Phoenix has risen

The events over the last few weeks only strengthens by belief that socialism is making a come back in political sphere of many countries. Increasing delusion with the way governments are approaching the problem of solving the various monetary and economic issues plaguing the world currently, is the prime reason for this increasing aversion towards unbridled capitalism. Anything in excess is always bad, and over the last decade we have seen the impact of unregulated free markets. We are still trying to come into grips with the same.

The growth of the last decade has been real and illusionary at the same time. The growth in the income levels of people has been strong but the real fruits of the growth has not been spread equally among the population. One of the strong belief's i always had was that the growth has only increased the inequalities within each country, with the sub section of the population taking the cake. This sub section resides in the top most tier of the society with respect to income. To verify if the above assertion is correct, lets have a look at the Gini coefficients of some of the countries,

1. USA : 45

2. Greece: 33

3. Ireland: 32

4. Singapore: 52.2

5. Portugal: 38

6. Italy: 33

7. Ireland: 32

8. China: 46.9

9. India: 36.9

10. Brazil: 56.7

The above data indicates the above countries already have a lot of inequality as far as income levels are concerned. It would be interesting to see how the Gini coefficients varied between 2004 to 2010, however there is no availability of such data. However the general trend among OECD countries has been that the income levels of the top percentage has grown at a rate higher than the rest of the population since 1980. Thus the lead has only increased. This increasing inequality has lead to resentment among the populace during the current downturn. The policies followed by various governments in overcoming the current downturn are inclined towards reduction of various government programs to reduce the deficits. However this decrease in times of low economic growth would only impact the lower strata of the society more that the upper strata. The government budget cuts coupled with the low job availability in increasing discontentment among the lower strata.

This group is increasing resorting to ways by which there thoughts can be heard. This is similar to what happened in Greece, namely the riots in Athens. As long the governments follow policies which are more inclined towards reducing losses for banks and other investors and less towards trying to find a sustainable policy which would lead to increase in job growth, the restlessness among the populace is only going to increase. The offshoots of this restlessness shall be revival of socialist policies and more countries becoming more inward looking. This would herald a stop to the Globalization phase. The earth shall again revert to becoming round from flat for a short period of time.