3, మార్చి 2012, శనివారం

The growing economic inequalities between and with in the countries making the capitalist system unsustainable


The present day capitalist system is driven by the international finance capital, which is more interested in gambling and looting than in increasing production and purchasing power of the people. As a result on one hand, the wealth is becoming more and more concentrated with a fewer number of individuals where as the vast majority of the people are becoming poor day by day. This inevitable trend, which is the law of thee capitalist development, is making the international finance driven caopitalist system unsustainable.Even the leaders of the advanced capitalist countries are realising this, though unable to find a solution due to their commitment to the capitalist order. In the World Economic Forum held at Davos(Switzerland) held in January 2011, Mr. Min Zhu, a special advisor at the IMF, stated that “the increase in inequality is the most serious challenge of the world.”
The share of the workers in the total income has been  going on decreasing. During the period 1990 -2008, as per the  Human Development  Report 2010 published by the United Nations. In 65 out of the 110 countries this decline is there. Insome large countries, like United States and India, there is a substantial decline of upto 5 percentage points during this period. This resulted in the average decline of 2 percentage points in the share of the workers in the total income of the world.
The inequality in income is measured by the Gini Coefficient, where 0 represents complete equality where every one has the same income  and 1 represents complete inequality where one person has all the income and every one else has 0 income.  It was observed that since 1988 the inequalities are growing continuously and the Gini Coefficient now reached a serious stage of 0.71.
At present, the richest 2 percent of the world own half of the world’s wealth. The GDP(Gross Domestic Product, the combined income of all people in a country) in the poorest 48 countries is less than the combined wealth of the World’s 3 richest persons. The poorest 40 per cent of the World’s population aaccounts for 5 per cent of the global income, whereas the richest 20 per cent of the world’s population accounts for 75 per cent of world income. The average yearly income of the richest 20 per cent of the people in the world is about 50 times greater than the yearly income of the poorest 20 per cent of the people.
The inequality within the country is also growing in alarming proportions.
 In the USA, the top 1 per cent owned 47 per cent of the wealth in 2007, whereas in 1968 it held only 28 per cent of the wealth.While the income of the top 1 per cent rose by 18 per cent during the past 10 years, the income of the middle calss has fallen down. As of August 2011, America’s top 400 people held a combined $1.53 trillion in personal wealth(one trillion dollars is equal to 100000,00,00,000 or 1,00,000 crores dollars. 1.53 trillion dollars means 1,53,000 crore dollars.At present, one dollar is equal to Rs  49.50. Therefore 1.53 trillion dollars is equal to Rs 75,73,500 crores. Thus the top 400 persons in America own a personal wealth equal to 75,73,500 crores.). Between 1982 and 2011, the total combined fortune of the top 400 persons in America increased by 612 per cent in real terms, after taking inflation into account. Between 1983 and 2009, America’s richest 5 percent grabbed 82 per cent of the nation’s gains in wealth. The nation’s bottom 60 per cent of the house holds actually had less wealth in 2009 than in 2003.
In India, the number of dollar billionaires (having wealth of atleast Rs 5000 crore value) increased from 52 in 2010 to 69 in 2011 and their combined assets equal 30 per cent of the GDP (total income of the country). On the other hand nearly 80 per cent of the Indian population are surviving on less than Rs 20 a day. As per the report in the Times Of India dated 7-12-2011, the inequality in earnings doubled during the last two decades. India’s Gini Coefficient , the measure of inequality, has increased from 0.32 to 0.38 during the lat two decades. The consumption of the top 20 per cent households grew at almost 3 per cent per year in the 2000s compared to 2 per cent in the 1990s, while the consumption of the bottom 20 per cent house holds remained unchanged at 1 per cent per year. Of all the developing countries, India has the highest proportion of informal employment, consisting of a disproportionate number of women, home based workers, street sellers and workers sub contracted by firms in the formal sector.
The increase in inequality indicates the reduced purchasing capacity of the vast majority of the population. When the purchasing power is thus reduced, the production will suffer since the commodities produced will not be sold to the full extent. This is the cause of the crisis in the economy. Therefore to see that there is no crisis in the economy, the income inequalities have to be reduced. But the Governments in America, Europe and India etc which are serving the cruel desires of the international financial capital for looting the economies and people are adopting the policies meant for increasing the inequalities further.
The only way to save the world from the impending severe economic crisis is by organising struggles of the working class and the people for an alternate policy that will reduce the inequalities and increase the purchasing power of the vast majority of the people.

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