Equality of power leads to equality of wealth and opportunity.

As we wish everyone a prosperous 2017, our welfare, as individuals, is tied to the welfare of our nation and the welfare of the nation depends on its economy. The vote for Brexit, the election of Donald Trump and the resignation of Matteo Renzi, following the comprehensive rejection of his proposal to amend the constitution, have alarmed economists the world over, who see this as an epidemic of populism. Ruchir Sharma, of Morgan Stanley, compares 2016 to 1914, when World War I resulted increased protectionism and falling trade, which led to the Great Depression and finally, to World War II. Christine Lagarde, MD of the IMF, makes a case of reducing inequality. "Our research shows that reducing high inequality makes economic growth more robust and sustainable over the long term," she writes. But surely we cannot have economic growth without efficiency, and efficiency results in inequality. For instance, increased efficiency of labor results in the same amount of goods being produced by fewer people, but may result in some people losing their jobs. So those in employment earn more while those who have lost their jobs struggle to survive. Prof Noah Smith confesses that economists understand efficiency, which they can calculate, but tend to avoid discussions on fairness, which is seen as philosophical. "Whether inequality is bad depends on how it comes about and what it does. There is nothing inherently bad about inequality," writes Nobel laureate, Angus Deaton. Globalization may have brought great income inequality in India and China but it has pulled hundreds of millions out of poverty. The problem is that politicians need huge amounts of money to get elected which gives unfair advantage to the rich. "Rich people should buy yachts, establish foundations, or become philanthropists, not buy the government, which should be taken off the market," writes Deaton. Trouble is globalization has come to mean free markets, wherein finance is free to go anywhere in the world but people are restricted within national borders. The enormous liquidity unleashed by central banks has resulted in bubbles in stocks and bonds which are certain to collapse, thinks Anantha Nageswaran. Prof Kaushik Basu is alarmed by the displacement of workers by machines. He cites the example of Eastman Machine in Buffalo, New York, which exports textile machines to Bangladesh and Vietnam. "...it employs 122 people, who account for a mere 3% of its total production costs," he writes. Total freedom for markets leads to disaster. Finally, Prof Raghuram Rajan says that democratic accountability leads to good governance. Sadly, not in India, where democracy means an ever increasing number of poor people who can be bribed with populist measures to win elections. Kind people think that equality is economic, actually it is of power. Politicians are all powerful and their power depends on inequality. Inequality is here to stay.