Published by The Sunday Times, 10 October 2010
The very rich are a danger to the environment, democracy, economic empowerment and themselves, says David Le Page
Rich people are becoming a luxury we can no longer afford. In fact, rich people are rapidly becoming even more of a danger to themselves. So it’s little wonder that rich people have been queueing up to endorse Cosatu boss Zwelinzima Vavi’s recent call for a tax on the super-rich … oh, but they haven’t. So why should they be? The fact is that all the evidence and experience of other countries that have succeeded in building more sustainable and healthy societies suggests that a class of super-rich people is not part of the solution. Our rich should declare their interests: are they for South Africa, or just for themselves?
Noting October as Social Development Month, the ANC has called for an intensification of the “war on poverty”. Indeed, the government is making efforts to deal with poverty, such as the Community Work Programme now managed from the Department of Co-operative Governance. But to truly deal with our many social afflictions, the government is going to have to get to grips with the effects of our country being host to a class of super-rich people.
What are those effects? There are many social afflictions we associate with poverty that are in fact also afflictions of extreme inequality.
British researchers Richard Wilkinson and Kate Pickett, authors of The Spirit Level, have examined data from across the Organisation for Economic Co-operation and Development. They have found clear links between inequality and health (physical and mental), drug and alcohol abuse, infant mortality, life expectancy, obesity, imprisonment and literacy.
And vitally for South Africa, inequality inhibits social mobility. Surely, if we are serious about black empowerment, we need social mobility? If inequality acts as a brake on social mobility, then inequality must be contained – and there’s only one way to do that: redistribution. The moment redistribution is mentioned, people see Red. Conservatives begin to screech about socialism and communism. Yet some of the world’s most equal societies, such as Japan, are hardly communist. Clearly, it’s possible to achieve great social equality without putting the Little Red Book under the nation’s pillows.
Excessive wealth is also a great danger to democracy. The wealthy buy influence and favours that ordinary people cannot afford. In South Africa, it’s impossible for us to know exactly the extent to which this is the case, but since our political parties refuse to reveal their funders, they’ve obviously got quite a lot to hide, quite apart from recent egregious cases such as the ANC’s investment in Hitachi, an Eskom contractor.
There is also a profound link between the kind of wealth we see in South Africa and environmental degradation. South Africa’s richest all too often derive their wealth from minerals and resources. As we know from the acid mine drainage problems threatening Gauteng and from the revelations of appalling working conditions on marginal mines, this kind of industry destroys as much as it creates.
We have become far too accustomed to our resource-based economy. As Moeletsi Mbeki has observed, “without mineral wealth to redistribute, the government would have to work harder and be more creative to find solutions to unemployment and poverty. Resource wealth makes it possible for the government not to have to put an effort into redeveloping the economy to create more jobs.”
Personal happiness is secure at relatively modest income levels. Additional income beyond what satisfies personal happiness, though, can still buy additional status. And that status-seeking tends, in the early 21st century, to fuel outrageous consumption.
As Wilkinson and Pickett observe, “inequality fuels status competition, individualism and consumerism. It makes it harder to gain public support for policies to reduce global warming” and, by implication, all parallel environmental problems.
The new South Africa is a profoundly status-driven society. Conspicuous consumption is celebrated without restraint. Billboards in downtown Johannesburg now cover whole buildings, companies screeching their slogans ever louder without any thought of public aesthetics. Overseas visitors are often slightly nauseated by “lifestyle” programmes such as Top Billing that celebrate unrestrained consumption in ways that South Africans take entirely for granted. This consumption is driven largely by status-seeking: too many of us are too insecure to rather anchor our self-worth in community and generosity.
How do we redistribute? It’s pretty simple, really. Much higher taxes on the super-rich, tax breaks for co-operative and employee-owned companies, ever more investment in health and education.
In recent years, executive pay levels have skyrocketed far beyond the wealth that has been created. Some CEOs now earn hundreds of times what gets to their least-paid employees, and so we need restrictions on corporate pay ratios. I hear the perennial howls: these measures, especially higher taxes, will scare away foreign investment. Indeed, higher taxes would scare away some international investment – but our greater social stability would likely attract a far better class of investor.
And how would redistribution benefit you, the average suffering rich person struggling with the upkeep on your second and third homes, the costs of servicing three or four expensive cars, and the tedium of having to always be ready to whine about your tax burden? Well, if you really and truly don’t give a damn about having to live behind high walls, about having to pay a fortune to security companies, about never being 100% certain of the physical safety of your family, then it probably won’t benefit you much.
If increasing air pollution, the pollution of rivers, the invisible contamination of fruits and fish, the disappearance of wild and beautiful species, the unquantified likelihood of getting cancer from chemicals whose impacts have never been properly assessed are problems that don’t trouble you, and no God tweaks at your conscience, then, indeed, a more equal society is likely to hold scant appeal.
Of course, it is not only greed and selfishness that motivate people to seek wealth. It is also fear – fear of illness, of poverty, of other people. But a more egalitarian and caring society would leave everyone more secure. The other day, I received a note from a friend who grew up in Dublin, Ireland, and who was visiting her parents. “This is very much how my parents’ house is,” she wrote:”The kettle is always on, someone always stops by, we’ve had pretty much the same neighbours all my life, salt-of-the-earth folk. I cherish how I grew up. There was (is) a deep sense of community here which I missed sorely when I lived where I knew I didn’t belong.”
She is describing the kind of wealth that cannot be measured in rands and cents, the wealth of true community, of a profound sense of shared destiny that simply cannot be forged between people who live in shacks and multimillionaires. This is the wealth we need to build in South Africa. Most of all, if we truly desire to overcome the horrifying levels of rape, murder and robbery that still beset us, then we need to grow up and get past the bling thing. The Spirit Level is subtitled: “Why equality is better for everyone”. That includes the rich.