Our house was built on sand
The most recent New Frame, New Economy forum shows that expecting individuals to shoulder the responsibility for overcoming inequality is futile. An effective solution to mass impoverishment can on…
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21 May 2021
The elite public sphere in South Africa has an almost monomaniacal obsession with corruption. It is, of course, an issue of the utmost importance, and a social pathology that has the most devastating impact on people unable to afford to meet their needs through the market.
But when we speak about corruption as if our broader economic and social systems would be adequate to our challenges if they were run with efficiency and integrity, we make a serious mistake.
There is another crisis that we need to put at the centre of our public deliberation and political organising, and that is the crisis of mass impoverishment and grotesque inequality. Even if we could overcome the crisis of endemic corruption, South Africa would still be what Frantz Fanon called “a non-viable society, a society to be replaced”.
Our economy was built on a system of violent dispossession and exploitation. The process of impoverishing African people began when European colonialism conquered successive polities and then appropriated land and livestock. It continued when mining capitalists turned the countryside, here and in the region, into reserves of cheap migrant labour. It was further entrenched when legislation excluded Black people from participation in the professions and many other areas of economic life. It was built into the concrete structure of urban life when white minority rule built Black ghettos on the fringes of our cities.
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When the ANC came to power in 1994, it was widely assumed that time would now be on the side of the oppressed. It was thought that, slowly, there would be progress to a more just order. But as American academic Ian Baucum says, there are circumstances in which “time does not pass or progress, it accumulates”. More than a quarter of a century after the end of formal apartheid, it is clear that in South Africa history is not solely in the past, that it continues to constitute, structure and suffocate the present.
The governments democratically elected since 1994 have made no real attempt to undo mass impoverishment. If the modern South African economy is a product of the structural inhumanity that preceded democracy, it is now also a testament to the dearth of social solidarity that has shaped the country after it. And whatever may have changed since 1994, inequality has not.
Where comparable levels of inequality in Latin America were dealt decisive blows by redistributive policies crafted by progressive governments in the interests of impoverished people, the South African economy was liberalised, and workers and other impoverished people were made to look on while small economic and political elites ran away with the spoils. While the incomes of the bottom 95% have mostly stagnated over the past decade, those of the top 5% have grown at more than double the rate of the economy.
This is not only a system of elite accumulation at the expense of the majority, it is also a system upheld with the routine use of violent state repression. The state regularly sends men with guns to evict residents from land occupations. The police shoot and kill impoverished people blockading roads behind burning tyres with grim regularity.
What is, and what should be
Inequality does not go entirely unnoticed by policy makers. Freshly mooted legislation that might see greater decision-making power for workers and the pay gaps between bosses and workers further exposed is an encouraging if small step. Unlike our economic inequality, however, these measures already exist elsewhere in the world. And addressing unprecedented inequality will demand an unprecedented restructuring of the economy.
Our efforts to undo inequality must begin in concrete conditions of life in South Africa. Because 42% of the population is chronically impoverished, the concrete condition of life for four in every 10 people is poverty, and will remain poverty. Another one in every 10 is falling in and out of poverty all the time, while two in every 10 are at risk of it. That leaves only three out of 10 people who belong to either a stable middle or elite class.
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Ultimately, change will be the responsibility of those whose dignity and life chances the South African economy has most deeply betrayed. It is the self-organisation of the oppressed that, time and again, has built the forms of popular progressive power required to change economic realities in the interests of the majority.
An effective solution to mass impoverishment can only be political. Profound change will require a substantial rebalance of political forces. But there are some useful technical interventions that could go some way towards democratising the economy we have if existing progressive forces rally behind them. As the forum on inequality we published this week makes clear, an important terrain in the battle for a more equal economy is the country’s tax regime.
Transformation in South Africa always comes up against the rub of state capacity, and the capabilities of the country’s revenue service to oversee a progressive new tax regime is questionable. Nevertheless, the wealthiest are not earning their money, they are making it. The data are unambiguous on this point: those at the top do not derive their incomes from work but from financial assets, pension funds, housing and other forms of wealth.
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And yet, liberal impulses that leave the structure of the economy untouched continue to dominate the policy landscape. Equipping individuals to better take part in the economy, so the thinking goes, will address the inequalities that characterise it. But as our forum makes clear once more, educational interventions will make little difference until the broader structure of the labour market is radically remade. It won’t matter how educated our workers are until there are enough jobs for them.
Despite the institutions most culpable of using neoclassical economic principles to make an unequal world – the World Bank and the International Monetary Fund – now acknowledging the ravages and nonviability of inequality, the responsibilities for structural problems continue to be shifted on to the shoulders of individuals.
In this crisis, engaging the battle of ideas with rigorous commitment to a better future is an urgent imperative.
