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AT LAST at last, a rich man has said some of the things that really need to be said. Have you seen Nick Hanauer’s letter to his “fellow flighty rich Americans”?
First of all, he acknowledges that his wealth is not the natural and just reward for being some shining example of uber-humanity: “I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student.
"I’m not technical at all—I can’t write a word of code.” (All right, he’s not the very first rich guy to say something like this – Warren Buffett, who’s worth far more than Hanauer, once noted that a lot of his success was due to the society he lived in.)
Far too many of the rich and the filthy rich discount the role of luck and happenstance and privilege in their lives. “I worked for everything I’ve got,” they’ll tell you. I’m not sure that any human being is capable of working hard enough to provide the value embodied in an annual income of R17.6m in one year.
But, says Hanauer, “Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society.
"Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
“And so I have a message for my fellow filthy rich […]: If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality.
"In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.”
This is what I find hugely worrying about the inequality of the landscape in South Africa, and how business, middle class citizens, the obscenely wealthy and the powers-that-be respond to it.
There’s a defensive anger in the air – you see it in letters to the newspaper, comments on online articles, columns by pundits, reactions by parliamentarians: how DARE these miners/metalworkers/you name it ask for double-digit increases? Don’t they realise they’re dispensable?
Them with their manual labour and nothing else to offer in an economy where the scarcest commodity is a job! Do they realise they’re destroying the economy? We’re heading for junk status, and it’s all their fault!
Well, no. Because when you think this way, you are hiding from a truth that Nick Hanauer enunciates very clearly: an economy is not just shares. It’s not just exporting commodities to other huge multinationals. An economy is a living ecosystem which in every country I can think of rests on the foundations of the economic activity of ordinary people.
The businesses of Rustenburg, for instance, have felt the pain of extended strike action – because lots of them, from fast-food franchises to clothes outlets, make their profits off sales to the miners and their families. With no wages coming in, there was no money for fried chicken or hot chips.
Instead of resisting higher wages, big business and the country as a whole should be thinking about the possible consequences – the positive consequences – of a higher minimum wage. And then thinking about how best to implement that.
“The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren’t only cheap labour to be exploited; they were consumers, too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts,” says Hanauer.
“What a great idea. My suggestion to you is: Let’s do it all over again. We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.”
The more money there is floating around in very poor communities, the better the country as a whole does. Give an above-inflation increase to a worker whose labour is supporting an extended family, and you feed the local economy: hair salons will profit from the additional requests for weaves, for example, that the family just could not afford before.
If that worker is one of a few thousand in the community who benefits from improved wages, who knows how many additional staff will need to be employed by hairdressers? Who will then no longer be reliant on social grants – they’ll have the dignity of work. They’ll buy things from retailers; they’ll send their kids to tertiary education; they’ll start paying tax.
The benefits will trickle up – it’s the way it’s happened before.
Hanauer focuses on the middle class; I believe this works just as well applied to the working class. “…the data show that when workers are better treated, business gets better.”
Yes, of course it’s complex, but heavens, we’re not doing very well on business-as-usual. Can’t we apply some creative thinking and find different ways of tackling poverty and unemployment?
Find the full text here.
- Fin24
*Mandi Smallhorne is a versatile journalist and editor. Views expressed are her own. Follow her on twitter.
First of all, he acknowledges that his wealth is not the natural and just reward for being some shining example of uber-humanity: “I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student.
"I’m not technical at all—I can’t write a word of code.” (All right, he’s not the very first rich guy to say something like this – Warren Buffett, who’s worth far more than Hanauer, once noted that a lot of his success was due to the society he lived in.)
Far too many of the rich and the filthy rich discount the role of luck and happenstance and privilege in their lives. “I worked for everything I’ve got,” they’ll tell you. I’m not sure that any human being is capable of working hard enough to provide the value embodied in an annual income of R17.6m in one year.
But, says Hanauer, “Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society.
"Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
“And so I have a message for my fellow filthy rich […]: If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality.
"In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.”
This is what I find hugely worrying about the inequality of the landscape in South Africa, and how business, middle class citizens, the obscenely wealthy and the powers-that-be respond to it.
There’s a defensive anger in the air – you see it in letters to the newspaper, comments on online articles, columns by pundits, reactions by parliamentarians: how DARE these miners/metalworkers/you name it ask for double-digit increases? Don’t they realise they’re dispensable?
Them with their manual labour and nothing else to offer in an economy where the scarcest commodity is a job! Do they realise they’re destroying the economy? We’re heading for junk status, and it’s all their fault!
Well, no. Because when you think this way, you are hiding from a truth that Nick Hanauer enunciates very clearly: an economy is not just shares. It’s not just exporting commodities to other huge multinationals. An economy is a living ecosystem which in every country I can think of rests on the foundations of the economic activity of ordinary people.
The businesses of Rustenburg, for instance, have felt the pain of extended strike action – because lots of them, from fast-food franchises to clothes outlets, make their profits off sales to the miners and their families. With no wages coming in, there was no money for fried chicken or hot chips.
Instead of resisting higher wages, big business and the country as a whole should be thinking about the possible consequences – the positive consequences – of a higher minimum wage. And then thinking about how best to implement that.
“The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren’t only cheap labour to be exploited; they were consumers, too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts,” says Hanauer.
“What a great idea. My suggestion to you is: Let’s do it all over again. We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.”
The more money there is floating around in very poor communities, the better the country as a whole does. Give an above-inflation increase to a worker whose labour is supporting an extended family, and you feed the local economy: hair salons will profit from the additional requests for weaves, for example, that the family just could not afford before.
If that worker is one of a few thousand in the community who benefits from improved wages, who knows how many additional staff will need to be employed by hairdressers? Who will then no longer be reliant on social grants – they’ll have the dignity of work. They’ll buy things from retailers; they’ll send their kids to tertiary education; they’ll start paying tax.
The benefits will trickle up – it’s the way it’s happened before.
Hanauer focuses on the middle class; I believe this works just as well applied to the working class. “…the data show that when workers are better treated, business gets better.”
Yes, of course it’s complex, but heavens, we’re not doing very well on business-as-usual. Can’t we apply some creative thinking and find different ways of tackling poverty and unemployment?
Find the full text here.
- Fin24
*Mandi Smallhorne is a versatile journalist and editor. Views expressed are her own. Follow her on twitter.
