Extreme inequality in terms of income, wealth, gender and regions has become the hallmark of neoliberalism. Fewer than 60,000 multi-millionaires who are the top 0.001 per cent wealthiest of the world possess three times the wealth of half of humanity. Their share has grown over the years. The top 10 per cent of the world earn more than what the bottom 90 percent of the population earns and the poorest 50 per cent earns only 10 per cent of global income. In terms of wealth, inequality is even higher: the top 10 per cent possesses 75 per cent of the total wealth, while the bottom 50 per cent owns only 2 per cent of total global wealth.

The recently released World Inequality Report shows that global inequality has reached unsustainable levels. Personal income and wealth inequality captured in this report also relates to functional income inequality reflected through declining share of wages consistently across the world while profit share increased sharply in recent decades. These figures do not on their own become politically explosive because people generally do not care about inequality; rather, they are concerned about how their personal income and wealth grows temporally in absolute or relative terms. One usually bothers about comparing income over time, that is, whether one earns more in nominal or real terms compared to the past. Mostly one would bother to compare income levels with people of similar occupations or income ranges. Therefore, if the ratio of income and wealth of top 10 with respect to bottom 50 percent increases over time that exists as a benign statistical artifact hardly generating discontent against the super-rich. Inequality becomes politically explosive only when rising income inequality is seen through the lens of exploitation. Because only then does it give a sense that rise in income and wealth of the rich is not independent of the falling share of the poor, but they are very much linked to each other, one is precisely the cause of the other.

Dimensions of Inequality

Inequality has multidimensional aspects influenced by several social and cultural processes. It is reflected in the manner societies are organised and the institutional distribution of access to resources and opportunities. Wealth inequality according to the report has increased significantly in the past 10 years. In the last decade, personal wealth of the bottom 50 per cent of the population grew by 2-4 per cent per annum and because of the low base such a growth could only share 1.1 per cent of the growth of global personal wealth. The top 1 per cent of the population experienced annual growth in the range of 2 to 8.5 per cent and accounts for 36.7 per cent of global wealth growth. The top 50 individuals recorded the steepest growth of wealth of 8.5 per cent per annum. We also see huge income gap by gender. In fact, women account for only one-fourth of global labour income, which remained roughly unchanged since 1990. However, women work on an average 53 hours a week compared to men working 43 hours a week. The wage disparity continues and if we count women’s unpaid labour, they earn only 32 per cent of men’s hourly income. Women also experience restrictions in vertical mobility, political participation and wealth accumulation. Half of the labour force being unpaid, underpaid or unemployed creates barriers for any country’s economic development.

The report also highlights an interesting fact regarding climate crisis. It shows that the poorest half of the global population accounts for only 3 per cent of carbon emissions associated with private asset ownership while the top 10 per cent is responsible for 77 per cent of emissions and the wealthiest 1 per cent alone account for 41 per cent of the global emissions, which is double of what the entire bottom 90 per cent accounts for. In other words, the rich are largely responsible for the carbon emissions while the burden of climate change is disproportionately borne by the poor. Due to rising temperature and sea-level it is the livelihood of the fishermen and farmers residing in the coastal regions that gets immediately affected. The working people who are on the streets, working at various construction sites, in the factories that emit toxic chemicals and gases do not have the option of avoiding pollution by working from home or using air purifiers. It is they who suffer the most due to bad air conditions and climate change.

The report also shows rising inequality in India. The top 10 per cent account for 58 per cent of total income and 65 per cent of total wealth in India while the bottom 50 per cent population shares only 15 per cent of income and 6.4 per cent of wealth. The richest 1 per cent account for 22.6 per cent of total income and 40.1 per cent of wealth. The income gap between the top 10 per cent and bottom 50 per cent has increased from 2014 to 2024. The sharp rise in the personal income share of the top 10 per cent and the decline in the share of the bottom 50 per cent coincides with the liberalised regime in India.

Inequality and Politics

This rising inequality is accompanied by secular stagnation in capitalism implying a protracted slowdown in economic growth. It also has implications for the future share of social product for the majority of people, because they would increasingly be denied equal access to education, health and sustainable environment, technological skills and so on, thereby accelerating deficits through generations. Particularly because of increasing returns from wealth or assets, in a financialised regime the rich could increase their share in the global pie and also in the country’s GDP much faster. This is also facilitated by a tax structure where the effective tax burden drastically falls for the top rich while growing gently through other parts of the income distribution. Such inequality can be politically manageable in two ways: transferring a part of the surplus that could help barely meet the subsistence requirements of the dispossessed mass and the second and most importantly by resisting class mobilisation that makes people aware of the causes of inequality. This is why neoliberalism requires a protracted nurturing of fascist politics that help demobilising class consolidation and resistance. In some countries it is black versus white, in some Muslims versus Jews, for others it is immigrants and settlers, and, in our country, it is Hindus versus Muslims. Engineering a divide within the working people can only save the ruling class from political explosions against such unprecedented inequality levels. It ensures the continuation of accumulation of profit without question and empowers governments to hand over public assets to private corporates. Therefore, the fact of rising inequality can only be checked by the struggle for redistribution, demanding higher taxes upon the super-rich, ensure rights of workers in terms of their share in the growing productivity, enforcing equal access to income and leisure independent of gender and sexual identity, providing basic food, health care, education and social security for the working people.