The inequality bells are ringing again
In an article for the Daily Maverick (26 July 2017) Professor Ben Turok calls for more information regarding the wealthy in South Africa. We are all quite aware of the repeated calls of experts, analysts, and academics for inequality to be addressed, that it is the most pressing issue of our time. I agree. It does need to be resolved. It needs to be resolved because experts and respected figures such as Thomas Piketty, Christine Lagarde and Professor Turok repeatedly hammer the message that inequality is caused by one group forcibly taking from others. With this narrative being drilled into us, it should come as no surprise when social tensions rise and violence occurs.
Why is wealth inequality such a pressing moral problem? As in many other pieces by other authors, Professor Turok offers no explanation – it is merely accepted as fact. If I were to accept the line of argument offered here, I would have to accept the premise that wealth is fixed, that it is communally produced, and that a certain group forcibly takes the biggest slice of the wealth pie. Fortunately, for every one of us, wealth is not fixed – the wealth of individuals is constantly shifting as they make their individual choices and try to live their lives as they deem best.
The statistics Professor Turok provides show wealth inequality in South Africa, and are just that – statistics. They have no moral content. It is flippant to infer that wealth has been accrued because it was stolen from others. Wealth is the result of man’s mind at work. A person looked at the world around them, weighed up the threats and opportunities present, evaluated their talents, abilities, time and resources available, formulated how they could best be used to improve his life, and then acted on their vision. This is a moral process because it is up to each one of us to use our minds to survive and thrive in this world.
If wealth was gained because of force or fraud used against others, then the burden of proof rests on Professor Turok and the others who agree with his view. Any charge that a person has become wealthy because of theft or fraud must be taken very seriously because South Africa is supposed to be a country based on democracy and equality before the law. If there is no evidence that the accused person became wealthy through immoral means, then any such charge falls flat. The shift from ‘that person has wealth’ to ‘therefore they must be a criminal’ is a shocking weakness in reasoning.
Do we think so little of people that we want government to run our lives? Through myriad legislations, stifling interventions and controlling minimum wage edicts, government removes the agency and dignity of people who should be free after decades of colonialism and apartheid. Freedom does not mean handouts; it means that anyone can try, to the best of their ability, to better their life in ways no government bureaucrat or ivory-tower academic could even imagine. It means that they can engage in business with others and improve their life, and, by doing so, increase the inequality that separates them from those who have not worked equally as hard. What kind of person could deny this ideal?
In the article by Professor Turok, the case of the Guptas is the only example of inequality that is immoral. Through pay-offs, underhand dealings and fraud which all of this exemplifies, the Guptas bought their way into the corridors of power. They did not compete with anyone on an open market. They negated all attempts at open competition by using fraud to buy their influence and in so doing they have entrenched the kind of inequality that must be exposed and punished. For inequality critics to try and equate businessmen who voluntarily trade with others, with people who use shady political dealings and fraud to improve their standing, is dishonest and, seemingly, merely a means to score political points.
Inequality in the economy is the result of people succeeding at providing goods and services needed and desired by others. To trade with another, you have to appeal to their reason. You cannot force another person to buy your goods – you have to make the best possible case to convince them of the value they will gain by trading with you.
With the rise of the ‘app economy’, even more inequality will develop in the years to come. Already, more and more people are moving away from traditional means of employment and benefitting from more sources of income. The result is, and increasingly will be, that they are earning more money than before. My most fervent hope is that, hopefully, government will realise that its mandate is not to run people’s lives; that it will step back, cut regulations and allow people to trade voluntarily, honestly and freely with each other.
Author Chris Hattingh is a researcher at the Free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.
Chris Hattingh is Deputy Director at the Free Market Foundation. He sits on the Foundation's Executive Committee and Health Policy Unit. He is a member of the advisory council of the Initiative for African Trade and Prosperity, as well as a Senior Fellow at African Liberty.
Publish date: 08 August 2017
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.