Context:

• This article is based on an Editorial “The World Must Fight Economic Inequality to Safeguard Ideals of Democracy” which was published in the Live Mint. The rapid advancement of digital technologies, unchecked globalization and rising inequality have transformed our political and economic systems, fuelling socio-political unrest.

Statistics on Global Economic Inequality

• The global economic inequality increased steadily between 1820 and 1910.
• Untolerating inequality, as observed by the data from 1995 to 2021:
  • The world’s richest 1% gained 38% of the increase in global wealth, while the bottom 50% only possessed 2% of this growth.
  • Global wealth grew at 3.2% annually, while the wealth of the top 0.000001% increased by 9.3% annually.

Rise in Inequality & Undermining of Democracy

• In this age of digital connectivity and globalized commerce, excessive wealth concentrations undermine democracy in two main ways:
  • Globalization of Finance and Supply Chains: It has enabled wealthy and powerful countries to affect the well-being of people far beyond their borders.
    • Example- Citizens of Burkina Faso cannot vote in US presidential elections, but the decisions of US presidents affect their daily lives as much as those made by their own leaders. 
      • This dynamic suggests that globalization erodes global democracy.
  • Political Power: Extreme wealth often translates into political power, the concentration of wealth in a few hands is against the value of democracy.
    • Example- This is particularly evident in the age of Big Tech, when billionaires can gain an outsize influence on public discourse by taking over critical media platforms or manipulating search results.

Also Read: India’s Economy Transition, Characteristics, Challenges, Inequality and Rank

Conclusion:

To save democracy, there is a need to mitigate inequality and curb the outsize influence of a few ultra-wealthy individuals. With the evolution of time and knowledge, it is hoped that the advances in generative Al will level the playing field in the technology sector and thus help curb economic inequality.