South Africa saw its most destructive riots in years this past July, ostensibly in response to former President Jacob Zuma’s imprisonment and due to socio-economic factors. The Constitutional Court’s sentencing of Zuma was widely hailed as a victory for the Rule of Law, but the commentariat in many cases remains blissfully unaware of its diagnostic blindspots.
The wine-sipping ivory-tower commentariat has not relented in misidentifying South Africa’s problems (and, by implication, the solutions to our real problems). The key issue they identify remains inequality.
Inequality vs Poverty
Inequality is nothing more than the academification of poverty. It holds that mere difference in levels of wealth is a cause for social concern rather than the lack of wealth found among many. Inequality is concerned with patterns and ratios, formulas and proportions.
Poverty is concerned with the basic needs of real people that are not being serviced.
These phenomena bear no relation: That some have more than others has nothing to do with the fact that some have nothing at all.
Inequality certainly exists, but that fact alone does not make it a problem to be solved. There will always be inequality: due to choices and due to (even unfair) circumstances, such as South Africa’s history. Once we try to ‘solve’ this ‘problem’, we will end up with more of the very thing that is the real problem we should be focusing on: poverty, the real evil caused by historical oppression.
The usual remedies for solving inequality are the very things that exacerbate poverty. That is why we must not misdiagnose the social issue at hand.
Higher taxes are slated as a solution to inequality. But these take money out of hardworking South Africans’ pockets and give it to an incompetent and corrupt government. Lower taxes is a solution to poverty, leaving the money where it belongs. This enables those on the margins to put their children in better schools, to acquire medical aid, to save and invest.
Land redistribution is regarded as a solution to inequality. Land is confiscated from some and then, owned by the government, leased out to others. This disincentivises property investment and generally leads to poor agricultural outcomes. Land restitution and titling, on the other hand, are solutions to poverty. Here, land that belongs to identifiable people is returned to them in ownership, which in turn encourages legal certainty and directly incentivises investment and development of the property.
Solving the problem
We solve poverty through economic freedom: empowering ordinary South Africans and entrepreneurs to find employment, grow their enterprises, and…
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Read the full article by Martin van Staden, Legal Fellow, Sakeliga, as well as a host of other topical management articles written by professionals, consultants and academics in the August/September 2021 edition of BusinessBrief.
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