The Oxfam inequality reports once again shows that South Africa is the most unequal society in the world. The two richest people are as wealthy as the poorest 50%. These are worrying figures, and the contributing factors are clearly many. In summary it shows that we have a big poor population, and compared with countries like Germany or the UK, our wealth gap would lead to increased levels of dissatisfaction. But this is where one has to be cautious to not to reach too quick conclusions from the report.

It is very difficult to draw blanket comparisons between nations. South Africa, for example has got a large self-subsistence farming community. They live according to their own traditions. It is very hard to quantify their wealth, which clearly can’t be zero. Since they are only marginally active in the real economy their output is very hard to count, and thus their wealth is normally understated. But I am not sure that they would necessary live a better life if they all learned a trade, become factory workers and live in big cities. South Africa is also unique in the way that we have very complex industrial sectors that easily compete with the best of the developed world. We have a financial sector that seems often a lot more robust and advanced than the European and American peers, since we have very developed and liquid financial markets. We have some of the best engineers and doctors in the world.

Thus while we have a massive wealth gap, we also have a massive skills gap. We have some of the most talented people, while the majority of our population (mainly the young ones) had to endure a very poor educational system. The education system was focused more on providing education for everybody, instead of keeping high educational standards while expanding the system to include everybody. So while most school leavers have not had mathematics (one of the core subjects) and only had to get every third answer right in order to pass their matric, some kids were lucky enough to be in private schools or model C schools,. Those lucky ones probably passed their matric with flying colors and then went on to further their education in Universities and Colleges. Their skills are sought after by established businesses and because they are so scarce they are highly paid. This trend will continue until our quality of education to everybody increases.

So while we are topping the list of most unequal societies, it should not be seen as how to make to wealthier poorer (by increasing Taxes or other social burdens), instead it should be seen as how to give the poor masses the opportunity to earn more money. Clearly a better quality of education will have a major impact.