The 'Dream Hoarders' and The Indian Economy
This may mean a significant challenge for the Indian economy, because trickle down may never work in India. While it appears perfectly logical that, with prosperity comes good education and health, it never works if the society is deeply stratified. One would like to think that the traditional divisions of Indian society, based on caste, have gone away after seven decades of affirmative action: But it was rather accentuated, with greater regional and income disparities and cultural and educational divisions.
In this context, I think the current discussions about rising inequality, which focuses too much on economic inequality and disproportionately on a handful of billionaires, is somewhat unhelpful. The conversations in India mirror the global conversation, and people complain about Ambanis and Tatas of having a disproportionate advantage over 'little men'. Indeed, there is no denying that this is a problem, but this does not, at least by itself, explain why a country like India don't want to address its challenges of health and education more proactively. The answer, I would argue, is to be found elsewhere, and for this, 'dream hoarders', a category Richard Reeves used to describe the top 20% of the American society, is quite useful as an analytical concept. This would be the top end of the Indian middle classes, which usually means people with best education (or at least, with best educated children), lifestyle, neighbourhoods, healthcare etc., and I believe one needs to look at the political roles and priorities of this segment of people to understand the problems that India faces.
Indian middle class, a popular term, is actually a problematic concept, as what is called middle class is in India is not what 'middle class' means elsewhere. And, while some politicians and CEOs wax lyrical about 300 million strong middle class, they miss the point about how stratified this class in the middle really is. As The Economist points out in a recent article, 'Indian middle class' has a big hole in the middle, with a lot of people teetering on the verge of proletarization, whereas a few sitting pretty with a lot more, extracting their full share of political and social privileges, while being covered by the excuse of being the middle class.
It is this segment, which is equivalent to Reeve's 'Dream Hoarders'. Indeed, they should be called dream hoarders if we acknowledge that the existence of an 'Indian Dream', a hope that life will indeed get better. The reason why these people should be called Dream Hoarders is not just because they have better housing, heathcare and education (and everything else), but they are deeply segregationist and believe in 'keeping out' others from such privileges.
This phenomena is less well analysed than it should be (if for no other reason than the people who usually conduct such analysis are usually on the wrong side of the divide) but the segregationism is a key challenge to building human capacity in an economy. In an economy where doctors are in short supply, say, segregated hospital system would create very good and very bad hospitals; gated communities would invariably mean poor neighbourhoods outside, and state schools would be deprived of the best teachers and better students as a private schooling system flourishes. And, because of the political influence of this middle-class-who's-not-in-the-middle, which comes both from their money as well as their ability to shape the climate of opinions, the policies of the state would be directed at actively accentuating such advantages.
This class is a bigger problem for the poor and the poor middle classes, because Ambanis do not compete for school places with them, and neither the very rich, secured in their London homes and private islands, look to gentrify neighbourhoods by driving the poor and the old out. The well-to-do does all that, and create an everyday discrimination not just on economic but cultural grounds. They seek to undermine rule of law - every policeman thinks twice before stopping a BMW as the predictable first conversation would not be about the traffic offence that was committed but 'do you know who I am' - and democracy, as invariably follows.
A big beneficiary of the national prosperity, the dream hoarders are a big challenge for its sustainability, and yet, it is the same people who are left in charge. That the conversation in India is about building bullet trains rather than fixing hospitals and schools should, therefore, not be a surprise. And, indeed, no one wants to talk about it, too. However, it is an useful reminder for those who are looking to India for the next big thing, that the democratisation of Indian middle class may be one of the preconditions for the realisation of the Indian promise.