In September 2013, Thomas Piketty, widely regarded as a rock star economist and author ofNew York Times Bestseller The capital in the 21st century, delivered the 13th Nelson Mandela Lecture at the Soweto Campus of the University of Johannesburg. The heart of his lecture was that inequality has never been resolved through economic development. Deliberate and ambitious reforms and even violent shocks against the established economic order have always been necessary.
Piketty used his native France and Europe as examples of his claims. Reducing inequalities in Europe was the result of violence rather than market forces. World War I, the Great Depression, World War II, welfare state policies, new tax policies, and progressive taxation were forced on elites because the alternative was total expropriation to cover costs. of the war.
Piketty’s argument was that South Africa, like the rest of the world, will not solve the problem of inequality, a corrosive problem that can cause instability and conflict, through market forces and voluntary market transactions. . It was clear that as desirable as economic growth, foreign investment and development, employment might be, they would not be able to resolve inequalities. Piketty lamented the high inequalities in South Africa, which was one of the highest in the world, 25 years after the start of the new democracy, especially because inequalities were growing and were now greater than they were. were 25 years earlier.
Piketty of course understands that wealth generally increases more than income. Those with historical wealth will always get richer, regardless of the income earned by new entries. In South Africa, those with historical richness are almost exclusively white.
Piketty also noted the government’s attempts to address this historic racial inequality and made it clear that Black Economic Empowerment (BEE) has had little success because it is based on voluntary market transactions, especially the land reform. The elite never accepted state intervention or ambitious land reforms or even high tax increases until they had no choice. He said South Africa needed a much more ambitious land reform program to tackle inequalities.
INEQUALITY IN SOUTH AFRICA
Inequalities in South Africa have increased, despite the economic successes of the first 15 years of our democracy. Research by the Maphungubwe Institute for Strategic Thinking (MINSTRA), presented by MINSTRA Director Joel Netshitenzhe in Helsinki, Finland, found that although poverty in South Africa fell, halved between 2001 and 2011, inequalities had in fact increased, both between races and between races.
The poor benefited from welfare policies and the rich benefited from pro-business government policies. There was no racial breakthrough on inequality, however, as those with historic wealth were those who could participate fully in the economy and reap the benefits of growth.
This characterizes the years of the Mbeki Presidency and the so-called 1996 class project; pro-market policies, privatization, South Africa Inc, ASGISA, resources left to the most productive people, runoff economy that never really reverberated, where the rich got richer, the poor got out of poverty by taxing rich and the gap between rich and poor kept widening.
As it was then, it is so now that Mbeki offers no solution to this racial inequality but rather presents the ANC as having made a historic commitment to rule the affairs of the elite. The African National Congress (ANC) must pamper and massage these interests, protect them because they will result in economic development and employment.
In 2017, at the Nasrec conference, the ANC finally realized that racial equality won’t happen on its own, the party should be deliberate and intentional, with clear policy and goals, and it all starts with an agrarian reform. The ANC adopted land expropriation without compensation as a policy at the time in order to finally address the racial disparities in land ownership that the black majority looks out on, landless, dispossessed and without essential economic tools for them. help to better participate in the market.
A year later, in September 2018, Mbeki published a 30-page brochure in which he in fact claimed that the expropriation of land without compensation was incompatible with the non-racial character of the ANC. Indeed, the non-racialism of the ANC is racial blindness and racial denial that sees no racial inequality, no lack of social justice, that the transition to the new dispensation has not been unequally seated on its backs. black people, so anything that Non-racism should and should mean that the comfort of the white race is guaranteed.
A few days ago, Mbeki released another document, this time defending the worn-out argument that land expropriation is a threat to foreign direct investment and all the intricacies that come with it.
Mbeki is, of course, the champion of the much-discredited post-war spillover economy, from which Sussex Mbeki was baptized. The post-Berlin Wall and 1990s Washington Consensus strongly influenced the ANC government in its transition to market-based policies, so if we leave all the wealth to the elite, with her productivity and genius, she could drop enough crumbs for us in jobs, welfare and taxes that we have a minimum of a functioning economy. Indeed, do not heckle the boat with a revolution and ambitious reforms that will temper the elites and their investments, because our lives depend on it.
Mbeki is also hypocritical, however, because when he was president, despite pro-market and business-friendly policies, despite a lackluster land reform program that favored the seller, investors always found a reason not to invest as they should in our country, whatever policies we have undertaken. . On September 10, 2004, Mbeki berated then Anglo-American CEO Tony Trahar for claiming that there remained a lingering political risk in South Africa, which led Anglo to list on the Stock Exchange of London.
Mbeki also lambasted Sasol for criticizing BEE as a potential business risk. Contrary to this, Mbeki rejected the idea that BEE is a possible threat to investors. Every couple of days, companies find something about government like reasons they don’t invest, and when you follow those reasons, they drift into infinite regression. The reasons not to invest are everywhere and nowhere. Mbeki’s fear of land expropriation without compensation is a silent point as investors do not need land expropriation in order not to invest.
BENEFITS OF LAND EXPROPRIATION
Mbeki may well belong to a generation that has learned to accept that as long as whites are doing well, all is well in the world. Blacks are not lambs who were slain so that the sins of the whites may be forgiven and to enable them to retain their unjust enrichment and land ownership.
As South Africans, we will not lose sight of the obvious advantages of land expropriation, which will result in widespread ownership of land and property.
First, research has shown that where there is a high level of land ownership, there are also high levels of educational achievement. It also showed that crime levels are also low. This is because landowners participate in their communities, community safety programs and other local projects. Landowners are also healthier, with less mental health and live more fulfilled lives.
More importantly, the expropriation of land will solve the problem of unused land which deprives us of much of the economic activity.
The concentration of land ownership in the hands of a few deprives us all of the genius of many.
Yonela Diko is the former spokesperson for the Minister of Human Settlements, Water and Sanitation. You can follow him on Twitter: @yonela_diko