Opinionista Marelise Van Der Merwe 29 January 2014

The wealth gap and inequality can and should be fixed

In his column dated 27 January, Johann Redelinghuys argues that economic inequality is part of the natural order of things, and that attempts to fix it are, essentially, a waste of time and resources. He is wrong on every level: morally, practically and factually.

Let’s take the factual level first. In essence, Redelinghuys argues that “individual differences and inequality are clearly established elements in the natural order of things” and that they are “the predictable outcomes of the capitalist economic system which most of the world now subscribes to”. Crucially, he mentions neither the degree of inequality nor the way that it got there, which I would argue is central to the discussion. Certainly, a degree of difference is arguably natural; but glaring or crippling inequality, especially if it got there by unnatural means, is not.

I’m not attacking capitalism. I have no interest in a socialism-vs.-capitalism standoff, which I believe to be unnecessary, since unlike Redelinghuys, I don’t believe gross inequality to be an inevitable or “predictable outcome” of the capitalist system. I believe it is possible to be both capitalists and decent human beings. My problem is not the system. It’s Redelinghuys’ interpretation that the system necessarily has to breed such gross injustice – and that we should all just accept it with a smile. Certainly it is natural that in a capitalist system you are going to have some people who will be more successful or wealthier than others. I don’t think anybody is arguing against that. But that does not mean we cannot draw a line in the sand against exploitation or truly gross injustice.

“Not everyone has the drive or ambition or talent to get rich or even to maintain a comfortable standard of living,” Redelinghuys begins. “Just like we don’t all have great sporting talent or musical ability… We look around and see big natural differences and great inequality all round us. There are obviously major differences in intellect, and in physical ability, but we don’t fret about closing the IQ-gap, or the golf-handicap-gap.”

Now, there are a number of issues to address here. Firstly, Redelinghuys assumes that it always takes great drive or ambition or talent to get rich or to maintain a comfortable standard of living. One only has to watch a couple of reality shows or Paris Hilton’s sex video or – God forbid – glance through the plot of Kim Kardashian’s upcoming novel – to be disabused of that notion. Stupid and lazy people get rich and famous every day; and what’s more, other stupid and lazy people stay rich just because their parents are rich, and that, too, happens every day. In fact, if your parents are well-off, it’s actually rather hard to end up poor. You have to be pretty motivated to fall off the wagon. Especially in South Africa, if you’re white and have money, you can be a drunk moron flunking on the bones of your ass for most of high school and as long as our marvellous education system pushes you through matric you can probably get into some kind of college and blubber your way into a job. Unemployment statistics, after all, are still divided by race, and not by IQ or inclination.

Mr Redelinghuys, it seems, you are still labouring under the misconception that we are living under the fool’s-paradise definition of a free market, where everyone can actually make the same living and has the same opportunities. It’s quaint. It’s almost like you didn’t grow up in Apartheid South Africa or colonised Africa. But there are libraries full of books about how the continent was raped for generations by richer economies for its resources and it is now in a deep financial hole, relying on those same abusers to get back out, so I can’t understand why you are burying your head in the sand and insisting all it takes is brains and guts. It’s almost like you’ve never heard of exploitation, which would be an endearing kind of idealism if it weren’t so darn weird.

Another crucial issue is that there’s rather a massive difference between inequality in your basic human rights and inequality in your golf handicap. It’s telling that of all the inequalities that you could have picked, you chose that one: one that would make you as a writer seem critically out of touch, in a country where most people have to feed a whole family for a week on less than the price of a bag of golf balls. No, those “inequalities” are not quite the same, Mr Redelinghuys; they are not really comparable. Not being able to eat or having to swim in your own poo is a bit different to having a poorer golf handicap.

There is a difference between “disparity” and “glaring injustice”. No, I am not, as much as I try, as good an athlete as my running partner, who despite being a heavy smoker and drinker leaves me in the dust with my wobbling belly no matter how many times I finish all my spinach. But this, if I may put it rather theatrically, is an act of God; a difference between us and how we were made, and I can live with it. It is not a man-made injustice that was created in our circumstances and further enforced – deepened – through other man-made behaviours. Furthermore, it does not actually impact on our basic human rights or dignity*.

“Why rich people are rich and poor people are poor is not rocket science. Rich people generally are smarter, think more clearly and invest more wisely; they manage their lives more profitably,” Redelinghuys continues. “Some billionaires started from nothing, but had the drive and the ambition to make good.” This statement is particularly offensive in a country like South Africa, having as it does the subtext that the poor are poor because they are stupid and lazy. It is, Mr Redelinghuys, not the kind of statement you should make lightly. By your rationale, Justin Bieber is smarter than you are, and considering both his hairstyle and the fact that he’s in jail right now, that concerns me deeply. If it is true, I suggest we all just lie down and die right now.

Moreover, while I grant that there are billionaires who started from nothing and that they deserve the utmost respect, statistically it has been proven over and over that for the overwhelming majority of people, the circumstances of their birth have a powerful influence on where they end up. If you are born to a rich family, it is much easier to stay rich; if you are born poor, it is much more likely you will stay poor. It is not so easy to break out of a cycle, for better or worse. Research on intergenerational poverty cites such nuanced factors as nutrition, community support and relationships with elders in the family as having an impact on whether a child is able to raise his or her income level in future; there are also other environmental factors such as the education level of his/her parents and the support he/she receives at school. Not to mention whether he/she is exposed to violence or not, or HIV/Aids and other diseases. Child labour and child- or elder-headed households also have an impact on a child’s success at education and later finding a high-paying job or being educated about managing money. So please, Mr Redelinghuys, keep that judgement in check. It appears ignorant and does your argument no favours. There are people who “rise above”, yes, but the reality is that they have to work a million times harder than their privileged counterparts. It is not just about whether they are layabouts or not. That is what inequality means. It means you have to be exceptional to achieve what someone else, who is simply average or fairly good, can do quite easily – and if you don’t manage it, you are not necessarily a slouch.

“The world would be a different place if we could decrease the extremes at either end of the bell-curve and settle everyone in the middle. There would be no gap and everyone would be comfortably ‘average’. Wasn’t that what communism was all about; common ownership of the means of production with everyone sharing in everything?” Redelinghuys writes.

Well, no, I would answer, because Redelinghuys is failing to see any happy medium between taking the Gini coefficient to the max and Communism; he is not seeing a desirable state in which perhaps the degree of inequality is not so staggeringly unfair and yet a capitalist system still works; in fact, it works better. It’s no secret that too-glaring inequality can cripple economies; put simply, when nobody except the elites have money, there’s nobody to spend anything and everything goes kaput. One does not have to have a world in which the richest 85 people in the world are worth more than the poorest 3.5 billion and lean back in your easy chair – which, of course, if you are Redelinghuys, you believe you can afford because you are more intelligent and invest better – and think all is right with the world. We need a growing middle class, not just in South Africa but all over the world, and it’s not just a humanitarian and morally sound investment of our time and resources. It makes economic sense too. It beggars belief that Redelinghuys can dismiss growing inequality as a naturally occurring phenomenon and wash his hands of it both morally and financially. It is a crippling problem with an incalculable human and economic cost.

Redelinghuys goes on to point out that “[p]overty seems to be endemic in some societies. That great bastion of democratic capitalism, the United States, has its own under-class of poor people despite the fact that they live in a country of apparently boundless opportunity. If the wealth gap cannot be closed in well-endowed America, what chance would there be for others?”

But again, he seems to be misunderstanding the core issue. Actually, it turns out the US has its poor underbelly because of its super-rich. A recent study by the Political Economy Research Institute of the University of Massachusetts found that the higher the percentage of income earned by the top 10%, the more incomes of those in the middle and bottom of the income distribution actually decreased. As Jason Welker put it, “It’s not just that the rich get richer and the poor get poorer, rather that the rich getting richer makes the poor (and the middle income earners) poorer. This is a breakthrough discovery.” Making the rich richer literally makes the poor poorer. And it’s happening as we speak in the US. Is that “boundless” wealth and opportunity you’re talking about, Mr Redelinghuys? Turns out it’s pretty finite, and it’s a very select few getting their grubby paws on it. It’s not natural, and it can be reversed. (As a related aside, Redelinghuys glibly states that “most wealthy people make charitable contributions”; I would humbly like to request that he provide the reference for this statistic, as well as some details, because last time I checked, most rich people I knew were spending most of their money on yachts and booze. And, of course, wise investments.)

“But can anything really be done about it? Could the rich be encouraged to limit their rich-making and could the poor be taught to live more wisely, thereby closing the gap?” he asks. Honestly, Mr Redelinghuys. This is what you believe is the proposed solution; teaching the poor to live more wisely? In other words, to budget and invest better, as per your formula for being rich? I’m sure if you tell the billions of people living on less than a dollar a day that Allan Gray’s Orbis is doing better than Stanlib’s unit trusts these days, they’ll appreciate it.

Sarcasm aside, though, something actually can be done about it, and this is where I get the most frustrated with your hands-in-the-air attitude, Mr Redelinghuys. As a matter of fact, according to the World Bank, extreme poverty ($1.25/day) has fallen from 52% in 1981 to about 20% in 2010, while the world population increased from 4.5 billion to nearly seven billion. The world has achieved the Millennium Development Goal of halving the rate of extreme poverty of 1990 before 2015. Over 50% of global GDP is generated in 600 urban centres, 400 of which are in emerging markets (200 in China alone). By 2030, the global middle class is expected to grow by 66% – that’s about three billion more consumers. So what exactly do you mean, talking from your armchair, that “it seems to be futile to spend energy and commitment working to close the wealth gap”? Tell that to the people who are actually doing it.

I’ll give you this, Mr Redelinghuys; you make a cursory attempt to seem less out of touch by saying: “What we do have to invest ourselves in, however, is closing the opportunity-gap, especially the gap in educational opportunity. Every child and growing person should have access to a good education.” It’s not enough, though. You cannot close the education gap without simultaneously closing the poverty gap. Please think, Mr Redelinghuys. How are you going to teach a hungry child? How are you going to help a child study at night that lives in a shack with no electricity? How are you going to get time and energy for them to learn when they walk two hours each way and have to look after their seven siblings?

I had the privilege of working previously with an outstanding school in Ottery, Christel House. It’s a private school run entirely on donations and accepts children only on grounds of their financial status. What makes it stand out is its absolutely outstanding results. The reason is its holistic approach. The children are not merely given the “opportunity” and left there. The school actually invests fully in breaking the cycle of poverty once the child is accepted. That is its mission, and it is through that mission that the children are actually able to succeed, and staggering results are achieved – including one child who previously lived out of a trolley becoming the top achiever in matric; and one supposedly learning-disabled child passing with a B-aggregate and Matric exemption after being told he would never make it in a mainstream school. The school dedicates itself to feeding the children properly, getting the parents jobs, helping the families out of dire financial straits and helping the children succeed holistically, because it understands what you do not: it takes more than just intelligence and drive. It takes a village.

Mr Redelinghuys, this is time for the moral interjection, where I have to ask how on earth you became so staggeringly out of touch with your fellow human beings. It is morally repugnant enough that you can stand there and righteously claim people are less fortunate because they are stupider and less industrious, but to stand there and just say “Oh, build a school” without giving thought to the context – really?

You are so desperately clinging to your own flimsy version of the American dream – that we all have an equal chance and that as long as we stick our flag in the right spot, we’ll all have an equal chance at success. Wake up, Mr Redelinghuys, because being that fast asleep in this day and age – and with the problems we have in our world – is just offensive. Some people will make it who do not deserve it, and others who deserve it will not. Life, as you pointed out in your column, is not fair. But it is morally reprehensible to just wash your hands of that fact and bask in your advantages without reaching out to help where you can. There is no cause, ever, to simply accept injustice. DM

* Okay, it impacts on my dignity a little.