Ripples of doubt
On the 20th of June this year Mr John Kane-Berman, a Policy Fellow at the IRR, published a criticism of the Democratic Alliance (DA) on Politicsweb. A day later Mr Mabine Seabe who serves as the spokesperson for the leader of the DA, Mr Mmusi Maimane, published a response that appeared, for a time, online where it was read and brought to the attention of the IRR. What follows below is our response to Mr Seabe’s article of 21 June.
There are two profoundly significant points that emerge from Mr Seabe’s initial response to Mr Kane-Berman.
The first is the DA’s apparent view that structural racism is a reason why many black South Africans remain poor and unemployed. The second, following from the first, is that race-based empowerment policies are indeed necessary to address such poverty and inequality.
These are the very points of departure which have informed much African National Congress (ANC) policy over the past 20 years – and which now also inform almost all the policy proposals of the Economic Freedom Fighters (EFF). Underlying both points is the view that whites remain illegitimately in possession of wealth, property, businesses, and jobs – and that the state must take measures to shift those resources into black hands.
This is a policy position which sets whites against blacks in a conflict over resources. It is also one in which continuing black poverty is simplistically ascribed to a white racism that ‘refuses to share wealth’ or contribute to ‘redress’ or ‘transformation’.
This is not to deny that poverty and unemployment are serious crises. Indeed, the unemployment rate (on a broad definition) has hovered at more than 30% for the past 20 years. However, if South Africa had achieved growth rates in excess of 6% of GDP over the past two decades, then its unemployment rates would be well below 10% today.
Extreme poverty would largely have been eradicated. South Africa would be well on its way to becoming a middle-income country, and the legacy of apartheid, as measured in unemployment and poverty, would be disappearing.
To substantiate the argument that structural racism is responsible for apartheid’s lingering legacy, the DA must show that it is whites who are responsible for the country’s low growth rates – and not the ANC’s damaging policies. This proposition is, of course, just as preposterous as that put forward by the Congress of South African Trade Unions (COSATU) last week that white Springbok rugby players intentionally underperformed in recent matches against Ireland in order to sabotage the Springbok’s new black coach.
Notwithstanding its illogical foundation, the view that black poverty is a function of white racism has taken firm hold in some quarters. There are several reasons for this. One is that racial demagoguery is one of few remaining areas of strength for South Africa’s political left. A second is that some leaders in the ANC have an interest in using what media and other platforms remain open to the party to turn South Africans against each other in the hope of deflecting criticism from a host of damaging economic policies into the echo-chamber that is the debate about white racism.
This is a position that serves the EFF equally well. In also playing to such demagoguery the DA unwittingly reinforces a key political strength of the ruling party. A third reason is that it is a view in which people with no firm understanding of how an economy works can confidently indulge while signalling their ‘virtuous’ and ‘progressive’ views to society at large.
However, overlooked in this skewed debate, is the fact that the black middle class – which has been growing steadily for well over 20 years – now rivals the size of the white middle class which means that the neat dichotomy of universal black poverty, set against universal white prosperity, no longer applies. In many cases, those who blame white racism for black poverty are themselves very much better off than the average whites they so denigrate for not ‘sharing their wealth’.
The debate also overlooks the reality that average middle-class black or white South Africans, though substantively better off than the poor, have worked very hard to get where they are and are probably heavily bonded and indebted. The idea that the middle classes have piles of ‘wealth’ to redistribute is simply false. Real wealth is the preserve of a very small segment of the society, which is increasingly black as well as white.
Despite the ANC’s achievements in reducing debt and deficit levels and driving a growth recovery in the years to 2007, which laid the foundation for its many successes in delivering services and rolling out welfare, the ruling party’s policies failed in a crucial sphere. They were unable to generate the skills, investment and entrepreneurship vital to maintaining growth rates in excess of 6% of GDP. Yet their basic macro-economic and fiscal policies were quite sound and benefited from the commodity boom.
What explains South Africa’s relative economic underperformance is that the ANC contaminated its often sound economics with a racial redistributionist ideology and, in so doing, introduced many inefficiencies, obstacles, and contradictions into the economy.
Examples range from lost investment to ineptitude in much of the civil service. The irony here is that much of what has passed as empowerment policy has been geared at excluding white economic participation (the axing of white teachers was a particularly astounding example), thereby denying many whites the opportunity to help build a more prosperous nation while perversely, in undermining much needed investment for example, harming the prospects of blacks.
The ANC contradicted its growth objectives with a view, at times, of the economy as a finite commodity that had to be redistributed – a crippling approach which stigmatised expanded white economic activity as an attempt to exclude blacks from the economy.
What gave rise to this contradiction can best be explained by the fundamental mistake of regarding redress of past injustice as necessarily involving a conflict between blacks and whites. This approach comes directly from the ANC’s determined pursuit of a National Democratic Revolution – an ideological extravagance for which it is now paying a heavy political price on city streets around South Africa.
When we look at the ANC, with its long years of domination by the South African Communist Party, we can understand how the burden of the National Democratic Revolution (NDR) has resulted in its failed policies of racial redistribution. You could say they came by those policies honestly. The worrying thing is that the DA, coming from long years of a liberal position which is the antithesis of the NDR, seems to be reaching a similar point in its thinking, without having the ideological baggage the ANC has long forced itself to bear.
If the ANC were to free itself from such ideological encumbrances, it could begin to see that economic growth in and of itself is what gives rise to empowerment. Economic growth is central to any effective empowerment policy. There is a close correlation between high growth and rapid job creation. Growth rates and household expenditure levels are also closely correlated. What is needed, in short, is a virtuous cycle in which higher investment drives higher growth, and rising growth rates increase employment levels, which in turn allow household consumption to increase and poverty to shrink.
Such an approach would embrace and encourage white economic participation as central to building a better South Africa, instead of stigmatising such participation as a greedy attempt to retain unearned privileges. It would also identify how essential it is to include much greater numbers of black people in the mainstream economy through employment and entrepreneurship instead of leaving a vast number of mainly young people moribund, on the fringes of the economy, where they are forced to subsist on welfare and handouts.
It is because growth is vital to empowerment that the IRR is busy drafting a new set of empowerment policies for South Africa, which it calls ‘Economic Empowerment for the Disadvantaged’ or ‘EED’. EED identifies its beneficiaries on the basis of their actual socio-economic status, so it no longer needs to use race as a proxy for disadvantage. It also rewards investment and business activities that create jobs, generate taxes, and contribute to exports – which are, of course, the building blocks of every prosperous society.
The beneficiaries of the EED policy will, of course, mainly be black – but the important difference is that they become beneficiaries, not because of their race, but because of their socio-economic circumstances. This is a profoundly important distinction.
It seems lost on the DA that this distinction exists at all and that there is a choice therefore to be made between the ANC’s damaging policies of racial redistribution and the emphasis on economic growth that underpins the EED policy. The first is so completely at odds with the second that to try and choose both is to make no choice at all. That the DA has struggled to make this choice – and at times teeters towards the racial redistribution approach – points to what is perhaps an even more serious malaise: the loss of any coherent ideological centre within the party.
On property rights and the Expropriation Bill recently endorsed by Parliament, the DA has done very well in not falling for the race-baiting innuendo around land, presented by the ANC and the EFF. However, on BEE, the DA in practice propagates precisely the arguments of the ANC and the EFF. In embracing the racial quotas intrinsic to BEE, the DA in turn contradicts its own position in rejecting racial quotas for sports teams.
The importance in these contradictions is that in teetering, even just occasionally, towards the racial nationalists in the ANC, the DA is effectively giving up any claim to being the only party that can unite all South Africans. It is also throwing away the possibility of developing a policy platform capable of securing a future economic turnaround and with it the actual empowerment of the disadvantaged.
The danger is very great because racial nationalism is such a powerful and seductive force that, once it takes root in sections of the party, it could grow to change the DA’s entire policy stance. Even the DA’s present position on the importance of property rights might then change.
This is a strategy for failure, both for the DA and for South Africa. It also disregards the risk (scoffed at by many) that the ANC could yet embark on real reform. The ANC is increasingly tired of facing down crowds of angry unemployed youths. It is also increasingly worried about losing the country’s fiscal and policy sovereignty to the International Monetary Fund (IMF) – an outcome which will be difficult to avoid if the economy fails to grow.
Doubts are growing about whether the pursuit of the NDR is worth the incredible political price the party is paying – most recently in Tshwane. So it could yet change direction and go for growth – leaving the DA to clutch at the discredited remains of NDR-inspired racial redistribution. What an about-turn that would be.
Nor is it clear from opinion polls that the DA’s occasional pandering to racial nationalism is winning it clear majorities of new black voters – the only possible strategic (if wholly unprincipled) defence of the populist position that white racism is responsible for black poverty. Quite the opposite may be true, as the party’s vacillating seems to drive doubt and distrust among all voters – even those who now reject the ANC.
A better approach would be to win support for a third way – that rejects the ANC’s racial nationalist policies and presents a fundamentally different set of growth-focused alternatives that could appeal across South Africa’s racial divide.
A final point highlights to just what an extent the party’s liberal underpinnings are falling victim to the racial demagoguery championed by the ANC. In the opening paragraphs of his article, Mr Seabe suggests that John Kane-Berman is a racist motivated by a desire to return to apartheid. Is this just Mr Seabe’s view or is it a view shared by the DA and its leader, Mmusi Maimane?
We struggle to think that the latter could be possible. But the article was published in Mr Seabe’s capacity as Mr Maimane’s spokesperson. Did Mr Maimane know about the article? If not, how was the article released? Was it seen and cleared by other senior DA leaders? Even if Mr Seabe had written in his personal capacity, how is it possible that someone with such views could rise to such a senior position in the DA?
John Kane-Berman dedicated his life to the struggle against apartheid long before both Mr Seabe and Mr Maimane were born. He fought that system with great determination – as did many whites in the liberal community. To suggest, in the name of the DA leader, that Mr Kane-Berman is a racist yearning for ‘the good old days’ of apartheid, is quite a position for the DA to take.
The deeper irony is that the DA is now in a position to challenge the ANC solely because the ANC's policies have been unable to sustain the high growth rates essential to real empowerment. Yet, as the DA expands, it seems to share, at times, worrying aspects of the racial ideology of the ANC when it should be deepening its liberal foundations.
Ripples of doubt about where the DA is headed are spreading.
Frans Cronje is CEO of the IRR - a think-tank that promotes political and economic freedom.