Property & Wealth

Wealth gap debate – some balance called for

Christo Wiese, advocate for the wealthy
Wiese.jpg

Globally, and especially domestically, the inequality gap in wealth distribution has become a hot subject of public discourse – mostly one-side and maybe it is time for some balance.

The recent report by United Kingdom based NGO Oxfam titled “Even it up: Time to end extreme inequality,” for instance claimed that the  total net wealth of just three billionaires in SA is equivalent to that of the bottom 50% of country's population.

According to the report, inequality in South Africa is now worse than it has been during the days of apartheid.

This report, and other similar reports, have been setting the tone of the public narrative on the subject for some time now.

It was for instance recently widely reported how the previous Public Protector, Thuli Madonsela, referred to the Oxfam report during an appearance at the Cape Town Press Club.

In a wider context we, almost three year ago, reported how “the perpetual growth in inequality within societies,” has become the greatest threat to the political economic construct of the developed world.

Hear the other side

However, since the report’s release, and the initial media hype about the extent to which wealth gap has grown, some commentators have accused Oxfam of being less than honest in their dealing with available statistics.

Other have argued that Oxfam’s “obsession” with wealth and inequality is counterproductive and that inequality is not really the problem, but rather poverty.

This line of argument did not get nearly the same amount of exposure as the original Oxfam report.

In the spirit of the legal premise of 'audi alterem partem,' we believe it is important to also hear the other side.

As its ‘advocate’ we have chosen one of the three members of that ‘club of billionaires,’ claimed to have wealth equivalent to 50% of South Africa’s population, Christo Wiese.

In a recent address at the FW de Klerk Foundation's Conference on the Constitution and Good Governance, he came out with guns blazing against what he calls a “a perverse obsession about the rich.”

He questioned why the media single out the top successful people in the business community for criticism while the super wealth of international actors, writers, and sports stars is off the radar?

In his view, the media is basing ‘sensationalist conclusions’ on what he calls, “dubious assumptions.”

Firstly, he points out that the so-called rich list and the rankings, keep changing over time, which points to the fickle and often dubious distinction of being rated among the mega-rich. 

Secondly, he challenges some of the stark conclusions (or myths) drawn against the rich:

  • a closer look at the share ownership on the Johannesburg Stock Exchange (JSE) supports the conclusion that the Public Investment Corporation (PIC), of which black civil servants are the largest shareholder component, is the largest shareholder on the JSE;
  • half of new property title deed holders are black, as are new business owners, vehicle buyers, and insurance policy holders; and
  • that some six million black people (more than the entire white population), earn middle-class incomes which, they had achieved on their own steam.

So, in his view, it is irresponsible to claim that so-called "white monopoly capital" is the cause of South Africa's economic and social ills. The real problem is poverty, not wealth.

He is also curious about why the criticism of wealth is mostly directed against people who supply goods and services on a large scale and by doing so employ many thousands of people in the process. At the same time, no one is suggesting that these people made their money unfairly or at the cost of anyone else!

In his view, much of the criticism is baseless and founded on innuendo and emotion, and not, as they should be, on well-researched information that can be backed up.

This negativity is usually used to justify further unsubstantiated claims for a more equitable and so-called just distribution of wealth.

In the case of land ownership, a highly-charged subject, it is often and mistakenly, claimed that to achieve equity, individual wealth and land should be seized and redistributed without fair compensation. 

He cautioned that this approach will discourage long-term investors from keeping their money in South Africa with potentially disastrous consequences for our currency and for the economy. He argues that when big business prospers, everyone prospers.

Another disturbing trend is the move away from the rule of law towards the rule by lawyers where many issues are referred to a sector Ombud or to a commission of inquiry instead of relying on the collective expertise of the courts and judiciary to resolve conflict and find solutions.

In his view, it is trite that you cannot help the poor by destroying the rich. The government should avoid using that kind of emotive language and instead formulate its policies based on facts.

Unfounded rhetoric, like leaders saying that the rate of transformation is too slow or that white people own everything, should be viewed as dangerous and replaced with well analysed and researched commentary.

Other side of the coin

It is interesting to, in the context of land ownership and its facilitating role to integrate previously excluded black people in the formal economy, to note what has been happening on the front of residential property.

According to a recent report, municipal governments own upwards of five-million urban plots currently occupied by previously disadvantaged individuals.

“Many of these individuals, denied in the past the right to own any property under the apartheid system, have lived on these properties for their entire lives. The problem with this state of affairs is that 22 years after the end of apartheid, these individuals are still accepted as being mere tenants rather than property owners,” the report states.

One the other hand, Wiese has been instrumental in facilitating projects of the Free Market Foundation like the Khaya Lam (My Home) project in Cape Town, assisting inhabitants of council-owned property gaining freehold ownership of the property they live on.

Maybe people like Wiese have reason to feel aggrieved and maybe especially government should rather join hands with captains of private enterprise to find solutions to alleviate poverty, rather than using them as scapegoats for their own failings.

 

Also Read: Black South Africans can learn much from Afrikaners

by Eve van Basten

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