Inequality, as distinct from poverty, has occupied many minds of late. The financial and economic crises of 2008 and 2009 swung opinion against fat cat bosses who were seen to have been further enriched as the middle classes were impoverished.  The work of Thomas Picketty, the French economist whose analysis of wealth and income distribution trends, added academic gravitas to popular discontent with the plutocrats, was frequently mentioned at the PSDE meeting.  Not to be left behind, the World Bank came up with its own South Asia report on inequality, which actually showed that at least in terms of consumption expenditure the region was among the least unequal.

 There were many well-informed and thought-provoking presentations and discussions on inequality – not least in a session entitled ‘The Political Economy of Inequality’ where Dr Nadeem-ul-Haq skillfully drew out diverse opinions from across a wide spectrum.  The thoughtful and precise formulations of Ali Cheema, and a historical perspective offered by Imran Ali, provided a backdrop to a debate on merits, rights, and opportunities between Shahid Kardar, Asim Sajjad Akhtar and Karamat Ali. While Nadeem-ul-Haq framed the debate in terms of a tension between economic growth and equality – something which was to be echoed later in the World Bank report launch – Ali Cheema queried the empirical basis for such a contradiction.

Asim Sajjad Akhtar spoke of not one but multiple dimensions of inequality – including class, caste, ethnicity, and gender – which interacted to produce deprivation and alienation.  His view was close to the concept of ‘intersecting inequalities’ proposed by Naila Kabeer in submissions to the UNDP for addressing the reduction in inequality as a global policy goal.  Shahid Kardar thought that the economic system could deliver both growth and poverty reduction if only the anomalies and inequalities in the fiscal system – both taxes and subsidies – could be eliminated.  Karamat Ali took that view that the market economy left to its devices could neither deliver growth nor the reduction of poverty and inequality because markets were rigged against the marginalized.  The level playing field of the utopian free market could only be realized through concerted political and public action – something for which Ali Cheema has already cited historical evidence from other countries.  Imran Ali put on the historian’s cap and reminded everyone that economies can continue for long periods along paths of economic inequality and stagnation, but do get occasionally shaken from their torpor by violent upheavals.

Broad though the range of views was, it was interesting to note agreement on two things – one ethical and the other political.  All the panelists agreed that regional and ethnic inequalities in Pakistan presented serious challenges to state and society and needed to be addressed urgently.  They also subscribed to the ethical premise that there needed to be greater equality – and even those who saw equality as a block to economic growth sought ways of balancing the two.  For me, the consensus for a more equal society around the panel was easy to understand in the light of one of the great insights of ethics and economics due to Amartya Sen who observed that all ethical systems that have endured have been concerned about equality – the question is equality of what?  Very roughly speaking, while the right has wanted equality of opportunity, the left is thought to seek equality of outcomes.  Even bankrupt ethical systems which support highly exclusionary social arrangements – say Apartheid, caste hierarchy, and patriarchy – claim to uphold some form of within-group equality.  They simply define their group of interest in exclusionary ways.

If all ethical systems, like all of our panelists from divergent political positions, have equality as a central concern, then by corollary, conspicuous inequality in any social arrangement would call into question its legitimacy.  This is, indeed, what we observe.  Various dimensions of inequality can remain hidden from view until they are called out, and calling them out is the first act of mobilization against them.  It was when East Pakistani politicians and academics called out what they saw as unequal treatment on the part of West Pakistan that the political mobilization began.  It was when the Suffragettes called out political discrimination on the basis of sex, and Dalit leaders called out against untouchability that these inequalities became explicit, visible and political problems.

Moving on, if the perception of inequality is such a powerful mobiliser of groups, it is no longer manifest if, from a strategic point of view, inequality ought to be ameliorated or leveraged.  While the panelists in Islamabad took the view that economic discrimination against Balochistan must end, a Baloch nationalist might well say, let it play, as it affords greater urgency to my cause.  It used to be a common leftist critique of welfare programmes that these simply provide temporary reprieve to the workers while safeguarding capitalism from sharpening the class struggle.  So, there will always be inequality, and there will always be politics opposing various forms of inequality – beginning from the moment when a particular perception of unequal treatment is called out.  The interesting question is, who is for ameliorating or leveraging which dimension of inequality, and where?