Despite two decades of rule by the African National Congress (ANC), income inequality in South Africa is sky-high. Indeed, it is higher now than it was at the end of apartheid. Blacks make up 80 percent of the population, but according to census data they earn one-sixth of what white citizens earn on average.
Two weeks ago, Thomas Piketty, the French economist renowned for his pathbreaking book “Capital in the Twenty-First Century,” visited Johannesburg to give the 13th Nelson Mandela Annual Lecture. He explained South Africa’s persistent inequality by pointing to the fact that it had never undertaken large-scale land redistribution. In much of Europe and East Asia, he said, forcible land redistribution had opened the way for greater equity and economic development—adding that South Africa has never done so.
My research shows that Piketty is right. The redistribution of land has launched economic growth in many – though hardly all – countries where it has been implemented. It has also dramatically reduced inequality in countries where it has been carried out at a large scale.
And South Africa’s failure to redistribute land can be felt everywhere. At the end of apartheid, 60,000 white farmers held 86 percent of all farmland. Thirteen million blacks held the remaining poor-quality land, many of whose forebears had been dispossessed through such racially discriminatory practices as the 1913 Native Land Act. Those poor farmers have repeatedly been promised that their land rights will be restored—but those promises have not been filled.
It takes a dictator to redistribute land.
However, redistributing South Africa’s land on a grand scale may be very difficult to achieve. Land redistribution almost always occurs under dictatorship.
Data I collected for my recently published book, “Autocracy and Redistribution: The Politics of Land Reform,” show that more than a third of all countries in the world redistributed land in the last century—and more than 80 percent of those did so under dictators. China, Russia, Mexico, Peru, and neighboring Zimbabwe illustrate this well. The few times that land was redistributed under democracy – as in Italy in the late 1940s and early 1950s, and Spain during the run-up to its civil war – did so on a very small scale.
Democracy protects property.
That’s because of the mechanics of democracy. By creating horizontal checks and balances that require supermajorities for major policy changes, democracy often prevents individuals’ property rights from being violated – which is typically required for large-scale land redistribution.
Indeed, blocking any reforms that threatened those with property was precisely the outcome that our Constitution’s framer James Madison had in mind for shielding landowners and businessmen in the early United States from transgressions by the “tyranny of the majority.”
Under democracy, large landowners are the first roadblocks to land reform, whether by pushing to strengthen the judiciary, backing legislators sympathetic to their cause, or levying endless lawsuits against reform laws.
That’s been true in South Africa. Many South Africans are frustrated that their democratic institutions are holding back serious land reform. Two-thirds of black South Africans believe that land must be returned to them regardless of the consequences for political stability.
South Africa has tried the World Bank’s approach to redistributing land. Not much land has changed hands.
That immense popular pressure has yielded some concrete results. In 1994, South Africa instituted a market-based willing-seller/willing-buyer reform, much as had been recommended by the World Bank. Through this land negotiation program, now known as the Land Redistribution for Agricultural Development (LRAD) program, the South African government purchases voluntarily offered private farmland at market value rates up front in cash and then provides grants to farmers that enable them to purchase land. LRAD and other programs peacefully guided the transfer of 4.2 million hectares to black farmers between 1994 and 2007.
But that’s far short of the ANC government’s immediate post-apartheid promise to redistribute roughly 25 million hectares of agricultural land. Consequently, the government reopened the land claims process a year ago, and is reformulating an Expropriation Bill to guide the land acquisition and compensation process.
Critics argue that this is merely a return to the inadequate policies of the past two decades. The current land reform system is hardly redistributive in the way Piketty’s examples suggest. Whites whose predecessors took that land by force or under racist laws get market-rate compensation; meanwhile, dispossessed blacks get only symbolic monetary compensation.
Will South Africa try Zimbabwe’s radical forced redistribution in order to get closer to income equality?
Democracy itself is creaking under the weight of popular pressure as a result. Radical land reform advocates such as the Parliamentarian Julius Malema have quit the ANC and are calling for massive land expropriation without compensation, with land returned to those who’d been dispossessed. In an effort to muzzle him, the ANC has hounded Malema and other opposition members using trumped-up legal charges.
Investors, landowners, and farmers alike are waiting anxiously to see what comes next, and neighboring Zimbabwe’s radical land reform — in which president Robert Mugabe’s government seized white-owned farms, appropriated during colonization, and awarded them to blacks — is a topic of frequent conversation.
Tantalizing proposals have been leaking from the labyrinthine South African bureaucracy. The most extreme is that landowners will be forced to cede half their land to workers, with “just and equitable” compensation as payment. Ministers who are asked to clarify what “just” means have given widely varying answers.
If recent history is any guide, landowners will water down the Expropriation Bill and courts will support generous compensation. But if Malema and other ANC critics on land reform continue to grow more popular, the ANC may be forced to ignore court rulings and stifle land reform opponents in an effort to shore up their revolutionary credentials.
The ANC’s increasing monopoly on political power and trammeling of opposition groups across the political spectrum may lead them to authoritarianism, as many have long feared.
Ironically, with fewer institutional constraints, the ANC’s ability to attack its historic foes and respond to popular demand for land redistribution on a grand scale would increase – and with that would come a seismic shift toward greater equality.
South Africans face a choice: democracy and its discontents, including a glacially slow approach to fixing festering social issues such as inequality, or a more equal future forged on the back of a return to dictatorship, this time under the ANC.