The "pain of inequality": how the psychological and the economic intersect to maintain the most unequal society in the world

“At the heart of the explanation [for the persistence of poverty and inequality in South Africa] is the relationship between structural reality and psychological features,” argued Prof. Crain Soudien, HSRC CEO, at a public lecture on 4 March. According to Soudien, the psychological effects of social structures based on race and gender, and the pain of inequality, must be recognised alongside economic mechanisms to fully explain South Africa’s persistent inequality. By Andrea Teagle.

In South Africa, over 50% of people live beneath the poverty line. With a Gini Coefficient of 0.7, the country has the highest inequality in the world. Since 1994, there have been some improvements. Absolute inequality has declined, for example. If we were to evenly distribute the country’s total wealth, each person would own R104, 618 (€7,080) in assets. However, in reality, the person midway between the two richest and poorest individuals owns almost 7 times less than this figure, according to the Allianz Global Wealth Report 2017. Put differently, mean wealth is nearly 700% greater than median wealth, indicating that nearly all of these resources are clumped right at the top end of the income spectrum. And the gap is widening. 

Worldwide, the trend doesn’t look all that different. Economic explanations for this increasing wealth polarisation tend to look at structural features of the neoliberal economy. For example, Soudien noted, economist Thomas Piketty’s appealingly simple explanation is that the wealth of the richest expands disproportionately. Or, r > g (where r = annual average rate of return on capital investment and g= growth of economy.) Wealth begets wealth. The dice are loaded. Any inequality at time t is going to be far more extreme at time t+1.

But, there is more to it than that, Soudien argued this week at the first in a series of public lectures to commemorate the 50th anniversary of the HSRC. 

“Economic factors have been absolutely decisive in the production of the divides between the rich and the poor, but… they have been dependent on and been accompanied by powerful ideological processes,” Soudien said. South Africa’s psychological landscape has a unique topography sculpted over decades of institutionalised oppression.  

Deterministic models like Piketty’s fail to make room, conceptually, for the interactive effects of the psychological elements of inequality on marginalised, vulnerable and disadvantaged people operating in these markets, or for their agency. Clearly, the lines along which inequalities are drawn are not arbitrary, and in each country will look a little different. They are racial, they are gendered, they are along ethnic and other lines, and they don’t work in isolation.

As Soudien’s fellow speaker at the lecture, public finance economist Dr Tania Ajam, noted, the face of poverty in South Africa is, overwhelmingly, black and female.

Soudien argued for the inclusion of structural intersectionalism in attempts to explain, and to make recommendations for reducing, poverty in South Africa. Structural intersectionalism refers to the complex and sometimes unexpected ways in which social structures that produce different social groupings – e.g. race and gender – intersect to affect marginalised people.

Quoting the feminist Zillah Eisenstein in her review of Piketty’s explanation of class divisions, Soudien also said, “Capital is intersectional. It always intersects with the bodies that produce the labour. Therefore, the accumulation of wealth is embedded in the racialised and engendered structures that enhance it.”

The ways in which the resultant inequalities are internalised, or “the pain of inequality” as Soudien puts it, also act to reinforce the status quo. And South Africa’s psychological landscape is a product of both the racial stratification of the past and – as noted by Ajam –  the perpetuation of exclusion mechanisms under the current regime. Re-centering the discussion on structural mechanisms that reinforce inequalities, Ajam argued that the current regime is marred by lost opportunities: state capture, and consecutive budgets that are not pro-poor.

Inequality of wealth and opportunity – or resource inequality – acts in conjunction with and is compounded by other kinds of inequalities, Soudien argued. These interlinked inequalities, conceptualised by the sociologist Goran Therborn include vital inequality (health and life expectancy) and non-material, existential inequality. The first are easily quantifiable and frequently recognised in economic models; the second, referring to dignity and personhood, less so. Yet, a growing body of research suggests that the related concept of low perceived social status is linked to negative health outcomes -- in fact, it’s a better predictor of health than objective social status. 

“Through the unequal allocation of recognition and respect, the existence of different degrees of freedom to act, and the effects of hierarchies of self-respect and self-confidence, social-status hierarchies appear to be a major underlying reason for persistent inequalities of health and life expectancy,” Therborn writes.

This holds true even when researchers account for differences in access to healthcare, food security or other relevant differences. That is, even in the absence of material need, perceived relative deprivation increases a person’s risk for illness. That’s because, until quite recently in human history, social inclusion was imperative for survival. Marginalisation thus causes chronic psychosocial stress, increasingly shown to affect everything from mental wellbeing to cardiovascular health. Not surprisingly then, in such an unequal society, and in line with other research, a recent HSRC study lead by PhD candidate Chipo Mutyambizi, found a strong link between perceived social subordination and depression in South Africa. How does the pain of inequality affect how an individual approaches life? How might it affect her confidence, her career choices, her ability to imagine herself differently from the picture society has painted of her?

In this sense, wealth and the various inequalities are by their nature compounding. They are both structurally self-perpetuating, as Piketty shows, and through psycho-social mechanisms, they reduce the ability of marginalised individuals to respond in ways that narrow the gap.  This recognition of the psychological facets of inequality is somewhat reminiscent of the writings of Steve Biko, who famously argued that the most potent weapon in the hands of the oppressor is the mind of the oppressed.

However, Soudien argues the need to recognise the agency of the subjects of structural injustice. “If one works with the fullness of intersectionality and the idea that people are not simply subjects of the economic environment… if one begins to accord to the psychological and ideological a certain degree of independence, how does one begin to explain racial effects as not simply things which happen to people, but which people are required to respond to?”

This is critical because it suggests that these responses can change. How do we recognise and respond to these psycho-social effects, and how do we support people to be empowered in this context? Will changing people’s material circumstances, Soudien asks, be enough to change their social and psychological approaches to life?

“If we are to take a deeper analytic excursion into the intersectional nature of poverty and inequality in South Africa, then it is vital that all the other debilitating, distantiating mechanisms that operate in the country—not least the multifaceted gender order -- are brought into clear focus… We stand on the cusp of an important opportunity…for explaining to ourselves, and to the world, how it is that we begin to emerge out of [poverty and inequality].”