Research & Innovation 2015-16 - Page 31



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along with debt – the rising standard of living has been
financed through both rising income and rising debt. At
the same time, a large class of poor people – confined to
the very edges of the labour market – has experienced
only modest benefits, if any.
Neoliberalism overstated
This pattern of winners and losers is rooted in public
policy. Most critics of post-apartheid public policy
emphasise the influence of neoliberalism, to which
they attribute these high levels of inequality. For
two reasons, we argue that this is only part of the
story. First, explanations focusing on neoliberalism
exaggerate the extent to which the government’s
social policies and service delivery have been
characterised by ‘recommodification’ (a reversion
to market-based distribution), and underestimate
the extent of ‘decommodification’ (the recognition
that citizens have claims on society independently
of their position in the labour market). One in three
South Africans receives a government grant or
pension, millions live in publicly funded housing
and benefit from subsidised municipal services, and
millions more are alive because of publicly funded
antiretroviral treatment.
The challenge of an over-regulated labour market
Secondly, the state is heavily involved in the regulation
of wages in the labour market, especially through
minimum-wage-setting for less-skilled workers. We
argue that this is a major contributory factor in the
persistence of unemployment, and hence poverty,
because – in combination with industrial and other
public policies – it serves to steer the economy down
a growth path that favours people with capital and
skills, and disadvantages those with neither. Poverty
persists in South Africa, not primarily because of
insufficient economic growth or the absence of
redistribution, but because the economic growth
path has not resulted in job creation; and the ensuing
poverty has been too large to eliminate easily through
redistributive government expenditure.
Lastly, we turn to the politics of distribution
and redistribution. The formal architecture of
representative democracy only partly empowers
the poor, because – as is now well-recognised – the
electoral system contributes to the centralisation
of power within political parties, and the erosion of
accountability to voters. The judiciary, and especially
the Constitutional Court, provides modest pressure
on the government to realise social and economic
rights, but it is compelled to act cautiously in the
face of legislative and executive conservatism.
Business is less powerful than often alleged, with
the governing party remaining deeply ambivalent
about established, ‘white’ business. Organised labour,
however, has enjoyed considerable political power,
securing broadly labour-friendly policies across a
range of government departments – and contributing
to an economic growth path that favours higher
wages over job creation.
Finally, direct action by the poor – the so-called
‘rebellion of the poor’ in urban areas across
the country – has proved effective as a way
of registering discontent with service delivery,
primarily by local government, but does not address
the underlying causes of enduring poverty in the
form of an economic growth path that results in
massive unemployment.
By Professors Jeremy Seekings and Nicoli Nattrass
of the Centre for Social Science Research. Images
by Matthew Skade.
No poverty, economic growth and reduced inequalities 26





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