The economic
question: What are we even talking about?
We are talking about Black Economic Empowerment, Employment
Equity and so-called economic freedom, often referred to as Economic
Transformation, but while Employment Equity is rather self-explanatory, the
other concepts require some further investigation.
As a political theory or buzzword designed to attract votes,
then notion that black people who were previously excluded from the business
world can be empowered through ownership works brilliantly well, but the
inclusion of the word “economic” makes it rather problematic. In the true text book definition of the word,
having ownership of something does not make one empowered, it makes you rich,
while true economic empowerment can only come from the skills and knowledge
needed to either use your wealth to generate income or in the very least
maintain our gotten wealth. Because of this fact, economic power will always
flow to the person/people in the economy who are most empowered, i.e. the
people who can employ their skills and knowledge the best.
The concept of economic freedom, a buzzword that’s become so
popular that it has spawned a brand new political organization, is a rather new
concept on our political landscape and it is yet to be defined. As far as I can
figure, the political definition of economic freedom entails a system whereby
the people (through the proxy of the State) own all the resources (physical and
financial) in the country with no private ownership and no excessively wealthy
or poor people. In economic terms, this would be called communism, but what
does economic freedom mean when one considers the theory? I’ll admit at this
point that I am nowhere near educated enough to put forward a full definition
of Economic Freedom, but I will state that it entails the “Unhampered pursuit of an individual (and perhaps juristic persons like
companies) to obtain the highest levels of education, employment and wealth allowed
by his/her potential or ability in an homogenous economic system.”
Then we come to the concept of transformation and we can
definitely say that you get transformation and transformation. Many a political
commentator and economist have highlighted the fact that our systemic economic
problem is that it has been built around a small elite that is reaping large
scale economic rewards from a large pool of unskilled labour and, while the
transformation numbers quoted by the SAIRR and Peet van Aardt do indicate
some success in the racial transformation of our economy (more blacks in the
elite), there is little indication of the success/failure with regards to the transformation
of the systemic economic problem we have mentioned. Incidentally, economists
will refer to this transformation as economic development; we develop the skill
base of the general population in order to move from a resource based economy
towards an economy where manufacturing and the rendering of services play the
largest part.
The philosophical question:
When does historical redress become racial engineering?
Like I’ve said before, the initial reasoning behind redress
legislation is beyond debate, but we have reached the point in time where it
becomes a very real possibility that we will start to see “double rounds” of
redress taking place when the children of EE or BEE beneficiaries begin to
stand in line to receive redress as well. The argument that will doubtlessly be
put forward here is that the erstwhile Apartheid System gave its beneficiaries
preference for centuries with no regard for double or even ten rounds, with no
“sunset clause” in sight. It has been brought to my attention that there is
indeed a large knock on effect with current EE and BEE legislation whereby the
empowered also use their wealth to empower members of their extended family,
but this is certainly not a new or a black only phenomenon. As a matter of
fact, the knock on effect from Apartheid legislation is still painfully
apparent today, but in today’s political climate and vernacular this often
forms part of what is referred to as white privilege.
While what happened before surely does not take anything
away from the validity of these arguments, it certainly cannot be called
redress when we attempt to ensure the future financial/professional success of
a child who has had every opportunity to secure his/her own success in the same,
and often better, circumstance as their counterparts. The only success that
will be had with such a system is that it will further strengthen the economic
elite at the cost of the poor, so ultimately, the possibility and inevitable
occurrence of double redress becomes a social question.
The social
question: Who is benefitting and who should benefit?
Up until now, and most likely for the foreseeable future, we
have not yet seen any indication of who the major beneficiaries of our redress
system have been and it is thus impossible to monitor the general success of
the policies and legislation. Specifically, we must consider whether the
majority of beneficiaries are the politically well-connected or the ordinary
“grassroot” people of the townships and while there is certainly nothing wrong
with a politically connected person or even an ANC member reaping the benefits
of redress legislation, it would simply be wrong for that person to gain those
benefits purely because of political connections and it saddens one to state
that this does seem to be the case, if we are to take a look at the staggering
value and instances of Government corruption, tenderpreneurship and openly
practiced policy of cadre deployment. Some people will even go as far as to say
that certain members of the ruling party have hijacked this system in order to
pay for political favours or support. For those who are interested, here is a
report from Business
Day on how large scale BEE deals really work.
The simple question we need to answer is whether it would be
proper or even moral for us to allow for the continued upliftment of black
people on account of being black or if we should rather focus on uplifting
people because they are poor and I remind you that cutting a pie into more
pieces does nothing to enlarge the pie. I leave you with the concluding
paragraph of the SAIRR report.
“The report suggests that turning these figures
around will depend on the three Es – education, entrepreneurship, and economic
growth – the only way in which real empowerment can occur, particularly for
those who were disadvantaged by the racial policies of the past. Future
progress may therefore come to depend less on racial policies such as Black
Economic Empowerment and more on ensuring access to sound education while
fostering a climate conducive to economic growth.”