A Summing Up

Inequality is treated by some economists as a technical issue – the consequence of a particular production technology and of differing returns to production factors as a result of market forces; from this perspective, large differences in wages are seen merely to reflect returns to human capital. Other economists may see inequality as a straightforward reflection of production relations, a consequence of the model of growth and the degree of exploitation associated with the process of capital accumulation. Both views may capture a part of the whole, for these relationships are usually present, but the history of Brazil and India suggests that a broader perspective is needed. We have tried above to analyse the pattern of inequality within the context of growth regimes – understood as a set of macroeconomic, social, and institutional factors that play out in markets and production relations, and take particular shapes because of the national and global context, the nature of the state, and the social interests that it represents.

These growth regimes vary over time, and of course differ between the two countries, but similar forces can be observed within each, and some outcomes are similar. Over the past seventy years, both countries have seen periods when inequality increased, stabilized, or declined, though generally not at the same time in both, for their histories have been different. This is partly because they have been subordinated to, and interacted with, global markets in different ways, but also because their political settings and production structures have followed different trajectories. Brazil industrialized successfully, especially during the authoritarian regime before 1980, when the state subsidized private capital accumulation, especially in the most dynamic sectors, paving the way for the internationalization of its internal market. India's autarkic industrialization stalled, but eventually, and much later than Brazil, it generated increasing capital accumulation and high growth, based more on services than on industry, and in a democratic framework. In contrast, economic growth was meagre in Brazil from 1980 to 2010, and the share of manufacturing in GDP went down. These different trajectories led to quite different patterns of inequality, for many years much greater in Brazil than in India.