A Curious Case: SA’s own Game of Thrones

2014-07-22 13:30

I am watching the medieval fantasy TV show Game of Thrones while reading Capital in the Twenty-First Century, a 700-page bestseller by French economist Thomas Piketty.

The book is making waves worldwide for saying inequality is an inherent, destructive part of capitalism.

Piketty cites several reasons for this. It’s summed up as: inequality grows when the rate of return on capital assets exceeds the overall growth rate of the economy.

This is precisely what has happened globally over the past few centuries, hence the massive divide between rich and poor.

This force is so fundamental it can offset whatever effects education and acquiring skills, and other factors that decrease inequality, might have on the earnings of those without capital.

The book also puts paid to the belief that capitalism rewards hard work and merit. It rewards inherited wealth, especially when economic growth is low.

Understandably, economic conservatives and libertarians like the Free Market Foundation are reeling. The basis of their world has been overturned. Inequality also requires the state to intervene if its destructive effects are to be avoided.

Piketty justifies his claims with statistical data analysis. He laments there’s been a paucity of fact in the debate about inequality. Historians might disagree.

They’ve presented historical facts explaining the economic rationalisation for feudalism, imperialism, indentured servitude, slavery, colonialism and apartheid.

These have had a fundamental effect on inequality, the labour wage and education the world over.

Piketty recognises that the distribution of wealth has always been political. He says what’s accepted as just and fair is determined by the dominant ideology of the day and the distribution of power in society.

This point?–?and why inequitably distributed wealth sows social discord?–?resonated while watching a scene in Game of Thrones.

Two characters, who had risen from commoner to nobleman by wheeling and dealing, were talking. One, Varys, did this by clinging to the coat-tails of a brutal and wealthy family?– the realm’s rulers.

The other, Petyr Baelish, played the faithful servant of the realm while secretly disrupting the social order and exploiting the gaps created.

They agreed that the realm?–?the ideology and myth justifying their social hierarchy?–?was a story they’d told each other so many times they’d forgotten it was a lie. Varys says without the realm, without the lie, there would be chaos.

Petyr says chaos is a ladder to be climbed by those lower in the social order.

Piketty presents similar scenarios about social hierarchies past and present, particularly where rich countries owned the capital of poor countries. He notes that this arrangement is difficult to maintain without a system of political domination.

He says it will inevitably result in political demands for capital to be expropriated from foreign hands.

Thus the country alternates between revolutionary governments intent on expropriating capital and those dedicated to protecting existing property owners.

Piketty wrote this in general terms but might as well have been describing South Africa in particular.

Even before our feigned revolution in 1994, when political domination existed to collect and keep capital in foreign and white hands, the ANC, the government-in-waiting, began to change. Its position shifted from revolutionary to protector of existing capital ownership.

At its door knock two revolutionary governments-in-waiting: the Economic Freedom Fighters (EFF) and Numsa. As Piketty predicted, both want to expropriate capital from “foreign” hands.

This is the ladder they, like Petyr, drop through our inequitable social hierarchy, which is lurching towards upheaval.

Surprisingly, Piketty’s solution is not that we jettison the lies. It’s that we make them fairer by imposing a global tax on wealth.

I can see the ANC going for this idea. But I suspect the EFF and Numsa believe they can buck the historical precedent of revolutionaries who were captured by the vested interests of today’s capital owners and failed to improve the conditions for their people.

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