Why Good Things Happen

Sam Pitroda was one of the most famous men in India in the 1980s. As the seer of Indian telecom, he was responsible for millions of long-distance calls by Indians getting through. With that French beard and words that a man with a French beard is expected to say, he looked like a man who would never win an election in India. Yet, he was one of the most powerful men in India because the Gandhi family took him seriously. A few days ago, Pitroda said that India should adopt an inheritance tax and that the wealth of the rich should be redistributed. It was a very 80s moment from a superstar of the 80s. The BJP portrayed his statement as part of the Congress manifesto, which is not true, and the Congress party said the guy was on his own. This is odd because he was being framed as a politically incorrect man while what he said was something that would appease the poor.

After all, his message was that when the rich die, some or most of their wealth should be taken away from their kin and given to the poor.

I am not so interested in the political circus around the statement because there is something more interesting about it.

What is useful about the controversy is the rare peek it offers us into how humane ideas arise. There is something about the way Pitroda said it, and the fact that he even said it, that tells us how such ideas as inheritance tax may have come about in other countries. (India, too, had an estate tax, but it was abolished by the Rajiv Gandhi government in 1985.)

How does society bring in reforms when powerful people stand to lose from change?

You can say that change happens because good people bring about good things. You can say that Pitroda wants an inheritance tax because he is better than most of us and wants to change the destinies of the poor. I don’t think anyone seriously believes that in the case of Pitroda, but most people do believe that in general, good things happen in the world because good people will them. I think that is not the way good things happen.

If reform is not brought by the uncontainable good of good people, then what is causing it? Why do good things happen?

The reformation of a society can be explained without giving too much credit to reformers and that the good guys somehow win some battles. Society changes for the better when the second rung in the social hierarchy takes on the most powerful. This is usually done in the name of the poor, for a moral cause.

The other reason society changes is that children do not want to be their parents. Sometimes this includes children of rich parents with exaggerated contempt for some qualities of their parents that leads them to do what their parents would never, especially virtuous things. But mostly, change occurs because of the first reason: Because the second rung, the aristocracy, gets tired of the royalty of their time. What can hurt royalty more than society taking away half of what the monarchs planned to bequeath to their genetic offspring?

Pitroda was probably never a billionaire, but he was a part of the elite of a time when class and sophistication alone could take you high up social peaks. In a changing world, a very different sort of people now occupy those peaks. Even India’s new capitalists look different from his time.

What would you do if you were him and wanted to take on the new elite? You would start with doing something that would upset them. Maybe you would suggest that their children should not get to inherit their fortunes freely. They should pay a price for their luck.

There is a sort of inequality that looks bad in statistics. For instance, when you look at the top 1% and how much of a nation’s wealth they own. But there is another sort of inequality that never shows up in our statistics, which is far less natural, and more poisonous. It does not feature billionaires. It is the imbalance that benefits the upper middle class on every turf where they directly compete with those who are poorer than them. 

Billionaires and their children do not compete with the rest of society. Except for the roads perhaps, there is no resource, no aspect of life that they are forced to share with the other classes. But if you consider millionaires or the vast upper middleclass, they do compete with the rest of society in entrance exams, business startups, cinema, literature and the arts. And they have an unfair headstart created not only by ancestral wealth but more effectively by social contacts. Seen this way, billionaires have a far smaller role in inequality than the upper middle-class.

Often, policy activism is a war of millionaires against billionaires. This was, in spirit, the origin of that celebrated document, the Magna Carta, from where white people say democracy emerged. To fix the king, the barons had to say modern things. That the king would not punish a person until guilt is proven, or that the state will not usurp the land of its people, and that in peacetime England would protect merchants as they plied their trade. Even the French Revolution was not as simple as the poor revolting against the elite—it was a risky uprising of aristocrats against their bosses in the name of social reform. India’s freedom movement itself was, among other things, a kind of class struggle between the top two classes of the time, the British and the native elite.


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