Poverty alleviation requires afflicted countries to add value to exports to wealthy countries, instead of prioritising inequality
Grievances should constructively inform politics, as fresh options to better align interests flourish alongside today’s highly disruptive changes. Instead, grievances are routinely exploited to stoke political divisions.
While oppression has always featured, our ancestors were threatened more by nature than by humans. Then, rather recently, dying from predation, pestilence or famine became rare and as survival pressures receded, chanting “inequality” became a common political rallying cry.
Whereas we may never know whether the Covid-19 virus came from a lab in Wuhan, irrefutable documentation identifies those who weaponised grievance politics to undermine social cohesion. Since the mid 20th century prominent neo-Marxist intellectuals have sought to have communism displace capitalism and democratic structures. As they could see workers were not going to revolt as Marx expected, they targeted universities and news organisations.
As life for most people became far less threatening in recent decades, the survival pressures that demanded pragmatic community norms faded. Meanwhile, Marxists and other anticapitalists assumed leading roles at universities and within media houses, curating knowledge and information flows. They conditioned societies to see large income differences as power plays reflecting strong groups oppressing the disadvantaged.
Our most affected group is the majority of South Africans who are locked into extreme poverty while political elites feast. Elsewhere, capitalism has flourished, leading to global poverty plunging far further and faster than what was thought possible.
Many criticisms of capitalism are just commercial realities. Consumers will favour sellers who reliably provide good value. Capitalism’s defining feature is private property. Some people are far better than average at managing resources. Rewarding those people for running companies isn’t foolproof, but it minimises poverty while greatly benefiting workers, pensioners and consumers.
That is, it makes everyone better off. However, it does not make everyone equally better off. Life is largely about managing trade-offs, and it makes no sense to make everyone worse off while idealistically expecting that this will reduce inequality.
That Africa’s rapidly rising share of the world’s extreme poverty now exceeds two thirds reflects extraordinary poverty alleviation in Asia alongside much technological and political progress. Such progress would have been vastly slower had many hundreds of millions of Asians not been employed by astute management teams to add value to goods purchased by distant affluent consumers.
High growth can’t be sustained by poor people selling to other poor people. Rapid poverty alleviation requires that high poverty countries add value to exports destined for wealthy countries. In this important sense, inequality advances development.
It is economically irrational for countries with high poverty and unemployment to prioritise inequality. Yet chanting about inequality levers identity politics. This refutes individual merit while disavowing the valid interests of builders and problem solvers by labelling them oppressors.
While pursuing equality can benefit wealthy nations, SA has highlighted its potential to be abused to benefit insiders through patronage politics, which associates ruling elites with a historically disadvantaged group. Our rampant poverty and unemployment have only become more entrenched — as has extreme inequality.
Few countries are in range to challenge SA’s pinnacle position among the world’s most unequal nations. That we have more wealthy blacks than whites represents progress, but it has been achieved largely through the redistribution and localisation policies that support patronage. This has crushed prospects for most “born free” black South Africans.
A youth unemployment rate approaching 30% would trigger a truly formidable response in nearly all countries as it would risk devastating social upheaval while causing a monumental drag on long-term growth. That nearly 60% of SA’s 15 to 24 year olds are unemployed is substantially more threatening than collapsed service delivery or state-owned enterprise failures.
Most of SA’s young adults are being permanently marginalised. Few will somehow become meaningfully employed a decade after leaving school. Yet despite polls indicating unemployment is clearly voters’ top concern, no plans are offered that might noticeably change the grim prospects faced by most young South Africans. Might this help explain the apathy of young would-be voters?
The acclaimed author of A Theory of Justice, John Rawls, questioned whether inequality should be tolerated if it benefited those least well off. Contrast that with three decades of — allegedly affirmative — identity politics having sacrificed growth to prioritise wealth redistribution and race-based hiring criteria.
The result has been more affluent blacks than whites, alongside the world’s highest inequality and youth unemployment. As this just isn’t sustainable, many are justifiably concerned that May 29 could see our last legitimate national election.
The fully legitimate grievances of the majority of South Africans who are poor should be spurring innovative solution paths. Fixing the failures induced by identity politics is a requirement, not a plan.