Monopolies are a Bottleneck to Development

Over the past weekend, whilst busy researching and analysing the investment climate in Gauteng (since investment is one of the main buzzwords of the “New Dawn”, one must try and get a better understanding of the outlook), I happened to pick up an old book, that I read in my days as a young student, Robert Tressell’s perennially axiomatic novel, The Ragged Trousered Philanthropists.

Of course, once I opened the book, I couldn’t put it down and was completely engrossed in it until I finished it. In the midst of devouring this book, I was drawn to reflect once again on the ills that continue to hold us back as a country: poverty, inequality, economic exclusion, what causes these ills and why we are still struggling to overcome them and they are seemingly getting worse over two decades into our democratic dispensation.

A very long quote from the book struck me as poignant and pertinent in this regard:

“Poverty is not caused by men and women getting married; it's not caused by machinery; it's not caused by "over-production"; it's not caused by drink or laziness; and it's not caused by "over-population". It's caused by Private Monopoly.

That is the present system. They have monopolised everything that it is possible to monopolise; they have got the whole earth, the minerals in the earth and the streams that water the earth. The only reason they have not monopolised the daylight and the air is that it is not possible to do it. If it were possible to construct huge gasometers and to draw together and compress within them the whole of the atmosphere, it would have been done long ago, and we should have been compelled to work for them in order to get money to buy air to breathe.

And if that seemingly impossible thing were accomplished tomorrow, you would see thousands of people dying for want of air - or of the money to buy it - even as now thousands are dying for want of the other necessities of life. You would see people going about gasping for breath, and telling each other that the likes of them could not expect to have air to breathe unless they had the money to pay for it.

Most of you here, for instance, would think and say so. Even as you think at present that it's right for so few people to own the Earth, the Minerals and the Water, which are all just as necessary as is the air. In exactly the same spirit as you now say: "It's Their Land," "It's Their Water," "It's Their Coal," "It's Their Iron," so you would say "It's Their Air," "These are their gasometers, and what right have the likes of us to expect them to allow us to breathe for nothing?"

And even while he is doing this the air monopolist will be preaching sermons on the Brotherhood of Man; he will be dispensing advice on "Christian Duty" in the Sunday magazines; he will give utterance to numerous more or less moral maxims for the guidance of the young. And meantime, all around, people will be dying for want of some of the air that he will have bottled up in his gasometers.

And when you are all dragging out a miserable existence, gasping for breath or dying for want of air, if one of your number suggests smashing a hole in the side of one of the gasometers, you will all fall upon him in the name of law and order, and after doing your best to tear him limb from limb, you'll drag him, covered with blood, in triumph to the nearest Police Station and deliver him up to "justice" in the hope of being given a few half-pounds of air for your trouble.” 

The staggering reality of the South African situation is that we keep upholding a system that is structured in such a manner that it benefits the few at the expense of the many. The economy is still structured in a manner that a few large firms control entire value chains at the expense of competition, small business development and entrepreneurship, innovation and inclusive growth.

It is these big monopolies that still own and control our economy, as The Ragged Trousered Philanthropists so aptly highlights that are keeping us from achieving our developmental goals. A developmental state should definitely be looking at breaking the power of these monopolies, of creating an opportunity for new entrants to shake up the economy and introduce greater competition and competitiveness.

The problem, as Professor Steven Friedman highlighted a couple of years ago, is that, as much as most business leaders are aware that our economy is not open and inclusive enough (and hence keeps the majority on the periphery), they are wont to resist any change as it might cause them to pay a higher price than they are willing to.

It is much easier to blame the unions and government, without taking responsibility for the fact that it is big business and the monopoly that they hold over most sectors of our economy that is a true bottleneck to progress in our country.

The whole system is geared towards defending the interests of those who already hold the levers of the economy, even at the expense of a developmental agenda and inclusive growth. To say so, does not make one a socialist or a “commie” as some would like to fallaciously label one (I, myself am not an ideologue in that sense just for the record). To say so does not make one “anti-business”, but rather pro development and economic inclusivity.

The high levels of protest and unrest within the country are a sign, not just of government failure in delivering services as some amongst us would have us believe, but rather of a social compact gone wrong, of a people that are frustrated and increasingly angry at being left out in the cold economically, a people that are experiencing the haunting reality so brilliantly described by African American intellectual W.E.B Du Bois, “To be a poor man is hard, but to be a poor race in a land of dollars is the very bottom of hardships.”

So, in order to positively move forward as a country, we must break the status quo, we must across all segments of society make the necessary sacrifices in order to enhance and promote economic inclusivity. This requires that big business and these private monopolies that dominate our economy be broken down so that we can increase competitiveness and innovation within our economy. To not do so, would be tantamount to commiting economic suicide of the highest order which will derail, if not completely dismantle the nation building agenda. In Robert Tressell’s words, “every man who is not helping to bring about a better state of affairs for the future is helping to perpetuate the present misery, and is therefore the enemy of his own children. There is no such thing as being neutral: we must either help or hinder.”

Mugabe Ratshikuni works for the Gauteng provincial government; He is an activist with a passion for social justice and transformation. He writes here in his personal capacity.