Addressing the challenges of inequality around the world, specifically in Africa, is becoming increasingly paramount. Degrees of inequality at all levels of society negatively impact on poverty-reduction strategies, result in inefficient resource allocations by governments and policymakers, wasted productive potential, exponential growth in dependency ratios within society as well as impaired institutional development.
In Africa, according to research conducted by the Africa Development Bank, varying degrees of inequality prevalent in society ultimately results in stunted development. This stunted development provides the nefarious catalyst for slower or stagnant economic growth, which in turn results in health and social problems in society as well as sub-standard educational outcomes in primary and secondary institutions.
All these variables ultimately exacerbate levels of poverty and unemployment which then lead to even greater social inequalities in society, especially among children, as well as generating social and political instability, which have the capacity to lead to conflicts and civil war.
A tangible example of the impact of gross levels of inequality and its direct link to political instability and civil unrest is highlighted in what unfolded in the North African and Middle East region over 18 months ago. The “Arab Spring” which was sparked in Tunisia by a humble vegetable seller, disillusioned with his prospects of social mobility, ignited a wave of political and social unrest in the region, ultimately spreading to Algeria, Bahrain, Egypt, Libya, Iraq, Jordan, Kuwait, Morocco, Yemen and now currently playing out violently in Syria.
Even though the conflict in Syria against the Assad regime has not yet resolved itself, other previously entrenched and once seemingly immovable totalitarian political regimes, have been overthrown in four countries, namely, Tunisia, Egypt, Libya, and Yemen.
The lasting legacy of the Arab Spring, which erupted towards the end of 2010, has led to a number of ambitious and extensive reforms in addressing levels of inequality and issues of social mobility. Added to this, demands for greater levels of economic and political inclusion has resulted in the broad refusal of citizens in various countries to no longer tolerate the gross socio-economic inequality perpetuated by the firmly-entrenched “elite”, who have enjoyed sweeping power, control and influence for prolonged periods of time.
Therefore, in many countries today the issue of inequality has become the critical variable of international and national discourse. Thus, in addition to debates around addressing levels of equity in society, there are also strong economic and political reasons to be concerned about inequality, its various dimensions and what role this will facilitate and tensions it may perpetuate in the 21st century.
In Africa, levels of inequality, which is the result of income poverty, was tracked at 47.5% in sub-Saharan Africa, based on the headcount index metric for international poverty line of $1.25 a day. More notably, at the $2 a day international poverty line, sub-Saharan Africa rose to a staggering 69.2% in terms of people affected by income poverty within the region.
Compared to the rest of the world, the most recent data available from the World Bank indicates that the sub-Saharan African region also has the second highest level of income inequality, measured at 45.4% only slightly better than Latin America and the Caribbean, measured at 51.9% and trailing East Asia and the Pacific region which measures in at 39.2% respectively.
Apart from the challenges that income inequality perpetuates on countries and societies, policymakers and governments are also concerned about other dimensions of inequality, including those in education and health. There is also increasing concern about gender inequality in these social indices and especially those related to the labour market.
In the wake of the Arab Spring, and the potential of the disruptive and potentially destructive nature of civil unrest and civil war, governments around the world need to critically engage in dialogue with large employers in addressing unemployment through strategic skills planning, skills development and skills matching.
Added to this, innovative public-private partnerships and opportunities for collaboration among large employers, governments and other relevant stakeholders such as higher and vocational educational institutions to transform institutional structures and strengthen economies also needs to be planned and implemented.
A prescient look into the future dictates that sustainable inclusive growth and development as well as inclusive governance must form the bedrock for governments and policymakers around the world in order to marry the transformation between the large levels of inequality currently being experienced around the world and the inclusive potential of greater equality in society in the decades to come.
“The Forgotten Frontier” is the clash between the cultures of Bushmen(San), Hottentots (Khoi) and Dutch and explains why the San Bushmen, who could not adapt their culture, made suicidal attacks on the other 2 cultures.
Lyndall, you have totally lost the plot again.
@Enough said:
How about how Marxism has been applied in the real world and proved to be flawed? You’ve heard of Cuba, North Korea, USSR, Vietnam…? How about how the labour theory of value as Marx plagiarised it is a flawed notion?
Pardon me but I find it difficult to believe people still take Marx seriously, even in its original guise, which is the source of the drivel. Just like I find it difficult to believe that people still believe that income inequality relates to political instability.
you are quite correct on the socially destructive effects that inequality causes in society and this is well illustrated in the book “The Spirit Level” by Wilson and Pickett.
However it is our debt-based monetary system of compound interest and fractional reserve banking which is the systemic and root cause of growing inequality. With the advent of deregulation of the banking sector and trade liberalisation of neoliberal globalisation. this has become worse. This has resulted in over-financialisation of the economy and parasitic rent-seeking activity of the oligarchic banking sector to the detriment of the real productive economy and social mobility. As a result of this casino economy and the so-called speculative financial innovations in the derivatives market, the rich have become richer , the poor poorer and the middle class attenuated on a sustained basis. The derivatives market alone dwarfs real global economic output by a factor of 30 to 1 in notional financial value on pure leverage.
Hence the growing calls for greater regulation of the financial sector and the separation of plain vanilla retail banking from investment banking and the restoration of the Glass- Steagall Act in the short-term. In the long term we need more profound banking and monetary reform with full or 100% reserve banking and debt-free public credit for investment in sustainable “green” infrastructure and a steady-state economy. Compound (exponential) growth on a finite planet is insane.
@Yaj:
The banking sector has not been regulated. The Glass-Steagull Act never applied to South Africa. If you want 100% reserve free banking, look to the Eurozone which does not have a lender of last resort.
By the way, most countries in the Eurozone has a relatively low GNI count. This means relatively low income inequality. Why is there political instability in Europe?
Last should be ‘has not been deregulated’.
Glass-Steagull Act was repealed in 1999. At this time, it was repealed because it was ineffective. Goes without saying that this is American legislation and has no effect on South Africa’s situation.
Good point concerning debt, though. Look how fiscally conservative we were until Zuma took the helm. Those chickens are going to come home to roost eventually.
Not one person commenting here (56 respnses) has even attemted to rebuff one of the Karl Marxs quotes I posted. Only anti-Marx rhetoric. Shame on you anti-intellectuals.
@Garg
If the Credit Control Act (CCA) in South Africa is not strict bank regulation in SA you are so out of touch with reality your comments are worthless. The CCA has saved us from the cowboy bank collapse the US is still trying to recover from while their tax payers pay the price for this rescue.
@Garg, Joe Stiglitz would disagreed with you on the Glass Steagall Act because he says the lobbyists paid $300 million dollars to get congress to repeal this act. The repeal of this act allowed the saving banks and the commercial banks to merge and this was led to the meltdown. You say in your comment that the law wasn’t effective, the law wasn’t effective because nobody in Washington tried to enforce the Glass Steagall Act. You have the same problem in SA with people committing corruption, the justice system are not enforcing the laws against the ANC big wheels. The repeal of the Glass Steagall Act had an impact around the world because oversea bank rushed in to the US to get their share. Many of these dictators lost a lot of money in the US with the meltdown. Regardless of what some of these experts are saying, capitalism can’t work without government regulations. The free market works well when there is many buyers and sellers in the market place. Those state run monopolies in Africa are tickets to poverty in those countries. Breakup Exkoms and create more energy companies.
@Garg, you read Taleb’s “Black Swan” in this book he claims that unexpected events can throw the market in a tailspin. He wouldn’t give a dime to all these so called expert that have been given awards in economic.
@Sterling:
Exactly. So regulation or no regulation, it made no difference. Also, in Taleb’s Black Swan, he is particularly critical of so-called experts like Stiglitz and Krugman (and Friedman too). You’d notice that he spoke favourably of Popper and Hayek, though.
Nevertheless, agreed regarding regulations. Any regulation has to be enforced to have an effect. By the same token, due to laws being made willy-nilly (like banning alcohol advertising or lowering the drinking limit for drunk driving requirements) results in people not taking laws seriously. The particular set-up of the sub-prime mortgage crisis encouraged moral hazard though, regulation or no, as counties and government cronies were playing casino too.
I’m currently reading Extreme Money by Satyajit Das (it’s not as good as Quants) but both those should sketch a different picture and illustrate how the crisis was long overdue. It really stretches further back than 1999 and has little to do with regulations which weren’t enforced anyway, or deregulation.
@Enough said:
Because Marx has been debunked already, even in his time. Read a bit wider, follow my links and you’ll see why.
Let’s start with one of your quotes:
“Capitalist production, therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth-the soil and the labourer”
The soil and labourer are not original sources of all wealth. Read up on the history of computers and that myth would be dispelled. Or the history of the telegraph, for that matter.
@Garg
So there are not a hand full of capitalists that monopolize global computer or telegraph production? Of course those companies sap the original source of wealth, the laborer in their case, as per that Marx quote. Garg, you are are in denial.
@Enough said:
I can bring a horse to water, but I cannot make it think. You have more than enough to reveal the truth about Marx, provided of course that you read it with an open mind.
Take Henry Ford, for example. Did he sap his labourers? Realise that such manual labour is completely redundant today. Rather, it’s the labourers who are sapping the knowledge economy as their labour can easily be performed by machines.
If labour is the source of wealth, and the labour is performed by machines, then where is the hold that the labourers have on the capitalists? Also, where are the labourers being sapped if they aren’t even in the picture but the labour is performed by machines?
Once you reach puberty you will get over your Marx phase. Otherwise there’s always work for you in the calm waters of a tertiary institute where you may ensure a steady delivery of sunken minds safely tucked away from the rough seas of reality.
@Garg
If labor is not part of the equation or no longer relevant, why did Marikana happen?
Why did Lee-Roy Chetty write an article titled “Inequality, a direct link to political instability”? – maybe you should read this article again.
Another Marx quote well worth reading:
“It will be the workers, with their courage, resolution and self-sacrifice, who will be chiefly responsible for achieving victory. The petty bourgeoisie will hesitate as long as possible and remain fearful, irresolute and inactive; but when victory is certain it will claim it for itself and will call upon the workers to behave in an orderly fashion, and it will exclude the proletariat from the fruits of victory. … the rule of the bourgeois democrats, from the very first, will carry within it the seeds of its own destruction, and its subsequent displacement by the proletariat will be made considerably easier..”
Marx, Address of the Central Committee to the Communist League (1850)
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@Enough said:
Did I say that labour is no longer relevant? Or did I perhaps say that labour is not the source of wealth? Miners, for example, take commodities out of the earth. The commodities do not become valuable due to the labour expended to get them, they are already subjectively valuable and that’s why labour is employed to get them. Are machines taking commodities out of the earth at Marikana?
Did you read my comments and follow my links to see why income inequality is not related to social instability? If you can’t spot the nations with instability from that chart, then the hypothesis is falsified.
Marxism has been tried. The proletariat ruled Vietnam, North Korea, Cuba, Laos, China. etc. In all those cases, rather than the bourgeoisie democrats carrying within them the seeds of their own destruction, it was the collective farming that carried within it the seeds of their own destruction.
If Marx is correct in that profit comes from ‘surplus value’, why are the proletariat not happy to perform only the ‘necessary labour’? Why do they want to run illegal businesses on the side like they do in North Korea if there’s no tangible value over and above the amount of hours of labour performed? To exploit one another’s labour?
@Garg
This Marx quote probably answers all/most of your above post if you understand it:
“The bureaucracy is a circle from which no one can escape. Its hierarchy is a hierarchy of knowledge.”
Marx, Critique of Hegel’s Philosophy of Right (1843)
Sorry Garg – You obviously cannot escape the hierarchy of knowledge of your system. What your hierarchy of knowledge imposes is: “Under private property … Each tries to establish over the other an alien power, so as thereby to find satisfaction of his own selfish need. The increase in the quantity of objects is therefore accompanied by an extension of the realm of the alien powers to which man is subjected, and every new product represents a new potentiality of mutual swindling and mutual plundering.
Marx, Human Requirements and Division of Labour (1844)
Aye, Marx was brilliant.
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@Garg
In case you think the only person I quote is Marx: “The alternative to socialism is not capitalism. The alternative to socialism is extinction.” Thanks Jeff Mincey.
@Enough Said:
And a socialist system cannot escape a hierarchy of knowledge either. Neither can there be a socialist system without bureaucracy. But this does not address my concerns, nor is it even relevant to the critics of Marx to whom I’ve referred you.
You’re not going to get any wiser if you read Marx sycophants. You will get wiser if you read people who disagree with Marx..
Congratulations on your titles…
I think inequality has a direct link to everything, but most importantly to how humans think.
Einstein said:
“Common sense is the collection of prejudices acquired by age eighteen.” ~Einstein
Cool, so he’s given us a hint here.
Unfortunately, he also said…
“It is harder to crack prejudice than an atom.” ~Einstein
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