Former Indian central bank governor Raghuram Rajan warns of the challenges facing global democracy.
12 March 2019
Former Indian central bank governor Raghuram Rajan has warned capitalism is “under serious threat” as it has stopped providing for the masses.
Mr Rajan told BBC Radio 4’s Today Programme “when that happens, the many revolt against capitalism”.
He said governments cannot afford to ignore social inequality when considering the economy.
Mr Rajan led India’s central bank and was also a former chief economist at the International Monetary Fund (IMF).
He has been tipped by some as a possible successor to take over from Mark Carney as governor of the Bank of England.
“I think capitalism is under serious threat because it’s stopped providing for the many, and when that happens, the many revolt against capitalism,” he told the BBC.
Mr Rajan said it was possible in the past to obtain a middle class job with “modest education”.
But the landscape has changed in the wake of the 2008 global financial crisis and the resulting austerity.
“Now, if you really want to succeed, you need a really good education,” he told Radio 4.
“Unfortunately, the very communities that are hit by the forces of global trade and global information tend to be communities which have deteriorating schools, rising crime, rising social illnesses and are unable to prepare their members for the global economy.”