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One percent v/s 99 percent
By Devinder Sharma

"Occupy Wall Street" is an expression of resentment against public policies that treat democracies as private club run by rich, for the rich. In many ways, anti-Wall Street movement is like Mahatma Gandhi's salt satayagrah.


Public anger against casino capitalism is spreading far and wide

Most families in India consider Diwali, the biggest festival in India, an auspicious occasion to buy gold and silver. Unfortunately for them, the prices of these precious metals have gone through the roof in the last few months, making it difficult for many to buy even a coin of few grams. Completely unable to comprehend the reasons behind such high price-rise, many of them can be heard asking, “Why have gold prices increased so much”?

Little do they know that the unprecedented escalation in gold prices is only because of speculation in which just one per cent of the investors are raking in huge profits while 99 per cent end up paying through the nose. This in short is the essence of the slogan, ‘We are the 99 per cent’, that is sweeping across the continents. More than 950 cities in 82 countries have seen thousands of people streaming in to the roads, squares and the parks to protest against economic inequalities. What began as a silent sit-in by a handful of protestors in the Wall Street -- the financial capital of the world -- New York a month back, has now spread like a wildfire.

The ‘Occupy Wall Street” campaign has hit the very foundation of the prevailing inequalities. Americans are angry because banks were allowed to earn huge profits after being bailed out with public money during the 2009 economic collapse, while average Americans continues to linger under financial duress. World over some $ 20 trillion were pumped in by desperate governments, including India, to save the economy from an impending collapse. Those who were primarily responsible for the financial crisis were rewarded with fat bonus cheques and golden handshakes. As I have often said, the economic Rubik cube has been designed in such a manner that it increasingly leads to privatisation of profits and socialisation of costs.

Take a look. The gaps between the rich and the average citizen in America has been widening ever since Ronald Reagan came up with the Reagan Tax cuts for the rich enabling them to take home as much as they wanted from the company profits. No wonder, while only 1 per cent Americans holds 42 per cent wealth, 80 per cent of the population are left to share just 7 per cent of the wealth. In other words, 20 per cent of Americans own 93 per cent of the wealth. Ironically, in the richest country of the world, poverty has broken 52 years record with 15.1 per cent population living in penury. Hunger too has crossed all limits with every one person in six queuing up for food supplement programmes.

While only 1 per cent Americans holds 42 per cent wealth, 80 per cent of the population are left to share just 7 per cent of the wealth. In other words, 20 per cent of Americans own 93 per cent of the wealth.

There are glaring similarities between the 2009 economic collapse and the Great depression of the 1930s. In 1929, the top one per cent of America controlled 60 per cent of the national income, which slumped drastically after the crash. Eighty years later, we see the same widening gulf in income inequalities. Top 10 per cent America today holds 90 per cent of the income gains. And as Nobel laureate Paul Krugman once said that whenever income disparity crosses 1:1000 marks, it is time to realise there is some thing terribly wrong with the economic policies. But such is the extent and control of corporate power over the policy makers, academia, and the media that any cry for a change is met with ridicule.

In India, the economic gap between the rich and poor exceeds by over 90,000 times. It is believed that the top 50 families hold economic wealth equivalent to one-third of country’s $1 trillion plus GDP. If these families were to migrate, India’s economic wealth would come crashing down. The population of high net worth individuals, a term that defines those having investable assets of $1 million or more, has grown to 1,53,000 in 2010, increasing from 1,26,700 in 2009 by a whopping 20.8 per cent. At the same time, as per the UN estimates, 456 million people in India are living on less than $ 1.25 a day. As per the 2010 Global Hunger Index of the International Food Policy Research Institute, India ranks 67th among a classification of 81 countries.

Again the same economic policies that have widened the income disparities in the US, Europe and for that matter the OECD countries, the richest trading block, are being aggressively pursued in India. For some strange reasons, I am left baffled when I see top economists counting the rise in stock market as an index of India’s economic growth. Many senior TV and print journalists, who dabble themselves in stocks, have been gleefully limiting the discussions to stock markets. They rejoice when gold and silver prices go through the roof, and are a picture of remorse when the stocks tumble. Any drastic fall in share prices is termed as ‘bloodbath’ and ‘mayhem’.

Nobel laureate Paul Krugman once said that whenever income disparity crosses 1:1000 marks, it is time to realise there is some thing terribly wrong with the economic policies. But such is the extent and control of corporate power over the policy makers, academia, and the media that any cry for a change is met with ridicule.

For nearly five decades now, India has successfully managed to keep the poverty line artificially low. Hiding the poor and hungry from public glare is one of the surest ways of reducing income disparities. There is always a dearth of money for providing adequate food to the hungry, but when it comes to helping business and industry I have never seen the governments battling an eyelid. At a time when the poverty line of Rs 32 and Rs 26 is being hotly debated, the Ministry of Commerce quietly announced a Diwali bonus of Rs 1,700-crore as an incentive for promoting exports and market diversification.

From 2004 onwards, the government has doled out more than Rs 22 lakh crore by way of tax exemptions to large business and industry. This amount is almost equal to provisions made for two annual Budgets. Such largesse helps strengthen the bottom line of the industries, and thereby help increase the number of high net worth individuals. These rich individuals invest in the stock market, and using their large investments control the direction of the markets. Much of the movement of stocks is controlled by hedge funds, which have after the 2009 economic meltdown moved to finance the purchase of farmlands in Africa, Latin America and Asia.

Over 271 million hectares of farm land, more than the area of Europe, has been acquired by big business. Stock markets also play a very significant role in commodity trading. The 2007 global food crisis, which witnessed riots in 37 countries, was driven by food speculation. According to the UN Special Rapporteur on Right to Food, speculation had driven up the global food prices by as much as 70 per cent.

From food to land and to the income gains of an average consumer, stock markets do have a significant role. But the benefits accrue only to the rich and powerful. “Occupy Wall Street” therefore is an expression of resentment against public policy that treats democracies as private club run by rich, for rich. In many ways, anti-Wall Street movement is like Mahatma Gandhi’s salt satayagrah. Starting with a handful of supporters, the peaceful movement grew into a national storm by the time it reached the shores of Arabian Sea. Let us hope the day is not far away when the ‘Occupy Wall Street’ movement too grows to a magnitude that allows people to regain economic power in their hands. After all, the 99 per cent too deserves economic justice.

The views expressed above are personal and do not necessarily reflect the views of d-sector editorial team.

Devinder Sharma  |  hunger55@gmail.com

Devinder Sharma is an award-winning journalist, writer, and researcher globally recognised for his analysis on food, agriculture and trade policy. 

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The shocking revelation is that the health and education sectors haven't remained untouched by this phenomenon. With 5th and 6th positions respectively for these sectors on the public perception chart on corruption, corruption has crept insidiously into these sectors of hope for the masses. With bureaucracy being fourth in the list of corrupt institutions in the country, corruption seems to have been non-formally institutionalized with little hope if public services would ever be effective in the country. With economic growth having literally institutionalized corruption, are we now expecting corrupt to be socially responsible - a different CSR.

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An interesting debate in UK's House of Commons delved on future of development assistance by the British Government. While prioritizing limited resources has been a concern, there has been no denying the fact that development aid must be guided towards tangible gains over a short period of time to start with. There are difficult choices for elected governments to make - should they invest in long-term primary education or in short-term university scholarships? Which of these will bring gains and trigger long-term transformation in the society. As politicians continue to be divided on the matter, poverty persists!!   

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