A blanke cheque

2013-06-03 10:00

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Frans Cronje has confirmed black people’s existing suspicions about white privilege

I read with great interest Frans Cronje’s article, “W(h)ither the Whites?” (City Press, May 19 2013).

If anything, the article provides empirical confirmation of what many of us have always known – that black people have had the raw end of the stick under the ANC government, while white people have generally prospered.

It also confirms that the greatest betrayal of black people has been in the area of education. I read somewhere that South Africa ranked at the bottom in the world in terms of educational outcomes, just ahead of Yemen.

We have always known that the levels of unemployment have more than doubled since the nation achieved democracy, while poverty has remained unacceptably high, cushioned by one of the most elaborate welfare systems in the world.

A few years ago, I wrote an article for the Woodrow Wilson International Center for Scholars in which I called for a productivist approach to social welfare in South Africa, which is the only way you can sustain the programme in the long run without busting the fiscus.

But I made an important point that is lost in Cronje’s article. Cronje rightly compares income inequality between blacks and whites, and finds that in 1994, black people earned 12% of every rand that white South Africans earned.

After 20 years, this increased to 13%. That’s correct, an improvement of 1 percentage point.

And the ANC tells me it is a liberation movement that has the interest of black people at heart?

Cronje, however, focuses only on income inequality, and this is where his otherwise incisive article falters.

He writes: “Here it must be explained that the key driver of such continued inequality is not white wealth but, rather, abysmal education and labour-market outcomes for black South Africans.”

But Cronje makes such a statement without saying anything about differentials in terms of wealth, not just income. If he did, a different story would emerge.

We would find that asset inequality is several times greater than the income inequality. Black people may well own nothing for every R1 worth of assets owned by white people.

In their comparison of income and asset inequality between black and white Americans, Melvin Oliver and Thomas Shapiro found that “middle class blacks, for example, earn 70c for every dollar earned by middle class whites, but they possess only 15c for every dollar of wealth held by middle class whites”.

If Cronje paid attention to asset inequality, he would be forced to face unpalatable and unthinkable propositions – hence the rush to declaim any link between white wealth and the social conditions that prevail in the nation.

I would be the first to agree with him that education is key to upward mobility, but studies have shown that even the best education will not close this asset gap between black and white people.

The difference between me and my fellow professors at the University of Cape Town is that while my family was legally prohibited from accumulating assets, their parents accumulated assets that in turn gave them and their children better life options than mine, even though we all belong in the middle class.

That is why arguments to dismantle affirmative action on the grounds that black middle class children have the same opportunities as their white counterparts are so misguided.

One thing that is wrong with black middle class parents is that their children are out on the streets. And given that much of black economic empowerment is a house of cards, the celebrated middle class is an illusion.

True, there is a handful of black people who are asset owners – and please, spare

me the nonsense about RDP houses as assets. Whites are an asset-owning class and blacks are an income-earning class in South Africa, if they are lucky enough to get employment.

Michael Sherraden, author of Assets and the Poor, describes the difference between asset-owning and asset-less as follows: “People act and think differently when they are accumulating assets, and the world responds to them differently.”

I tend to understand why Cronje would skirt around the subject of asset inequality – it might just take him where he does not want to go, which is a discussion on wealth redistribution.

Skirting around the subject is worse than having a reasoned discussion about how to get the majority of people a stake in this nation, for the simple reason that people with a stake in society do not destroy what they own.

One does not expect the toyi-toying masses on the N1 to take over the wine farms across the highway without knowing the meaning of viticulture.

In the absence of such radical notions of redistribution, we ought to have open discussions about the relationships between income and assets ownership.

One of the arguments that scholars have made is that the irony of many policies is that they encourage saving among people who already own assets, and discourage it among those who do not.

Millionaire homeowners are encouraged to accumulate assets through mortgage deductions and forced savings such as retirement annuities.

The poor, on the other hand, are punished from owning assets by being taken off the welfare system the moment they are found to own any assets.

The increase in entrepreneurship among white people, many of whom were formerly in formal employment, is confirmation of this policy bias.

It would be interesting if Cronje were to provide a breakdown of how much of their contracts are government-related.

I bet the bulk of the work would be coming from a government that is happy to build asset ownership among whites and an elaborate welfare system among black people.

» Mangcu is author of Biko: A Biography, which has been short-listed for the 2013 Alan Paton Award for Nonfiction and the Media24 Recht Malan Prize for Nonfiction

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