Let's Think

Is inequality the ‘big bad wolf’ or the natural order of things?

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Admitting that the “legitimacy of the state seems to be fraying,” the ANC government blames, among other things, the persistence of inequality and poverty, a coupling that is at best counterproductive.

In the recently released discussion documents, (dealt with comprehensively in another article), for its upcoming two-yearly National General Council meeting in October, the party blames the fraying of the state on the “weakening sense of hope and optimism” among the citizens and on the persistence of inequality and poverty – almost as if they were two sides of the same coin.

Reality is, however, a lot more nuanced and extremely more complex than the notion that some people are poor because others are rich.

Let’s pose a few basic questions:

  • Is the state fraying because some people are rich and others are poor, or because the poor are losing “hope and optimism”?
  • How should equality be achieved and where does the responsibility reside to achieve such equality?
  • Should the outcomes of effort always be equal, irrespective of the nature of the economic or labour input?
  • Has there ever been a society at any time anywhere on earth where utopian equality existed?
  •  Is South Africa the only place on earth where inequality is presently a problem?

Some answers

Now, let’s try to answer some of these questions – back to front from how they are posed above:

Firstly: While most commentators on the subject often claim that South Africa is one of the most unequal societies in the world, Branko Milanovic, a senior scholar with the Luxembourg Income Survey now at the City University of New York’s Graduate Center, in December last year stated that across the globe inequality within nations is increasing.

This statement came after he had conducted the world’s most rigorous research on global income inequality.

The claim about South Africa’s inequality is also based on very tenuous evidence, as Inequality.org, project of the Institute for Policy Studies, states on its website: “Tracking levels of world inequality can pose a variety of statistical challenges for researchers. Different nations, for starters, tally income and wealth in different ways, and some nations barely tally reliable stats at all.”

A lot also depends on what is compared to what. In the case of the average income of CEOs of corporations compared to the average income of employees, it would appear as if South Africa does better, or less bad, if you want, than the United States.

According to a 2014 report by Mergence Investment Managers, South Africa sits with the 5th biggest average pay gap in the world, after the USA (1st), Hong Kong (2nd), Germany (3rd) and the UK (4th).

But one could also take the view that the biggest economic inequality in society is between those in employment and the unemployed. From that base, despite rising unemployment also over there, South Africa is not nearly in the same league as the US.

It does, however, also suggest that the first order of business for South Africa to create a “sense of hope and optimism” for the country’s poor, is to get as many of them as possible into employment. And, by doing that, allowing them to get one foot on the ladder of upward mobility.

And, just as a side note, President Jacob Zuma’s salary, the third highest for a head of state in Africa, is 22 times more than that of the average citizen.

Secondly: The idea that everyone in society, in every sense of the word, can be equal, is to aim for the impossible – for something that has never existed at any stage in the history of mankind anywhere in the world. It is a simple fact of life that not everyone is born with the same talents, intellect, abilities and potential.

This reality suggests that the aim should be to ensure, as much as possible, that everyone enjoys equality in opportunity to develop to their given potential.

Thirdly: Against this background it is a fact of life that there will always be leaders and managers and that there will always be followers and workers, with tasks and responsibilities that are not equal in value and therefore also not equal in terms of reward for the toil each invests.

To remove that ‘inequality’, would leave the most talented in society without the incentive to develop their potential to the full – something that is vital to the greater good and the development of society as a whole, including to those of lesser potential.

Fourthly: As we have now established, the only equality possible in society is one of opportunity.

We would suggest that to create that equality is a responsibility to be shared by society as a whole, but particularly by those in leadership positions in government, business and civil society formations.

It is organised civil society’s job to act as the conscience of the nation and to ensure that we collectively fulfil the duty to care for one another.

Business has a special interest to ensure that the “hope and optimism” of the majority, and especially the poor and less fortunate, are kept alive. Without that, there will not be the peace and social stability that they, and everyone else, need to prosper and sleep peacefully.

But the most important responsibility lies with government to act as facilitator to ensure that there is equality of opportunity and to prevent exploitation of, especially, the more vulnerable in society by laying down the required rules and regulations, without taking over functions or activities that can best be executed by other formations in society.

And, above all, it should ensure that it empowers citizens to realise their full potential by providing services like quality education, proper facilitating infrastructure for development and the establishment of quality settlement areas.

Fifthly: One has to conclude that the state in South Africa is presently fraying, because such large numbers of people have indeed lost hope and their desperation and frustration are showing in violent protests, which seem to be on the up again. A collective state of depression is clearly present in South African society.

It will not be easy to undo, but the dividing lines between state institutions and political party, which have become totally blurred over the last two decades, urgently need to be redrawn if we are to prevent the “fraying of the state” from becoming a full-scale revolution.

That is a subject not only worth, but in need of, detailed attention at another time.

by Piet Coetzer

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