Sunday, June 13, 2010

Income and intensity of unrest

History is littered with examples of the ruling class trying to keep the masses impoverished. I always wondered why it was necessary to keep people impoverished. Why can't people be rich and still suppressed? It seems to me that the problems of poor and nearly poor have different impact on social unrest. First, money gives a means to the poor to battle for their rights. Second, if people with means see someone they can identify with being oppressed then they are more likely to do something about it.

What this means is that income distribution in the form of a pyramid, lowest income has highest population, is better suited for oppressive regimes. And as income distribution turns into a diamond shape (middle class has most population) things start turning around. For a while middle class builds safety nets to prevent falling back. But once such a safety net is in place, it seems, this mass of population gets politically active.

The unrest so caused, is more potent and revolutionary than unrest of poor masses. I believe China is at such a point. The flexibility of Chinese political system will be tested very soon (may be 3-5 years). The political system in China is more rigid than a democratic system. If its leaders are able to understand and respond to these changes (they have shown more promise than politicians of other nations), then China will be the superpower. Otherwise we will see flimsy wars and deliberate crisis creation to take focus away from internal situation.

India is also likely to see this change in similar time frame, but the democratic setup is super-flexible and thus unlikely to impact much in India. The changes too are much more evenly spread. A lower-income-class bias in policy has started gaining traction since 2005.

My book "Subverting Capitalism & Democracy" is available on Amazon