No Room for Discredited Economic Models in an Era of Jobless Growth
BYLINE: Glenn Ashton
Structural poverty, exacerbated by falling employment, has dogged South Africa since 1994. Subsequently unemployment has officially increased from about 20 percent of the active workforce to 25 percent today. The unofficial, "expanded", and probably more realistic, level of unemployment is closer to 40 percent. This issue, more than any other, threatens the fundamental stability of our nation.
In 1995, the philosopher Jeremy Rifkin published The End of Work. His predictions regarding unemployment were on the money. Technology and machines not only automated work, they simultaneously destroyed jobs at a staggering rate.
Industrial agriculture using GM crops employs fewer than two people per hectare. Free online advertising websites like Craigslist and Gumtree have destroyed classified adverts, shrinking income and employment in that industry by at least 80 percent. Real manufacturing has gone east, to China, India and the little tigers, never to return. Employment archetypes have been fundamentally transformed.
South Africa has been seriously compromised in its ability to deal with these challenges. Our self-imposed restructuring favoured big business and extractive industries. Eskom's relationship with Billiton is a case in point; we effectively subsidise this offshore multinational, paying three to five times more for our electricity.
Our government managed the remaining scraps fairly well but remains handicapped by its neo-liberal approach. It is not as if the economy has stagnated, here or abroad. Quite the opposite. Our GDP more than tripled, from about $135 billion in 1994 to more than $450bn today. Globally it more than doubled, from $33 trillion to more than $71 trillion. Global wealth is presently estimated at about $[euros] trillion.
So where did this wealth disappear to? It didn't trickle down, as promised, to where it was most needed. Instead, it ascended into the pockets of the already affluent. While South Africa has the most extreme inequality in the world, things elsewhere are little better; around a million people control nearly half of all planetary wealth. The richest 300 control as much wealth as the bottom 3 billion. In the US, the wealthiest 20 percent control 90 percent; in South Africa the top 10 percent control 80 percent. Inequality rules.
Only the elite benefit. That we lead the world in inequality, amid our plenty, should raise alarms. Frustration grows at the lack of visible change, evidenced by service delivery protests and crime. We obviously cannot employ people in an economy driven by jobless growth.
When Rifkin wrote The End of Work, he suggested increased unemployment through efficiency may create a more leisurely, egalitarian system. He was wrong. Jobless growth has driven unprecedented wealth concentration and greed. The plutocracy has sequestered up to one-third of the world's total estimated wealth in tax havens and other financial black holes. …