Corona Daily 480: The Lottery of Birth

Inequality is extensively researched and reported, but rarely acted upon.

In 2002, Queen Elizabeth’s mother died at a 101 years, leaving her daughter an estate worth 50 million pounds. It included works of art, jewels, antiques and thoroughbred horses. The law would have required a British citizen to pay 20 million pounds as inheritance tax. But the Queen is above the law and is tax-exempt. Queen Elizabeth’s current annual package is 50 million pounds.

The economics textbooks we studied told us that capitalism rewards ability, enterprising spirit and hard work. I tried to work out which of these the Queen would fit under. She didn’t. She was merely born in the right palace.

It’s not only about the queen. Donald Trump and Mukesh Ambani, India’s richest man, have built on what their fathers started. For that matter, each of us is an outcome of the family and the country we were born in. Warren Buffet calls it the ovarian lottery. And in most cases, our station in life remains largely unchanged.

Inheritance perpetuates inequality. India abolished estate duty in 1985, Russia in 2006. It exists in the USA, but 11.58 million USD worth of assets are totally exempt. An American child can inherit 11.58 million dollars, even if they were earned dishonestly. The current minimum federal wage in that country is 7.25 USD per hour. A poor American on minimum wage will need to work for 760 years, without spending a cent, to reach 11.58 million USD. 

You will find that the concept of giving a basic monthly income is usually questioned by those who live in a house their grandfather built, and run a business started by their father.

We accepted we are not all equal, as communism had propagated. But we didn’t know we can be so unequal. That the world’s 26 richest people should own as much as the world’s poorest 50%.

In a circus, the animal trainer feeds the animal after every trick performed. That’s both an incentive and a reward. The animal is fed just enough to be motivated, but not more lest it should refuse to obey. In today’s distorted world, most people are like those circus animals, ruled over by a few throwing minimum wages at them.

Yesterday, two miles north of my home in Mumbai, 2000 migrant workers gathered to protest defying orders, putting themselves at risk of getting infected. Most of them, taxi drivers, street vendors and others, have no money left for food. They have voting rights and freedom of expression, which are good things to have. But they can’t be eaten.

Hunger and thirst are so basic; satisfying them should be considered a human right. If the world learns how to satisfy this right, that could make a good change post crisis.

Ravi