Showing posts with label Money and Wealth. Show all posts
Showing posts with label Money and Wealth. Show all posts

Thursday, August 25, 2011

Who is fit to lead the moral regeneration of a broken society?

If you are anywhere in the British Isles, it is difficult to think about anything else this week than the riots that flared up across England. The wanton looting and extensive property damage were not only ferocious, but pervasive, stretching across a range of cities, suggesting a deep-seated problem.

Explanations for the riots have varied. During the riots, Conservative British Prime Minister David Cameron claimed the riots were pure and simply criminality. However, in a speech after the riots, he backtracked slightly. Although he felt the behaviour of the protestors and the influence of gangs, particularly, were still the main problem, he acknowledged a plethora of other causes for a broken society.

These included problems in the education system and family breakdown, and, as a result, he promised to transform the lives of around 120 000 families and parents. He talked of a “slow-motion moral collapse”. He acknowledged the need to show higher moral standards across society, noting the banking crisis, the abuse of expenses by UK Members of Parliament (MPs) and the phone hacking carried out by journalists as examples of “greed, irresponsibility and entitlement”. In essence, he called for tougher security measures and a social fightback.

That said, he did not feel that race, government cuts or poverty were the main causal factors. In contrast, Labour leader Ed Miliband said inequality was a factor, and he, too, noted that rioters were greedy, immoral and selfish, much like some bankers, MPs and journalists. He felt a commission of inquiry and national conversation were necessary to address the issue.

Despite the eloquent words of both politicians, however, as I read through the speeches, I found myself feeling somewhat queasy. The reason for this was that I struggled to believe the promises implicit in either analysis.

Will the lives of thousands be turned around? Will the gap between the rich and poor narrow? Will bankers, who were bailed out, ever pay taxpayers back or have their bonuses curtailed? Would another commission uncover the truth? I doubt it.

Maybe I am cynical and my jaded view of the world is not fair on politicians who, in many cases, are doing their best. But if I feel like this as I read the speeches on my shiny Macbook, in my middle-class suburban home, how estranged must people without my level of social security feel?

I am not sure if politicians in the UK, and South Africa for that matter, realise how little faith the vast majority of the public have in them. Everyday, it seems to me, ordinary folk feel they have less and less chance of influencing the direction of the State.

Iraq War Protestors London
15th February 2003
Credit: Simon Rutherford / CC BY
In Britain, when a million people marched against the Iraq War, they were ignored. When the public were morally outraged at MPs fiddling their expense claims, a few MPs were prosecuted, but most were given the chance to pay the money back (maybe the looters could also get off if they returned their goods?).

In South Africa, when people voice their opinion about government corruption, they are deemed racists or sell-outs. Or, when black South Africans point to the excesses of white businesses living large on apartheid gains, they are dismissed as misguided insurrectionists.

Feeling estranged from the State, especially a democratic State, does not fully explain or justify violent riots and unrest, but my point is that I fear that those in power have not grasped the disconnect between themselves and the populace. This makes any talk of political leaders leading the charge in repairing the social and moral fabric of society sound farcical.

Moral and community reconstruction is not something you can do to others. Fixing a moral collapse starts, in the throwaway words of popstar Michael Jackson, with the man in the mirror. This means questioning your own moral compass, acting against injustice, toning down the rhetoric and throwaway solutions, and taking more time to listen to others respectfully.

This article by Brandon Hamber was published on Polity and in the Engineering News on 25 August 2011 as part of the column "Look South". Copyright Brandon Hamber.

Friday, August 3, 2007

The woes of 'affluenza'

In his 1895, novel The Time Machine, HG Wells takes McEnroe’s view of affluenza to its logical (if not hyperbolic) conclusion. The novel centres on a time traveller, who travels forward in time into a world where the previously rich, because of their sedentary lifestyle, have devolved, rather than evolved, into a docile and ineffectual species called the Eloi. Members of the working class, in turn, have mutated into bestial creatures called Morlocks. The Morlocks live underground and toil to keep the Eloi’s world ticking over and bountiful. The twist, however, is that the Morlocks eat the Eloi from time to time to survive. Oddly, however, all have adapted to their roles and the strange world works with a de facto class structure still in place.

Of course, the real world is not as straightforward or as fantastical as Wells’s make-believe world. Many scientists and businesspeople come from wealthy homes and continue to evolve up the prosperity ladder. Some are even philanthropists. Children of high achievers, especially those that have to continue to work hard to maintain a middle-class lifestyle, are usually very motivated. They are not simply modern Elois. It is equally problematic to paint the working class as inherently brutish.

That said, children born into wealth, who do not need to work to keep their comforts, are, arguably, becoming more Eloi-like. The celebrity world is filled with the offspring of the wealthy who are layabouts with little social utility, typified by Paris Hilton, heiress to the Hilton Hotel fortune.

Now I am not recommending that the working class devour the rich or Paris Hilton, particularly. Publicly endorsing cannibalism seldom wins friends. But McEnroe’s comments and Wells’s novel provide food for thought.

Are sections of the wealthy slowly sinking into Eloi-like uselessness because people are too comfortable? Is the growing wealth gap alienating the needy from the world of cappuccinos and coffee shops, trapping them in a destitute and brutalising world? Will this, in turn, lead to violent revolution? Or is Wells’ two-tier world of haves and have-nots, which ‘functions’ in a perverse cycle of mutual dependence more realistic?

In terms of the latter, I was thinking of writing a science-fiction novel. The story will centre, as unrealistic as it might sound, on a world made up of people who have no choice but to work like slaves for $1 a day. These unnamed individuals work in dark sweatshops to create clothes with fashionable labels on them for others who inhabit air-conditioned shopping malls seldom seen by the sweatshop workers. The people in the malls lust after the clothes with fashionable labels, but only get temporary satisfaction from each purchase so they continually demand more clothes and varied styles. In turn, the sweatshops grind on indefinitely.

This article by Brandon Hamber was published on Polity and in the Engineering News on 3 August 2007 as part of the column "Look South". Copyright Brandon Hamber.

Friday, May 18, 2007

Will more billionaires help the poor

Every year, in the UK, a ‘rich list’ is published that outlines the names and fortunes of the richest people in the country. Lakshmi Mittal, the steel magnate, who is also the richest company director listed on the JSE, tops the UK list with a personal fortune of £19,25-billion. The top 1 000 rich people have a combined wealth of nearly £360-billion.

The UK Sunday Times also publishes a rich list of those under 30. Those involved in sport, film, fashion and pop dominate the list, with 65 of the 100 occupying these worlds.

The 2007 list also confirms that the superrich are getting richer. The number of billionaires in the UK rose from 54 to 68 between last year and this year, with the top 1 000 richest people’s wealth increasing by 20%. Over the last decade, there was a 260% rise in the wealth of the richest, compared with the 120% average wealth increase for the population as a whole.

So what does all this tell us?

Firstly, it proves the adage that the rich do indeed get richer. Secondly, fame, sporting prowess and celebrity are now surprisingly seen by most young people as a stepping stone to wealth, hence the obsession with TV talent shows. This feeds the obsession with celebrity status both on and off the sports field. Celebrity is seen as a quick financial fix.

Interestingly, however, 75% of those on the UK rich list have a university or college education. When the list was first launched in 1989, 75% of those on it were wealthy because of inheritance. Today, 78% of those on the list have made their money through business. This suggests that hard work does pay. But this does not mean that everyone has an equal chance of doing well. Those with access to education will do better. Not to mention that 90% of those on the UK rich list are men. Although there is a growing number of Asians on the British rich list, black faces are few. Clearly, the glass ceiling for women and for most ethnic minorities is alive and well in the UK.

South Africa has an even bigger problem owing to a massively distorted past in terms of access to wealth for blacks and whites, and men and women.

Transformation in the boardroom is, however, under way. Currently, 405 black South Africans hold 558 of the 3 125 director positions on South African listed companies. Black company ownership has moved from 0% to 10% in ten years, and the incomes of the richest black people have risen by 30%.

This suggests that wealth is slowly being shared, to a degree. Broadly, this is a step in the right direction, even though there is a long way to go. With time, South Africa will, no doubt, have its own, hopefully representative and rainbow coloured, rich list. But, if South Africa follows the UK, perhaps the real question is whether a growing number of billionaires, black or white, will really make a difference to the lives of the less fortunate?

In the UK, the wealthy are quick to point out that £1,2-billion was given to benevolent causes by the top 30 philanthropists alone in the past year. But about 25% of South Africans, almost exclusively black, have little chance of getting a job, let alone making it into the so-called middle class, or becoming superrich. Will charity, which domestically in South Africa is appallingly low, anyway, be enough to change this situation? I doubt it.

To be honest, studying the rich list over the last few days has left me a bit queasy. I strongly agree with the need for the economic pie in South Africa to be deracialised and for the economy to keep growing. However, I am left wondering, especially when growth largely benefits those at the top of the pile, exactly how this will make a difference to the poorest of the poor.

This article by Brandon Hamber was published on Polity and in the Engineering News on 18 May 2007 as part of the column "Look South". Copyright Brandon Hamber.

Friday, August 18, 2006

Get rich or die trying

In the US and Canada, each State has a slogan under the number plate of cars registered in it. For example, Washington, DC, plates have the phrase ‘Taxation without representation’ on them, making reference to the State’s lack of voting representation in Congress. Nova Scotia plates have the less political ‘Canada’s Ocean Playground’ emblazoned on them. On a recent trip to South Africa, this got me wondering what might be an appropriate slogan for Gauteng, where Johannesburg is located. After a short drive through the city, the answer was clear: ‘If you’ve got it, flaunt it’. Desperate poverty sits uncomfortably next to excessive and unabashed wealth. South Africa is now 120th out of 177 countries on the UN index that measures the rich-poor gap. It has dropped some 30 places since 1995. Yet, as Abraham McLaughlin, of the Christian Science Monitor, reported recently, nearly 7% of all new cars bought in the country are BMWs. This makes it the second-highest per-new-car sales of BMWs in the world, fractionally behind Germany’s 8%. Car sales in South Africa increased by 25% last year, the biggest increase in the world. But is this not a good thing? On some level, it reflects the rapid economic growth in the country, which is getting close to 5%, according to some sources. Wealth is slowly deracialising. Life is booming for those who can get a seat on the gravy train. Johannesburg is going through a second gold rush. At the same time, this has led, according to President Thabo Mbeki, to wanton consumerism. At the fourth annual Nelson Mandela Lecture recently, he noted: “The demons embedded in our society, that stalk us at every minute, seem always to beckon each one of us towards a realisable dream and nightmare . . . with every passing second, they advise, with rhythmic and hypnotic regularity, ‘Get rich! Get rich! Get rich!’ And, thus, it has come about that many of us accept that our common natural instinct to escape from poverty is but the other side of the same coin on whose reverse side is written the words, ‘At all costs, get rich!’” South Africa is not the only place in the world where consumerism is all-encompassing, but it specialises in pretension. As a friend mentioned to me, life is measured by the three Cs – car, credit card and cellphone. It is a national obsession.

Although the term ‘conspicuous consumption’, coined in 1899, is somewhat outdated, it seems alive and well in the not-so-new South Africa. The term, according to Wikipedia, is used to describe lavish spending on goods acquired mainly for displaying wealth as a form of social status. Sociologist Zygmunt Bauman sees consumerism as even more insidious. He talks of a ‘consumerist syndrome’. Gratification has to be immediate and consumerism is all-pervasive in our relationships, attitudes, thoughts and visions of happiness. This is typified by the way liberation is sought through the power of ‘things’. It may sound melodramatic, but has liberation in South Africa been commodified? Of course, I do not bemoan people’s success or regret that more people are sharing in the profit pie. Economic growth is needed. I am also not laying the blame for consumerism with the government, or the rising black elite. It is much more pervasive than that. Ostentation knows no racial or class boundaries in South Africa. But it has its cost.

As Mbeki notes, the ‘get rich’ mantra is doing something to the essence of humanity in the country. Rampant consumerism and the ‘get rich or die trying’ mentality are great bedfellows. Violent and white-collar crimes are the natural extension of this. At the risk of sounding like a conservative moralist, Mbeki is right when he calls for an RDP, or reconstruction and development programme, of the soul for all South Africans. Luxury cars, flashy houses and cellphones can never be enough.

This article by Brandon Hamber was published on Polity and in the Engineering News on 18 August 2006 as part of the column "Look South". Copyright Brandon Hamber.

Friday, May 26, 2006

The meaning of money

There is something about money I do not get. I understand bartering. Two people exchange things that have roughly equal value. But modern money as a concept makes little sense. Milton Friedman, in Money Mischief, writes that money, as we know it, has no intrinsic value and what gives it value is that it is used for exchange. He goes on to say that the value is what we attribute to it, and all money is ‘credit’ money, a contractual IOU for an incomplete exchange. As Aristotle said, the value of money is “derived not from nature, but from law”.

So money is made by the meaning we give it yet, at the same time, it apparently makes the world go around. If you do not have it, your life can be miserable. Nevertheless, money or, to be precise, currency, which is the physical embodiment of the idea of money, cannot buy happiness – only a new iPod or a fridge. But the more money one is talking about the less concrete the notion gets. Bill Gates, for example, is apparently worth $27-billion, but he does not have $27-billion dollars in the same way a person has 1 000 cattle.

He is a rich man with jets and houses but, mainly, he has more IOUs than the rest of us. His bank does not have a vault with $27- billion crisp $100 bills in it, ready for Bill to dive into whenever the urge takes him.

Governments have enormous amounts of unseen money. At a government level, finance is based on promises and IOUs. It is about shuffling budgets of virtual money and meeting obligations. These obligations boil down to where they want to commit make- believe dosh. These choices can have tragic and visible consequences.

Money means different things to different people. I recall working with a community group in South Africa and discussing a grant to support people around the truth commission. One community member commented: “We have been thinking that we don’t want to use the money for that – rather, we want to share the grant out between us.” The group would have preferred an instant R500 each rather than a long-term, less tangible benefit. Money as a thing, or at least the objects R500 could buy when you are poor, was more important. The man had a point, but the donor would have seen it differently. Donor and grantee had conflicting desired outcomes. But what determines these outcomes? Who controls these fantasy purse strings? A recent report in the UK claimed that lack of resources in the security services led to the London bombings last year. But at the same time the country spends £3-billion a year on the occupation of Iraq. The US government finds $100-billion a year for its Iraq folly. When the amounts of money get this astronomical, the meaning of the money becomes even more ephemeral. The only way to make sense of it is to break figures down into numbers we think we can compute. My calculations go like this: the UK and US governments are spending roughly $110-billion a year in Iraq. This is five times the gross domestic product (GDP) of Mozambique and is the equivalent of about 20% of the annual GDP of South Africa.

But even more staggering is that the money invested in making this war is more than the Iraqi GDP, estimated at $97-billion in 2005. Does this incredible statistic make sense to anyone? I once met a businessperson who told me he owed his bank half a million pounds, or R5-million. I remember thinking he was the only person I knew who was rich enough to be half a million pounds in debt. Does that make sense to anyone? Answers on a postcard, please.

This article by Brandon Hamber was published on Polity and in the Engineering News on 26 May 2006 as part of the column "Look South". Copyright Brandon Hamber.

Friday, November 7, 2003

South Africa: Special report on widening poverty gap

South Africa has made significant gains since the advent of democracy in April 1994. However, the country still faces serious problems. The most significant one - apart from the impact of HIV/AIDS - is the lack of economic and social rights for a large sector of the population. Research undertaken by a project team in the office of President Thabo Mbeki, assisted by the Department of Social Development, has attempted to capture the essence of the problem. Their report, titled "Towards A Ten Year Review", seeks to quantify the performance of the state in its constitutional obligations to its citizens, and its progress in redressing apartheids injustices. While the government's performance in provision of health, education and other basic services has been commendable, the report notes that "two economies persist in one country". More...

Tuesday, July 8, 2003

Top 100 Corporate Criminals of the Decade

Every year, the major business magazines put out their annual surveys of big business in America. You have the Fortune 500, the Forbes 400, the Forbes Platinum 100, the International 800 -- among others. These lists rank big corporations by sales, assets, profits and market share. The point of these surveys is simple -- to identify and glorify the biggest and most profitable corporations.The point of the list contained in this report, The Top 100 Corporate Criminals of the Decade -- is to focus public attention on a wave of corporate criminality that has swamped prosecutors offices around the country.Find out about the Top 100 Corporate Criminals of the Decade.