Charitable millionaires

2013-02-05 00:00

THE main worry of many people in our middle class is that they are in debt and they may not achieve economic freedom in their lifetime, according to a recent survey by the global technology company Visa.

The ANC Youth League used the phrase “economic freedom” to mean broader structural reforms in the economy, including state ownership of key economic assets, in the hope that this would translate into economic emancipation. This was based on an analysis that assumes that well-meaning structural reforms and state ownership translate to the financial empowerment of the broader citizenry. However, the phrase means much more than this structuralist perspective.

I am not discounting the point about structural barriers to black participation in the economy, especially where there are strong monopolies involved. Removing them goes a long way to creating opportunities for a large segment of the citizenry to be meaningfully engaged in wealth generation. This has been the main focus of the empowerment and transformation agendas in post-apartheid South Africa, and the outcomes have not been that pleasing so far.

While there is obvious change in economic participation in some parts of the economy, albeit small, we are yet to see real broad-based empowerment of citizens. We have seen white capital co-opt small numbers of black people into the pre-existing patterns of economic ownership. While this has helped increase the number of black millionaires and billionaires, it has not had a significant impact on socioeconomic patterns lower down the social ladder.

The rise of the “empowered” class is helping to demystify wealth generation, even though it has resulted in changes in core wealth patterns. A black capitalist class is an important part of this transformation agenda, even though they are sometimes regarded as an aberration, just as female capitalists are important in the struggle for the emancipation of women. The same can be said about other marginalised social groups like the youth. But such capitalists are inadequate unless they decide to contribute actively in a wider distribution of wealth and unless there emerges a strong and self-sufficient middle class.

Black capitalists’ ability to distribute and share their fortunes with the less fortunate in the manner that the super-rich in the West do, the practice of which the likes of Patrice Motsepe are joining, demonstrates the value of a socially conscious capitalist class. It is good to have super-wealthy families who understand that it is morally sound and socially beneficial to contribute to philanthropy

The Motsepes’ decision to invest half of their wealth in charitable causes annually, following on the heels of similar undertakings by American billionaires, is a welcome move. It has already inspired other billionaires, especially the Rupert and Ackerman families, to declare that they, too, are involved in social projects, while they refused to be as bold as Motsepe, considering it to be a PR exercise and artificial, if Sunday newspaper reports are to be believed. It is not just the considerable amount that the Motsepes are committing that is laudable, but also the causes they want to advance: education, poverty eradication and social security, among others. Too often, we rely on the generosity of American or European philanthropists like the Gateses or George Soros, etc. for social programmes in Africa. The black population has also tended to rely on white charity in South Africa.

The Motsepes alone will not make much difference in meeting the needs and deracialising philanthropy, but their move is likely to inspire other wealthy black people to take similarly bold steps towards the eradication of poverty.

We need a strong middle class that values wealth generation and giving to the poor for philanthropy to make a serious difference. The Visa survey suggests that a large part of the wealthy portion of our population is caught up in the debt trap. It is unable to build sustainable wealth for their families let alone give to the poor. We have known for some time that extravagance and crass materialism are eroding the wealth that the middle class acquires. So, if we in the middle class learnt a bit of restraint and humility in our lifestyles, we would not only save our families, but we would be able to contribute to charitable causes.

But caught up in debt, this class cannot contribute to boosting education. They cannot even save much of what they earn to leave an inheritance for their children.

Real economic freedom will come from structural reforms, increased philanthropy, a radical strengthening of the public education on which the poor depend, and the growth of a socially conscious middle class, especially in the black communities.

• Siphamandla Zondi is the executive director of the Institute for Global Dialogue. He writes in his personal capacity.

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