Chapter 01
5. ‘He who seeks equity must do equity.’ Explain. 5, Jan.13, Jul.11
State briefly the distinction between Equality and Equity. 5, Jul.08, Jul.06
Equity vs Equality
One of the differences is the fact that equality obviously denotes that everyone is at the same level,
whereas equity, in business parlance, denotes the ownership of the shares of a company. Equality
alludes to the identical apportionment where dealings, values or qualities are concerned. Equity
represents fairness, or what may be termed as the equality of outcomes. This involves factoring in
aspects of the system that have put particular groups at a disadvantage.
An example, which would bring out the principal difference between the two, would be how a turkey may
be carved up at at family’s dinner table. Equality would mean that everybody ‘“ father, mother and children
– would get a piece of the same size. Equity, on the other hand, would mean that they take the sensible
option, and divide it according to their needs, i.e. larger sized pieces for the adult and smaller pieces for
the children.
When we say equity, we refer to the qualities of justness, fairness, impartiality and even handedness.
When we talk about equality, we are talking about equal sharing and exact division.
A perfect example of the practical demonstration of the difference between the two concepts, is the
feminist movement. Now, if women demand they should be treated in the same way as men, that would
not be possible – equality would not be possible – because women and men are different, and cannot be
treated in exactly the same way. However, if they demanded equity in how the world treats them, it would
be a genuine demand, because now they are demanding that they be given the same rights as men have
as human beings. It is equity that is desirable, not sameness.
Once again, in business parlance, equity denotes the value of something. Suppose I bought a laptop for
$500 a year ago, and tried selling it today. It would probably fetch around $250. That is its equity value.
Equality, of course, only means exact distribution. Really the difference between the two alludes to the old
debate about the preference of quality over quantity.
If one were to take a classical example to distinguish between the two concepts, one could go back to the
days of the cold war when the communist block countries tried to practice equality by paying everyone the
same, irrespective of their station in life. The capitalist block, on the other hand, paid according to merit
and productivity. The efficacy of the later approach, is brought out by the subsequent collapse of the
communist order.
Therefore, although seeming to be similar, equity and equality are indeed very different kettles of fish.
Summary:
1. Equality denotes that everyone is at the same level, whereas equity in business parlance denotes the
ownership of the shares of a company.
2. Equity refers to the qualities of justness, fairness, impartiality and even handedness, while equality is
about equal sharing and exact division.
3. Equality equals quantity, whereas equity equals quality.
"Equity is commonly said to "mitigate the rigor of common law", allowing courts to use their discretion and
apply justice in accordance with natural law."
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EL I_GCL 102