The continued institutional reproduction of inequality is a matter of growing concern in vast parts of the world. This concern manifests differently in different regions. It is evident in protests, uprisings and unrest.
Our research asks how and why inequality manages to be reproduced, and what role organisations play in maintaining exploitative labour practices.
To answer these questions, we zoomed in on a particular case of conflict in South Africa: the 2012-2013 farmworker strikes in the Western Cape, where protests turned violent over a protracted period.
Inequality has continued to rise in South Africa even though the 1994 democratic transition was intended to usher in a new era that would undo the legacy of colonialism and apartheid. The country’s Gini coefficient, which measures income inequality, makes it among the most unequal in the world.
We collected data from face-to-face semi-structured interviews with farmworkers, farmers and other key stakeholders who were active participants in the conflict. We also used focus groups and archival research.
Our findings provide an explanation about the institutional logics (the belief systems underpinning how institutions operate) for stubborn systems of inequality and oppression that remain in place even after transitions promise more equality. We see how actors and organisations exercise power in ways that legitimise unequal access to resources and opportunities. It becomes clear why this can result in the persistence of inequality.
Here’s an example. Although slavery officially ended in America with the passing of the 13th amendment in 1865, white southern elites were able to block economic reforms that might have undermined their interests and found alternative ways of disenfranchising freed slaves.
In South Africa’s case the transition from apartheid to democracy in 1994 led to the adoption of a liberal constitution in 1996. This presented a new set of rules that entrenched de jure protections and an extensive Bill of Rights, including socio-economic rights. The new dispensation promised the beginning of equality.
Yet nearly 27 years later, the de facto rules often mirror the gross inequality of apartheid. This has led many to question the incomplete nature of the transition. As one of our participants explained:
How can we speak about a new democracy? … Apartheid is just now in a different way. It is still apartheid.
Tensions between the old and the new
The tensions between de facto and de jure institutions had been building up for years and culminated in various violent conflicts in 2012. The farmworkers’ strike was one of the most prominent.
The immediate cause of the conflict was linked to working conditions and wages on farms in the region. But it was also representative of the complex and often conflicting dynamics between the persistence of the old and the challenge of embedding new actors contesting the status quo.
In our study we found a range of contradictory factors contributed to the conflict. The incumbent apartheid logic, which institutionalised a system of racial hierarchies, was still pervasive. The 1994 settlement (and its protection of existing property rights) in effect froze economic relationships at a point in time. On the one hand were the owners of capital with what had been apportioned them under apartheid. On the other were the workers – racially defined and previously dispossessed.
As a result, beliefs underpinning the primacy of markets and market economies legitimised old practices by highlighting the importance of economic and food security in the country.
Challenging this notion were people calling for social justice to prevail. They were seeking equality in terms of political as well as economic rights.
For example, farmers based their reluctance to fully accede to workers’ demands on a business imperative and market logic. They saw the conflict over wages and working conditions as an attempt to undermine their property rights and part of a wider political orchestration to bring about more radical, populist economic transformation.
In their search for a market solution, farmers increasingly resorted to outsourcing and short-term labour contracts. This enabled them to circumvent laws seeking to protect farm workers.
In addition, they engaged in limited negotiations with the farmworkers whose family ties stretched back generations. In these engagements farmers drew on a historically defined paternalistic relationship. This meant cutting through some of the workers’ solidarity and muddying workers’ sense of community by attempting to create schisms between workers. This increased tensions between insiders and outsiders within the conflict. In turn this allowed the dissipation of opposition and the maintenance of the status quo.
The outcome from the workers’ perspective looks disappointingly similar as both systems default to an exploitation of cheap labour.
Why it matters
Our findings highlight how systems of oppression and exploitation are perpetuated, often under the cloak of an argument for the supremacy of markets. Arguments around economic efficiencies and the paramount importance of property rights are invoked as being essential to investment decisions. And the resultant levels of inequality are justified as meritocratic outcomes of effort and abilities.
The market logic legitimisation in turn makes it more “acceptable” to see the persistence of inequality.
Our case shows the difficulties of establishing new institutional frameworks. It shows why institutional inequality persists as societies accumulate special interests that have little incentive to adjust the status quo – and every incentive to maintain it.
Although our case focuses on South Africa, we see similar struggles in other parts of the world.
Ansellia Adams co-authored this article. She has a background in political economy and development and currently works as an analyst. Her work focuses on the nexus between institutions and development outcomes in developing regions.
Written by John Luiz, Professor of International Business Strategy & Emerging Markets at the University of Sussex Business School, and the Graduate School of Business, University of Cape Town, University of Cape Town