Exclusion or Inflation
Exclusion or Inflation: Is there a third choice?
If one tries to include all strata of society in economic growth, everyone’s purchasing power increases. Give the poor easy loans, and they’ll take the banks down when they default. Give them earning power, and they will vie for a piece of the limited pie you want – inflating everything from real estate prices to vegetable rates.
What’s the solution?
1) Exclude sections from economic growth?
Make the barrier between exclusion and inclusion higher, so that few cross it. Those who do, will be able to afford a quality life. Those who already do, remain that way. Those who can’t, get angry.
2) Include everyone, in a totally free market?
Lots of people are included in economic growth. Due to the paucity of resources, inflation grows. While the poor earn more, their rupee buys them less so they almost stagnate. At the same time some of those who were earlier rich find their worth decreasing. As it is always more painful to traverse Maslow’s pyramid the other way, the erstwhile rich cannot handle the drop. The (vocal) rich get angry at finding themselves poor.The poor don’t realise they are rich, since the target has shifted.
3) Exclude everyone?
Doesn’t make sense, since society stagnates.
So, we arrive at a new question: is Inclusion a zero-sum game?
