Nitin Kamath, the founder and CEO of Zerodha, on Friday delivered what some found a surprising and elaborate take on the rising levels of income inequality across the world and in India for someone credited with building.
In an unusually candid post on X, Kamath admitted that his early ambitions were quite different from what they are today: a ₹5 crore corpus and a quiet retirement in a Goa beach shack.
However, his journey with Zerodha had now forced him to confront the “dark inequalities of wealth” from the other side of the ledger.
In his post, Kamath expressed concerns about the rising levels of income inequality across the world. The concentration of wealth among the top 1% is severe and getting worse,” Kamath noted, pointing to the post-2008 era of asset price inflation as a primary driver—where those who already hold financial assets see their wealth compound while those without them fall further behind.
Citing episodes from global history as a precedent for how extreme economic inequality can lead to dangerous outcomes, Kamath said his fears are propounded by recent developments like AI.
“History rarely shows that sustained, extreme inequality ends well. Btw, all of this even before AI, which has a non-trivial probability of making things worse,” Kamath wrote on X. “To me, it increasingly feels like sitting in a car with the brakes cut, watching a cliff approach,” he added.
The post-2008 era of rising asset prices has likely made this worse, because the people who hold financial assets are, by definition, people who already have money.
In his post, Kamath posted a screengrab of an infographic posted by an organisation called Our world in Data. Our World in data is a think tank that’s been built by professors at Oxford. The graph accompanied by other research posted by the group has been placed below.
The concerns raised by Kamath are not merely anecdotal; they are backed by the cold, hard lines of economic divergence.
As illustrated in the data above, India’s income share for the richest 1% has seen a dramatic, upward trajectory over the last 5 to 6 years, now hovering near historical highs. While the global Gini coefficient remains a staggering 0.68, India’s internal wealth disparity is becoming increasingly visible.
Kamath’s latest comments about rising levels of income inequality in the world came just days after a legion of Industrial and domestic workers in Noida initiated a large protest against stagnation that has not kept pace with the rising cost of living.
Zerodha founder’s response to the economic inequality problem
While the founder of Rainmatter stopped short from prescribing solutions from the problem, he maintained that it has become important for everyone looking at the problem to acknowledge one fundamental truth about wealth.
Kamath stated that in the grand scheme of things wealth that just sits in financial assets and keeps compounding in value does not do much good for anyone except for those who have such assets and wealth.
And if that wealth isn’t in motion, if it isn’t doing some social good, the fabric that holds us together will only continue to fray and lead to cynicism, resentment, and worse yet, nihilism. We’re already seeing all of it.
He further warned that if this wealth that’s tied up in financial investments is not poured into something that materially makes the lives of everyone better than it can lead to society’s deterioration as a whole.
“If the wealth isn’t in motion, if it isn’t doing some social good, the fabric that holds us together will only continue to fray and lead to cynicism, resentment, and worse yet, nihilism. We’re already seeing all of it.” Kamath maintained.
“What I am saying is that even if a portion of that wealth were channelled into things that could materially improve lives, that seems worth doing. Hoarding wealth, in the grand scheme of things, doesn’t really help anyone,” he concluded.