In most democratic countries, political freedom allows individuals to act as they please within the confines of the law, as long as their actions do not infringe upon the freedoms of others in society. While this concept is widely accepted and understood in today's democratic societies, what is often overlooked is the potential harm caused by the freedom of large corporations and business leaders. This freedom can have detrimental effects on a growing global population that is facing challenges in staying competitive and relevant in the modern world. With freedom comes the responsibility of propriety.
Flaunting Wealth
The recent wedding of Mukesh Ambani's son Anant saw his family spending millions of rupees, with reports estimating the cost to be around 320 million USD, equivalent to approximately Rs 2600 crores. There are even suggestions that the Ambanis could be spending double this amount. Following India's democratic freedom regulations, it is considered acceptable to allocate such substantial sums for a single event. Moreover, the elaborate arrangements generated numerous economic activities, benefiting various industries. As of August 20, 2024, Mukesh Ambani's net worth stands at an estimated USD 115.13 billion, positioning him as one of the wealthiest individuals globally. Hence, it could be argued that allocating a fraction of his wealth towards his son's wedding is reasonable. While such expenditure might have been deemed acceptable around 30 years ago when social media was less prevalent, the current era of widespread internet and mobile phone usage has made every aspect of our lives instantly accessible to a global audience. Consequently, ostentatious displays of affluence are exacerbating the wealth disparity between different socio-economic groups. Large corporations succeed due to the presence of consumers who purchase their products and services. Nevertheless, flaunting excessive wealth can deter potential customers from engaging with the brand, as we subconsciously tend to associate ourselves with those on a comparable level.
The rising Unemployment in Asia
With a median age of around 28/29, India is currently introducing just over one crore (10 million) young Indians into the workforce every year. Not all of these individuals can secure government jobs or positions in the software industry. Therefore, major corporations must take on the social responsibility of ensuring that these young Indians find sustainable professional paths, which may not necessarily involve traditional employment. Failure to fulfil this duty could result in alienating future customers for these businesses. Moreover, on a broader scale, without a financially stable population, there will be a lack of demand in the free market for products and services.
Reflecting on recent developments in Bangladesh, it is notable that the median age of the population is around 25/26 years. The country is currently grappling with an unemployment rate of 5.06%, which represents a surge from levels observed a decade ago. These circumstances, coupled with political instability, have triggered student demonstrations and led to the ousting of the ruling government in Bangladesh. Could this situation be indicative of a divide between the privileged and the underprivileged? While I do not claim to be a political expert, I am merely offering my observations as an impartial bystander.
Brut Capitalism
One notable example is the significant disparity between the median salaries of employees and those of CEOs. Equilar, an executive data firm, conducted an annual analysis of CEO compensation for The Associated Press, examining salaries, bonuses, perks, stock awards, and other forms of payment for 341 top executives. The study revealed that median CEO pay surged by nearly 13% last year, a stark contrast to the 4.1% increase in wages and benefits for private-sector workers in 2023. The average annual wage for American workers in 2023 was a mere $65,470, as reported by the Bureau of Labor Statistics. At this rate, it would take an individual 445 years to earn what a middle-of-the-road CEO makes. According to the 2024 Deloitte India Executive Performance and Rewards Survey, the average CEO compensation is Rs 13.8 crore, with CEOs who are also promoters or part of the promoter family receiving an average of Rs 16.7 crore.
According to the democratic laws of a country, the disparity between CEO pay and the median pay of employees may not be deemed as inherently wrong. However, the real concern lies in the psychological impact this gap has on the vast majority of ordinary employees and workers. This growing divide can lead to feelings of cognitive discontent among those who may never reach the upper echelons of the corporate hierarchy in their lifetime. The perception of limited upward mobility and the widening income inequality can breed resentment and demotivation within the workforce, potentially affecting productivity and overall morale. Moreover, the issue extends beyond just financial compensation. It touches upon deeper societal issues such as social mobility, fairness, and the distribution of wealth. The widening gap between the highest-paid executives and the average worker underscores broader systemic inequalities that may hinder social progress and economic stability. Addressing this issue requires a multifaceted approach that considers not only legal frameworks but also ethical considerations, corporate responsibility, and social impact.
The Balancing Act
Hitler's rise was a result of the German government's inadequate response to the escalating unemployment. In the 21st Century, the failure of governments and major corporations to address the growing inequalities will likely result in social unrest in various regions around the globe. Although we should appreciate the political freedoms present in many democratic countries worldwide, it is equally important to conduct ourselves with decency in our personal lives. Extremism in any form disrupts the natural balance of the world and society, and ultimately, a new equilibrium will need to be established.
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