BOOK EXTRACT | Bruce Whitfield: South Africa isn’t just unequal – it’s unfair

South Africa is a fundamentally unfair country. You can call it unequal if you want but that doesn’t quite cover it. Unfair is a better descriptor. Not ‘unfair’, as when a child is admonished for something bad that a sibling did; but ‘unfair’ in the dictionary sense: ‘not based on or behaving according to the principles of equality and justice’. Synonyms include words like ‘unjust’ or ‘inequitable’.

Why those words are better ways of describing the huge disparities that exist in South Africa is that the moment you change the way you think about a problem, the more you are obliged to do something about it. Describing a society as ‘unequal’ implies that it’s a fact of life, that there’s nothing that can be done about it. Inequality has always existed. It’s a fact of life everywhere. All societies have an elite.

In most cases that elite is multi-generational and wealth is handed down through the ages. You can resign yourself to the inevitability that some people are just born lucky. The moment you look at the economics of a country like South Africa and describe it as ‘unfair’ or ‘unjust’, the conversation is changed. You may not be able to fix inequality, but you can surely take steps to ensure a fairer society.

In many respects, that’s what several ANC administrations have sought to do through numerous policy interventions since 1994. There has been some progress but not nearly enough, primarily because policy interventions have been made at the expense of the rich rather than through a pro-growth economic policy which would have lifted far more people out of the depths of financial despair.

The introduction of social grants was a first step in ensuring the country’s poorest citizens were given a chance of survival. The expansion of public health care and schooling was intended to ensure that even the poorest in society would be able to gain access to the basic services any country should supply its citizens. However, the government has done a really bad job at ensuring those services are the best they could be.

If you run a business or are employed in a job that gives you disposable income, you immediately have more choices than the poorest 80{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} of the country. The mere fact that you have a job puts you in an elite club, and if you have medical aid and a company pension scheme thrown into the mix, you are winning, regardless of how you feel about your personal circumstances at this moment.

Medical aid gives one access to some of the best hospitals in the world, and, depending on how much you earn, your children can attend some of the best schools on the continent. Through a subscription to a private security service you are better protected than those who have to rely on the overstretched policy. The private-security sector employs more than three times as many people as there are in the police force.

Privilege thus buys security, education, health and lifestyle whereas most people in the country have to rely on the state. Other than a few pockets of excellence, the state is failing miserably and exacerbating the already significant divides.

To suggest that there has been no change in inequality over the last quarter of a century is not true. A report by Stats SA on economic indicators between 2006 and 2015 concluded that inequality is extremely high and has remained so since 1993. Both conclusions are correct, but they imply there has been no change.

The economist Brian Kantor points out that in 2006 the top 10{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} of earners in South Africa made 12.5 times more than the bottom 40{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}. By 2015 that ratio had declined to 10.2. No one is suggesting for a moment that the inequality levels in South Africa are acceptable. But we do need to acknowledge that there has been an improvement largely as a result of the country’s progressive tax system and the redistribution of some of that wealth by means of the social grants system, which has lifted millions out of abject poverty.

Without growth to keep the cash flows running, that mechanism of distribution is, however, rapidly running out of steam. The only way to truly tackle inequality is to generate economic growth, which creates jobs, brings more people into the working class, and helps established households migrate into the middle-income segment. There is no magic wand.

The above is an extract from Bruce Whitfield’s new book The Upside of Down, published by Pan Macmillan. Views expressed are the author’s own. 

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