Economy

When equality becomes unfair: South Africa’s two economies

Peculiarly enough, it is better than unemploymentSouth Africa is a microcosm for all the world’s greatest unresolved itches.

Here we have fair-skinned folk living in shiny new cities with first-rate infrastructure and access to all the best that science, technology, literature, art and innovation have to offer. These people are the nominally wealthy living idyllic lives that would be perfect save for their concerns about the people “living over there”.

Those folk are dark-skinned, living existences like so much distaff flotsam washed up against a pearly beach. Their homes are corrugated iron and plastic sheeting lean-tos higgledy-piggledy scattered, cheek-by-jowl. Clothes are scrubbed raw-clean but there is little room for more than one shirt, one pair of pants and one desperately shiny pair of shoes. Unemployment is widespread. These are the relatively destitute poor.

The relationship between these two economies is straightforward: the poor people work in the rich people’s factories, wash their cars, build their homes. They are the determined labourers upon whom the growth of the rich depends.

But it is a trade-off. If the poor’s wage demands were to become too onerous then rich people would buy machines to replace them. And so the status-quo is maintained.

However, it is an inherently unequal relationship and antagonism is rising. The rich recognise this and seek to protect themselves even further, limiting access to their communities to prevent entrance to outsiders. Sensing this, the poor are becoming violent and angry.

South Africa is a microcosm. Here it is played out within the borders of one land. In other places it occurs between nations.

Mexico and the US: the US sets unrealistically high labour conditions on the Mexican government in order to prevent cheap imports disrupting US manufacturing; then the US compounds it by preventing Mexican workers entering the US to seek for job denied them at home.

Europe, with their gratuitously wasteful Common Agricultural Project, does the same with their agriculture.

Union representatives and social activists claim that all of these rules that ensure equivalent labour practices and wages across the world are in the name of equality and fairness. There is nothing fair about a group of migrant workers drowning on a beach in England because they were desperate for work. They were digging for cockles, a delicacy in the UK. Unprotected by law since they’re not actually supposed to be there, the idle rich turn a blind eye to the harm protectionist laws cause. None of the workers could swim … when the tide came in.

Tides change. China proves this.

The poor are not just there to make things for rich people. The poor are themselves a market. While they are not wealthy relative to the rich, their markets are growing significantly faster than those in developed nations.

Suddenly the rich want access. And the poor don’t want them.

The US complains bitterly about Chinese trade imbalances and about a lack of access to Chinese markets.

South Africa has not yet reached that stage. The rules of equality prevent it.

A business setting up in South Africa has a choice: to place it in the wealthy part of the economy, or in the impoverished part. The business rules in both are the same, but the costs are not. “Poverty breeds crime,” according to Amartya Sen, one of the world’s foremost economists. And, in the tightly huddled mass of poverty in South Africa’s townships, crime is part of the wall-paper.

A company tasked with renovating the highway passing alongside one of Cape Town’s largest squatter camps has expressed outrage at the almost US 110 000 of theft they have put up with.

Businesses hearing this tremble at the very idea of setting up in the heart of such chaos. Far safer to stay home; and add to our safety by preventing the “criminals” from coming here too.

As with the French Revolution, sometimes the chaos spins out of control and upsets the sensibilities of the nice rich people who “never saw it coming”.

The rules of engagement call for fairness, not equality.

If we were to treat all people equally then there would be no wheel-chair ramps. If we were to treat all people equally then you would need a PhD just to serve coffee. If we were to treat all people equally then you’d drag anyone in off the street to perform heart surgery.

The outrage expressed over US military involvement in torture of captive soldiers in Iraq highlighted the reasons for honouring fairness over equality: “We don’t torture them so that they won’t torture us.”

The same is true in business. Everyone is someone else’s customer. We treat everyone fairly – but not necessarily equally – to ensure that they, in turn, will treat us fairly.

Categories: Economy, World

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10 replies »

  1. Thanks for this great post, Gavin.

    Elaine:

    I don’t think Gavin is a supporter of “seeing everything as business” – I think the point he’s making is that those who are used by the rich are capable of realizing and using their own power in the marketplace in order to gain some of the political and social fair treatment that a system that merely does lip service to “equality” (as many capitalist democratic systems do) will eventually get caught up by its own unfairness.

    Fair treatment of workers – whether those in S. Africa, the US/Mexico, or in the EU would end the need of some to go into business for themselves – often through crime. It would also reduce the terrible toll taken when those who are “invisible” because they lack any legal status as “workers” turn to dangerous activities like those migrant workers trying to gather cockles….

    What Gavin, I think, offers us instead is a lens through which even the most callous of capitalists might be able to see others as people rather than as materiel for enterprise – if one thinks of the poor as markets and realizes one must do “the right things” to compete for the business of these markets, then those who now see these groups as unworthy of interest or of no importance might be able to see them as they really are – as parts of one system – and that these people who seemed unimportant must be treated as fairly and with the same dignity and with the same rights as they themselves want to be treated with – then, then we might get somewhere toward assuring their progress and survival – and our own.

  2. Thanks Jim, yes, that’s about it.

    It really is about seeing everyone, no matter how poor, as having value. When you do that then you see the future and you don’t sacrifice long-term gain for short-term exploitation.

    Strangely enough, it is only dictatorships that have the ability to have a long-term view. China is pushing through unpleasant social changes merely because their leaders don’t have to face periodic popularity competitions.

    Politics is a lot like American Idol: no-one is going to rock the boat with an experimental or challenging song for fear of being voted off.

  3. Excellent analysis, Gavin. Achieving fairness and dignity is a daunting task, and the long-term view is certainly required. California increasingly resembles South Africa, with our undocumented immigrants worse off (in some ways) than SA blacks; they have no vote, and they can’t complain about wages or working conditions for fear of being deported.

  4. So … having standards for Mexican labor – who otherwise are often exploited in slave-like factories as bad as any of Blake’s dark, Satanic mills – is unfair to Mexican labor, because in some cases it keeps jobs in the US which would otherwise go to Mexico, and so helps temper the downward pressure on US laborer’s wages?

  5. Robert, thanks South Africa has a similar concern over Zimbabweans as the US does with Mexicans. Our rather spurious policy towards propping up Zimbabwe

  6. Gavin, interesting about Zimbabweans. I haven’t heard of Mexican laborers being cheated of their pay and turned in to the IRS, but that doesn’t mean it hasn’t happened. Some cases have come to light in California of undocumented Asian immigrants being held in conditions approaching slavery, supposedly to pay off those who brought them to the US. And people in such situations, as you point out, are unlikely to seek governmental help or media publicity, so they will work for illegally low wages in order to avoid deportation.

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