English Language Questions for CLAT | QB Set 22

If one were to read public debates in India on economic equality, one might be forgiven for associating equality with four sins. First, what matters, apparently, is poverty reduction, not inequality — inequality is dismissed as a distraction. Second, equality is portrayed as the enemy of entrepreneurship. Third, it is assumed to entail greater bureaucratic control by the state. Finally, talk of equality is cast as resentful, socialist levelling down. We can, of course, have a philosophical debate about whether equality has intrinsic moral value. This is also not the place to discuss the tired debate over equality of opportunity versus equality of outcomes. But what is striking about these associations is the absence of even a rudimentary understanding of why, quite apart from any intrinsic appeal, there are compelling pragmatic reasons to take equality seriously, precisely to achieve the very objectives that inequality is said to advance.

Poverty reduction and equality not rivals

First, the claim that poverty reduction and equality are rivals is a laughable piece of mystification. High inequality can directly undermine poverty reduction by weakening the growth elasticity of poverty. When income gains are highly concentrated, aggregate growth translates into fewer absolute gains for the poor, even when headline growth rates appear impressive. As India’s experience shows, unequal societies systematically underinvest in the public goods necessary for durable exits from poverty: health, education, sanitation, and social protection. The persistence of malnutrition, learning deficits, widespread precarity, and wage stagnation despite decades of growth illustrates the structural limits of poverty reduction pursued without regard to distribution.

We also know that distribution affects investment. Extreme concentration of wealth can depress consumption and thereby weaken investment demand. Equality is not inherently hostile to growth — it is often a precondition for growth that is broad-based and capable of delivering wage gains for the majority. Inequality may not be intrinsically good or bad for growth in the abstract, but in modern, human-capital-intensive economies, as Brad DeLong’s account of 20th-century economic history shows, high inequality is far more likely to impede growth than sustain it.

Equality and entrepreneurship share fragile, complex relation

Second, the relationship between equality and entrepreneurship is far more complex than is usually acknowledged. Under some conditions, inequality might spur growth, but this relationship is contingent and fragile. In India, much attention is understandably devoted to the role of state regulation in impeding entrepreneurship. But the concentration of wealth can be just as damaging to the diffusion of entrepreneurial activity. It enables political capture and regulatory bias that favour incumbents, skewing policy in ways that undercut new entrants as effectively as overt bureaucratic control. Extreme inequality restricts who can afford to take risks. When access to credit, education, networks, and legal protection is tightly correlated with inherited wealth, entrepreneurship is drawn from a narrow social base. More equal societies expand the pool of potential entrepreneurs by lowering entry barriers and reducing the catastrophic costs of failure.

High inequality also produces severe misallocation of talent. Capable individuals are drawn into rent-rich sectors, finance, lobbying, speculation, and regulatory arbitrage, rather than productive innovation. What inequality often protects is not entrepreneurship as such, but rent-seeking incumbency — the ability of the powerful to insulate themselves from competition. Behind the façade of state regulation lies the deeper power of unequal capital distribution. Inequality and state control are frequently symbiotic, not opposed.

Third, equality does not logically entail bureaucratic micromanagement. Indeed, high inequality often requires more discretionary state power, not less: subsidies to capital, regulatory forbearance for large firms, selective tax enforcement, and ad-hoc bailouts. By contrast, egalitarian strategies rooted in universalism, universal basic services, and public provisioning of health and education can reduce administrative discretion and political capture. Universalism is often institutionally simpler and less corrupting than an anxious, privileged order preserving inequality managed through targeted patronage.

India more threatened by high concentration of capital that seeks to control

Finally, the charge of resentful levelling down misunderstands the direction of causality. Egalitarian policies are not about pulling the top down, but about preventing inequality from corroding the social and economic conditions necessary for sustained prosperity. High inequality erodes social trust. India is arguably less threatened by egalitarian resentment than by a high concentration of capital that nervously seeks to control the rest of society, fearful of challenge from those who may be more capable or innovative. If excessive regulation is partly a function of low social trust, then inequality itself is a major contributor to over-regulation. One lesson of 20th-century economic history bears repeating: equality is not an ethic of envy, but a form of social insurance for capitalism itself.

In this sense, the way income inequality is framed in public debate is a red herring. By associating all talk of equality with resentment, we avoid asking serious questions about inequality’s real effects. With few exceptions, even among those concerned about inequality, there is little resentment of the fact that some people are very wealthy. The political force of resentment against wealth is often exaggerated. What people worry about instead are the pragmatic consequences of inequality for growth, entrepreneurship, social trust, and institutional integrity. What is rarely acknowledged is that resentment is not directed at wealth per se, but at the translation of wealth into other forms of power that undermine political dignity and agency. For a social contract to tolerate wealth inequality, it must ensure that such inequality does not hollow out democratic citizenship. In India, the oligarchic shaping of political agendas and the distortion of public values may be at least as serious a threat as populist overreach.

The precise policy responses are, of course, complex. The relationship between growth, entrepreneurship, and inequality is contingent. But it is a measure of how degraded our public discourse has become that these elementary truths — that equality need not impede growth or entrepreneurship — have to be restated at all. There is good reason to suspect that those who seek to silence talk of inequality in the name of the poor are, in fact, seeking to protect oligarchy.

[Source: The Indian Express]

Question 1

What is the author’s primary criticism of public debates on economic equality in India?

A. They focus excessively on philosophical theories of equality
B. They ignore the role of entrepreneurship in economic growth
C. They exaggerate the moral value of equality
D. They associate equality with negative assumptions without understanding its practical benefits

Correct Answer: D

Question 2

According to the passage, why does high inequality weaken poverty reduction?

A. It reduces government expenditure on welfare schemes
B. It discourages foreign investment
C. It slows down overall economic growth
D. It concentrates income gains, limiting real benefits for the poor

Correct Answer: D

Question 3

What does the author suggest about the relationship between equality and economic growth?

A. Equality can support broad-based growth and wage gains
B. Equality always restricts investment opportunities
C. Growth is independent of income distribution
D. Equality is harmful in modern economies

Correct Answer: A

Question 4

Why does the author argue that extreme inequality harms entrepreneurship?

A. It increases taxation on small businesses
B. It discourages innovation through excessive regulation
C. It limits access to resources and opportunities for potential entrepreneurs
D. It promotes universalism and public provisioning

Correct Answer: C

Question 5

What does the author mean by describing equality as “a form of social insurance for capitalism”?

A. Equality eliminates the need for private enterprise
B. Equality helps sustain social trust and long-term economic stability
C. Equality replaces regulation with market forces
D. Equality ensures equal outcomes for all individuals

Correct Answer: B