OPINION

What role for the state in black advancement?

Mugabe Ratshikuni says black businessmen are still hugely disadvantaged by a lack of social capital

VBS and the Quest for Radical Socio-economic Transformation

The recent furore around VBS Bank and the South African Reserve Bank (SARB) putting it under curatorship, after the bank accepted deposits from municipalities which it is not legally permitted to do under the Municipal Finance Management Act of 2003, brought to the fore the critical challenges that we are faced with as a country in our quest for radical socio-economic transformation aimed at bringing black people and historically disadvantaged individuals and communities into meaningful mainstream economic activity as well as transforming racially skewed ownership patterns that prevent our economy from growing in an inclusive manner.

In discussing this issue with a very close mate of mine who is in the financial services sector, notwithstanding the merits of the SARBs actions, we ended up focussing on the critical matter of how to transform the various sectors of our economy, which still remain largely owned and controlled by a few, large, elite firms across entire value chains. These firms, of course, for historically obvious reasons are mostly owned and controlled by white people (it wouldn’t be contemporary South Africa if every issue didn’t end up at some point boiling down to race would it?)

My mate’s main argument in beginning this debate, was to say that we black South Africans need to start building our own businesses, independent of the state if we want to see genuine transformation which will help us grow economically as well as fight income and asset (wealth) inequality.

My quick response to this, was to highlight the fact that the Afrikaner banks of the apartheid era, which are amongst the mainstream banking establishment at present, as well as most of the big Afrikaner conglomerates which now make up a large part of mainstream corporate South Africa, where indeed started with the assistance and support of the National Party government and so there is nothing wrong with black business and the state deliberately working together to transform our economy through building and investing in capacity by being preferential to each other.

Perhaps (as in this case), what we need to do is to relook and rework some of the laws which were put in place for good reasons, but hinder us in our quest to see a more transformed, inclusive economy I argued? After all, black business and black business people do not have the same access to social capital (and all its benefits) that white business and white people do and as such government must be systematic, unapologetic and very intentional about empowering, supporting, developing and promoting (pushing) black business across all sectors of our economy I further argued. Doing so, would contrary to popular, mainstream opinion, not lower standards or contribute to corruption, but would rather further our developmental objectives as a nation.

Of course, in saying so, I am fully aware that not all black business is innately progressive and transformational in its inclination, nature, ethos and objectives. My thinking was highly influenced by French Sociologist Pierre Bourdieu’s book, Distinction: A Social Critique of the Judgement of Taste.

Bourdieu’s classical work could be used to infer that social capital plays a determining role in enabling people within society to access resources that are important in order to succeed, through their social networks or institutionalised relationships. In fact, taking this a step further, social capital, it could be argued allows people access to economic capital, not only because of what they know (and are capable of) but added to that also who they know.

In line with this thinking, one of the biggest problems that any black person(s) or business is faced with, is that for historically obvious reasons, they don’t have access to the critical social capital that is required to succeed within a corporate space or as a business person, hence you find that most black businesses struggle with funding for their businesses, access to markets in a highly monopolised economy controlled by a connected few (which are some of the barriers to entry that keep our economy from being truly transformed).

As a result of this, government must be deliberate and radical about giving black people and black businesses opportunities. This is not corruption, but an important intervention in breaking the social capital barrier that makes success difficult for black people and black businesses.

In a world that works on networking and networks, it is actually an insult to insinuate that when black people get given opportunities, it is nepotism whereas when whites do it, we call it using their networks. It is the same thinking that makes people label those blacks who do business with government derogatively as tenderpreneurs, when a large chunk of government business goes to big, established private sector companies in actual fact, and they are called legitimate, genuine enterprises. The same thinking informs the labelling of anything untoward that has to do with black business as corruption when similar behaviour by big, mostly white-owned corporates is reduced to mere collusion.

The point here, is that we need to stop being so emotional and emotive about such issues and realise that we are still dealing with a huge backlog from our divided past and we need specific, targeted interventions by government and other role players in order to level the playing field.

Doing so, does not equate to racism or favouring one race at the expense of another unjustly, but rather it is a critical nation building imperative as we pursue inclusive economic growth. After all, it was renowned author Malcolm Gladwell in his highly celebrated book Outliers who made a similar point by highlighting the fact that no one comes from poverty and rises up the ladder to make it on their own. Their success is built on advantages, opportunities, networks that they accumulate through life (some deserved, some not so deserved), so that in the end what we call an outlier in life is not really that much of an outlier at all.

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.