Zoho’s Sridhar Vembu warns wealth inequality fuels 'social collapse'—reveals 5 stark choices societies face

Zoho Corp founder and chief scientist Sridhar Vembu on Thursday warned that "making money on money" schemes amid wealth inequality are the symptoms of “social collapse” and “decay”.

“When a few people have a lot of wealth and lots of people have nothing, these are the 5 choices societies make, and we see examples of these around the world,” Vembu said in a post on X.

Vembu highlighted 5 choices that societies make:

1. The people with wealth create employment and develop skills in the broader population.

2. The people with wealth donate to causes that indirectly create employment.

3. Governments tax the wealthy and redistribute to the needy, with varying degrees of corruption or leakages along the way.

4. Extortion networks arise that extort from the wealthy and they find enough people willing to do this work and this begets 5 below.

5. The wealthy employ vast security forces to resist being extorted.

“Dharma dictates 1 and 2, with 1 preferable to 2. This is also the Biblical injunction to teach a man how to fish,” said Vembu.

“Many western societies have picked 3 (tax and redistribute that over time leads to corruption). I suspect 3 leads to 4 and 5 over time, so 3 is an unstable equilibrium,” he said.

“4 and 5 are the symptoms of social collapse and decay,” the Zoho founder said.

Vembu said ancient people understood this intuitively and that is why they disapproved of usury and other "making money on money" schemes. "The nature and character of wealth determine and in turn, are determined by the nature of society - yes, it is a self-reinforcing feedback loop,” said Vembu. “What financialism does is to separate wealth from employment, through various schemes of monetary alchemy."

Vembu, who announced his decision to step down as CEO of Zoho earlier this year, now focuses on spearheading research and development initiatives in his new role as Chief Scientist.

Earlier in March, Vembu shared a piece of advice for managers, saying they have to grow a thick skin in order to lead any effort. “A critical question every manager should ask themselves is ‘Can bad news reach me? Would people be comfortable telling me what I don't like to hear?’ Being too sensitive is not a virtue in leaders. It would just mean bad news never reaches you. So one piece of advice I have always given our managers is You have to grow a thick skin in order to lead any effort,” Vembu said.