SHARED PROSPERITY OP-ED
Reducing inequality starts with increasing empathy among all South Africans
To regain the shared sense of hope many South Africans felt when they lined up to vote in 1994, we need to narrow the empathy gap. Right now, we are at a tipping point, and could end up with nothing to gain and nothing to lose.
South Africa has the highest level of income inequality in the world. This is, undeniably, largely because the apartheid regime devastated the social and economic fabric of black people. It made very few investments in the human capital of the majority population, who received little remuneration for their labour. They seldom had opportunities to accumulate any wealth, and the land of many was forcibly redistributed. Apartheid also left many other deep wounds.
In 1994, however, there was a palpable sense of optimism that there would be shared prosperity. Sadly, in the intervening years, this optimism has turned into despair. The living standards of the majority of the white population have improved markedly. However, most of the black and coloured populations have made few economic gains. It appears many white people believe this is because of poor governance. How is it possible that the white population benefited so much, then, despite poor governance? Similarly, why has much of their new wealth been accumulated from the poorly paid labour of many black people?
Although I know very little about economics, from what I have read, the current policy prescriptions to address persistent inequality, in addition to tackling corruption, generally take two forms. The “right” argue that we should implement more business-friendly policies, including revising labour regulations. The “left” argue we should forcibly redistribute resources, by various means, from white people to the poor. Sadly, it seems unlikely to me that either of these “extreme” approaches will reduce inequality any time soon.
We have no evidence that either approach would be successful, although this also implies that they are both valid options until proven otherwise. To work, though, they would both surely require a radical overhaul of the education system. Currently, many of the poor can barely read and, consequently, can’t realise significant gains from capital.
We are fortunate to have a vibrant discourse on the challenges we have to confront. One seldom encounters people acknowledging the views of one side, and then suggesting ideas that may improve these remedies. This is odd because, with some creativity, it is possible to imagine a scenario where elements of business-friendly and forced redistribution policies coexist, even if this is hard to imagine. One of the main challenges to finding common ground is an empathy gap.
Empathy requires you to understand why another person has particular feelings. Consider what it must be like for millions of young people who know they have no hope of ever finding decent employment, even though they are better educated, on paper, than older generations. Consider what it must feel like to have no purpose in life. How would you feel if you were living in a small room that you shared with many others, especially when many white people have large homes with high walls and private security, so that crime disproportionately affects the poor?
On the other hand, consider what it must be like for a white person who has inherited the family business. There is no certainty that the business will continue to succeed. The business owner has had to sacrifice an enormous part of her life to keep it running. Even if she is wealthy, she could lose it all. She is also responsible for the livelihoods of her employees and has paid over a considerable proportion of her profits to the taxman. She often lies awake at night worrying. Many business people, regardless of their race, can relate to the fear of losing their businesses.
It is very difficult to feel empathy for someone else when you have no idea what feelings they are likely to experience. The problems of the wealthy are, certainly, far less severe than those of the poor. Hunger is, arguably, the most pressing concern that requires our empathy. In this regard, there are many privileged people who provide support to the poor. Yet others argue that their taxes, which are meant to assist the poor, have been captured.
Is it possible to empathise with corrupt public servants? Consider the case of a public servant who selects candidates for loans, as part of a programme to assist poor black entrepreneurs. He has a scheme to receive kickbacks. This ensures less-deserving candidates receive the loans. Why does he feel the need to steal? Perhaps he is responsible for supporting members of his extended family who are as poor. He may also believe that the loans will not generally be repaid, even when beneficiaries have the means to do so. We cannot condone his actions, though, even if we empathise.
Corruption is not restricted to public servants and can be viewed in broader terms.
It is mystifying that Grade 1 teachers with university degrees cannot teach their pupils how to read. However, many pupils have no exposure to books at home, nobody to help them with their homework, and no extra classes. In such cases, teachers may feel despondent, when they have very large classes of pupils who all require individual attention. They may not have received training to handle these conditions. Taking days off may be the only way they are, psychologically, able to persist with their lost cause.
Conversely, when teachers demand excessive wage increases they are, ironically, making it even more difficult to teach – because there is less money for textbooks, training or school infrastructure. Evidently, they are unable to empathise with the poor. This is when we may feel empathy for policymakers. Imagine how difficult it must be to balance the competing demands of public servants, the private sector and the poor.
A key challenge that policymakers have is that they cannot simply pass on more severe challenges to future generations. The only scenario where it makes sense to take on more debt is if we are confident that this will lead to sufficient growth to pay off this debt. Yet if we don’t help the poor now, we are likely to experience pushback that increases uncertainty.
It is entirely likely that the wealthy would be willing to pay more taxes if this reduces inequality through economic growth. Thus far, nothing we have attempted has worked. However, they fear that, without sufficient human capital, forced redistribution may exacerbate inequality.
To understand forced redistribution, we need to empathise with the proponents of this approach. Consider the enigmatic commander-in-chief of a prominent political party, who is exceptionally intelligent and charming, and a brilliant leader. He was raised by a single mother and experienced considerable deprivation and racism. To him, forced redistribution represents an opportunity to stand up for the African majority.
Why does redistribution resonate with his constituents? If I were in their position, I would be filled with rage. I would primarily blame the white population. I would want to overthrow the government. Challenging the status quo would give me a sense of purpose. I would also be part of a team that provides me with camaraderie and pride. The commander-in-chief has achieved all of this. His passion to effect change should be commended. To him, forced redistribution appears to be the only viable approach to immediately tackling the legacy of apartheid.
Why is it not possible to institute a legal system that reverses inequality in the same way that the apartheid legal system reduced inequality among whites? Unfortunately, apartheid benefited a minority with more wealth and acquired human capital that subjugated a majority with less wealth and acquired human capital. There are reasonable arguments that this approach may not work the other way round at this stage. Can the proponents of both forced redistribution and business-friendly approaches find a way to empathise with each other?
Ideally, we would find testing grounds for both approaches. It may, for example, be time for a state bank as well as more business-friendly zones that are located near to townships. Perhaps we can ask the wealthy to set aside some of the land they own that once belonged to black people, for the poor, in a manner that, with their help, leads to large returns. Perhaps it is time to ask the poor to recognise the role that the private sector plays in providing social protection. Perhaps it is time to give more poor workers a stake in the ownership of the businesses they work for. Perhaps it is time to peg salary increases for the better off, including public servants, to economic growth.
There are many ways in which we can be innovative if we truly relate to the emotions that both the poor and the rich feel. Consider a scenario where the proponents of redistribution acknowledge the role of business in economic development. Similarly, consider a scenario where business acknowledges the need to provide the poor with the land, capital and training they need, and that the government cannot afford, for a big push out of the poverty trap. There are no reasons, yet, that empathy cannot be an acceptable alternative that gains the support of many South Africans.
Even if we are unable to reduce inequality for generations, narrowing the empathy gap may increase the wellbeing of most of the population in the interim. The beliefs and actions of Nelson Mandela and other brave people who made unimaginable sacrifices to overcome apartheid, reflect a commitment to empathy. If some leaders are not willing to engage through empathy, perhaps most of the population will turn to leaders who are. We are at the tipping point, where we may irreversibly all end up with nothing to gain and nothing to lose. We need to act immediately. If we succeed in narrowing the empathy gap, we may feel how many felt, in 1994, when the majority of South Africans lined up for a shared sense of hope. DM168
Dr Gareth Roberts is a lecturer in the School of Economics and Finance at the University of the Witwatersrand.
This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.