If we look back, a bird’s eye view at history will tell us that the world has definitely progressed in terms of growth, may it be telecommunication, transportation, technological advancement and what not. But along with this growth, inequality has grown too, and that too at a large scale. One may question that despite such growth, why has the system over all failed to, reduce the inequality, let alone eliminate it. The answer to this question lies in the inherent characteristic of the economic system that prevails in the world today, i.e. capitalism.

The system allows private ownership and equality of opportunity, but as it is self evident from its name, a capitalist invests capital, which is under his private ownership, and those who cannot afford to own the means of production, become corporate slaves, or slaves of the capitalist economy. Why has this inequality grown over time, this question can be explained in terms of two philosophies.

Firstly I would quote Karl Marx, who was of the opinion that the first epoch in history was when slavery was introduced in the feudal societies, because the slaves, which were the means of production at that time, were privately owned.

According to him, after the working class of Europe realises that they are being exploited and once they realise their strength by making unions against the capitalist stock, they will carry out a mass protest that would eventually give rise to a new system where the means of production would be communally owned, and this division between different classes in society will end. But despite his speculation, this did not turn out to be the way he depicted, rather inequality has grown at a faster rate. Therefore, Lenin gave an extension to ideas of Marx, and tried to address the question as to why inequality has grown and the working class has become more subordinate rather than revolutionary. He supported this argument by giving the concept of periphery states. According to him the living standards of 20th century European labourers had improved because of high level of colonisation and imperialistic policies of the West, which he called, the core states. As west became the core, the rest of the world became periphery, and exploitation grew at international level. His ideas were further extended by Wallerstien in terms of world system theory, where he tries to answer the question why there were no revolutions among the working class of peripheries who were subject to intense exploitation. He gave the concept of spatial dimension, where he argued that capitalist market especially, in a globalised world is flexible, and in case of a crisis within the market the stakeholders join hands to save the market.

When the products in the developed core become expensive, the purchasing power of the periphery decreases owing to more exploitation of material as well as human resources. So, this might have led to revolutions in the peripheries, but the market then promoted the growth of semi peripheries to avoid any such situation. Hence semi-peripheries shared the responsibility of the peripheries and ensured to suppress the revolt as long as they can. Henceforth, the inequality now, grows at two levels, i.e. within a state, a bourgeoisie and a proletariat class, and all across the globe, in terms of core, semi-periphery and periphery states. One such example can be Central America and Latin America, where i would quote a reference from the book Confessions of Economic Hitman, where he specially focused on the dismal conditions prevailing in Latin American states, and how USA exploits their labor and resources, and how inequality prevails within Latin American states, huge buildings and luxurious hotels at one end, and poverty stricken areas with malnourished naked children at one end. 

So is the story of growing inequality of Pakistan. One may quote the research report of former Chief Economist of Pakistan Mahbub-ul-Haq. According to this report the growth in GDP was coupled with the growth in over all income inequality in the society. The wealth was said to be accumulated in the hands of 22 families, which were considered influential and powerful. And this is what capitalism is expected to bring along. 

One thing which the policy makers of Pakistan failed to learn from the developed world, was, how they developed. The first world capitalist states of today, started off their economic journey by adopting a mercantilist approach. UK colonised various states, only to extract their resources, manufacture them into finished products, and present them in the global market. All this trouble was undertaken, to ensure less imports and more exports. USA, being the flag bearer of the capitalist system, kept its economy closed and made its own industry self-sufficient before opening their market to the world.

China, kept its economy closed at least for five decades after its great revolution. One may conclude, that all the leading economies of the world, did not allow exploitation in the name of capitalism, until they made themselves self-dependent in terms of business, economy and market. Pakistan, following the path of the developed world, adopted the system as it is, without acknowledging the fact, that the journey undertaken by them was not as direct as it seems to be.