Part Three in a three-part series. Part One can be read here, and Part Two here.
“Another reason for controlling political and economic inequalities is to prevent a part of society from dominating the rest. When two inequalities are large they tend to go hand-in-hand. This allows a few, in virtue of their control over the political process, to enact a system of law and property ensuring their dominant position not only in politics but throughout the economy.” (John Rawls, Lectures on the History of Political Philosophy)
Structural inequality has long been prevalent – you do not only have to wade through Thomas Piketty’s doorstoppers as there are enough mainstream reports on the nature of global inequality: the underlying shift has been the uneven distribution of income share between capital and labour over the past 40 years – with the former decidedly the biggest beneficiary of the largesse of gains from economic growth.
Green transitions cannot engineer a just transition without addressing the cause of the prevailing structural inequality and injustices. The problem of the green transition is that it is bandied as a benevolent event, slowly being born or coming on the horizon that is suddenly going to change the lot of humanity.
The point is, what is the context for all this surge in green investments? Who wins and who loses?
The Alston report on poverty released in 2020 has been quite damning of the Poverty Line Index, which has been used loosely by proponents that we are winning the war on poverty. If anything, the Poverty Line Index obscured the true nature of poverty.
Alston’s critique calls for a revisiting of how we measure poverty, especially post-Covid-19. As Alston notes: “Covid-19 is a pandemic of poverty, exposing the parlous state of safety nets for those on lower incomes.” As the pandemic has shown, it does not take much to push people back into a poverty trap – they are on a seesaw in and out of poverty, determined entirely by the variability of income and social services they receive.
The essence of the Alston report calls for poverty measures to be more contextual for different countries and regions, to recognise that poverty measures can also obscure the true status of groups that are politically and socially excluded — especially women, people from specific ethnicities and race — and that poverty must be measured in relation to a broader set of indicators, like the security of rights and enhancement of capabilities.
If not, just transitions and meeting climate goals may well entrench not only economic apartheid but what Alston also called “climate apartheid” – the unequal distribution of burden and benefits. A significant shift in gear will have to come from capable states and public finance, which in the current environment — placing sole emphasis on markets and private finance — suggests that inequality will not be resolved entirely from the promise of markets.
But where to start? How we think of a just society is important in ensuring that institutions and incentives are guided by this framework.
Rawls wrote the Theory of Justice between 1950 and 1971. He spent all that time grappling with the problem of freedom and inequality within a democratic society. His books provide an ethic of justice for a liberal property-owning democracy as a way of tying personal freedom with broader social protection and justice. The theory was also a challenge to blanket utilitarianism that privileged individual-maximising behaviour and gains against the losses of others.
Rawls, therefore, saw first-order (political freedoms) and second-order rights (socioeconomic benefits) as interlocked and emanating from each other. They are coupled and work together, rather than the one waiting for the other.
Rawls provides a useful framework (and he is not the only one) to understand the relationship between freedom and inequality. For Rawls, the basic requirement for a just society is the provision of minimum safety nets which exclude nobody. Rawls is not against property ownership, but he would be interested in how it is used and the purpose it serves.
For an orderly transition, Leviathan can only succeed if it is not the source of derision but rather a catalyst of cooperation. No society’s economic goods can accomplish distributive justice or for that matter have stable economic progress, to use that Hobbesian term, if its people are constantly ‘warring’.
For a Rawlsian-type programme to succeed and be the basis of the framework for a just transition model for South Africa (given all these Rawlsian elements are already in place in South Africa’s constitutional framework), it needs an abiding Leviathan (the capable state) that itself is just and can ensure an orderly transition to a just society.
For an orderly transition, Leviathan can only succeed if it is not the source of derision but rather a catalyst of cooperation. No society’s economic goods can accomplish distributive justice or for that matter have stable economic progress, to use that Hobbesian term, if its people are constantly “warring”.
Thomas Hobbes envisaged a world in which all wars can come to an end if the sovereign had a monopoly over violence and in return, it would either be an enlightened authoritarian ruler or a benevolent sovereign where such power it has is through the will of the citizens. This conceding of power to a higher Earthly authority also came with the promise of removing the fear of arbitrary justice and violence.
No Leviathan, though, should be trusted to accomplish this without some chains put on it — the subject of a discussion in the recent book of Daron Acemoglu and James Robinson, “The Narrow Corridor”. States have enormous leverage to shape the ethos and redistributive mechanism of the economy by taming the excesses of the market and, for that matter, public enterprises. All of this is good if the state is sufficiently shackled to be the servant of the people and not the servant of those who occupy office.
The South African Leviathan is weakly shackled and, as the past 10 years and more have shown, it has the capacity to go rogue, especially if the dominant party cannot get its members to work in sync and place personal interests above the rest. It sits on a providence of natural wealth and a country with diverse talent and ought to be able to coordinate the productive use of both, if it is so willing.
Relying on promises, the slogans of Batho Pele and the developmental state will change nothing as one can see in the shameless execution of “tenderpreneurism” and theft involving PPEs during the Covid-19 crisis.
Let’s not even mention the scandalous collapse of the public rail agency, Prasa, as another example of the failings of the Leviathan. The state and dominant party have become synonymous. The shackles remain if party members are accountable as the ethos of the party rubs off on to the ethos of the state. This is why opening up the books of party funding will further tame the pilfering fingers of undemocratic influence and corruption.
These dual synergies between the nexus of social justice provisions and the shackled state, harangued by vigorous civic action and progressive politics, will be a key ingredient for a new economic recovery.
When it comes to social protections, South Africa does well in some places (like the distribution of social grants), but fails in others such as preventing gender-based violence, providing high-quality public education, and affordable and reliable public transport and health.
The lack of good public services – largely a failure of management and poorly governed municipalities – has only served to add to the inequality and the decline in South Africa’s Gini coefficient.
The provision of public services and social protections complement poor household income because they help low-income households avoid stretching their meagre incomes. As public service is almost non-existent, poorly delivered and of low quality, poor households are forced to substitute public services for private providers at much higher cost – families interested in good health and quality education exit the public system for the private.
A just transition in the context of a weak or unshackled Leviathan makes the prospect of such a transition even harder to achieve – a Sisyphean task, if not an interesting one. The world cannot wait for one to be solved and for the other to follow. Reality has no time for utopia as it often gifts you with the least ideal of situations. It is good, though, to know you cannot put all your eggs in one basket – and more than anything remove the shackles of our naïvety so that we can rest if Leviathan and the markets promise us heaven on earth. So far, the record has not been convincing. DM