Transformation has collided with reality

Devon Windvogel on the failed ideology that has brought SA to the brink of the precipice

Finally, our post-Apartheid intellectual and political masters have become aware of the perilous state in which we find ourselves after subjecting the country, to what can only be described, as a reign of arrogant ignorance. Thabo Mbeki’s recent statement that public discontent with the government might lead to a kind of "Arab Spring” was telling.

So too Kgalema Motlanthe’s comments of “a tinderbox waiting to ignite.” Similar views also came from a number of intellectuals in the aftermath of the devastating July 2021 riots. But the reasons why we are at the precipice have not yet sunk in and ideas to save us from a catastrophe are even more elusive.

Understanding the devastating impact of Transformation and its nearly 30-year reign as the main source for arrogant ignorance might just provide us with ideas to take us from that precipice. But this will require a giant leap towards rational thought and reflection, which will most likely result in a complete rejection of ideas that have dominated our political discourse since the beginning of the 1990s. It is the only way to stop the arrogant ignorance that has steered us to the precipice.

The widespread destruction of public institutions due to maladministration and corruption, as well as a flagging economy with devastating socio-economic consequences have resulted in a general sense that not only is the country on the wrong path but also showing worrying signs of disintegration.

Central and provincial government departments, municipalities as well as state-owned enterprises, the great centres of authority in a modern state, are showing all the symptoms of being hopelessly dysfunctional. Indeed, the very fabric of our society appears to be unravelling with the breakdown of law and order in many communities and widespread discontent among parts of the population.

More frightening is that it appears as if the state has also lost its monopoly on violence in parts of the country with citizens more fearful of gangs, local drug lords and other strongmen who have no hesitation to use violence to protect their fiefdoms. These characters fear no consequences with many keeping local police and other state officials on their payrolls. Not just have South Africans developed a distrust of state institutions, but they have also become fearful of fellow human beings. All ingredients associated with a failed state.

Even left-wing intellectuals and commentators - the germinators of the ideas intended to radically transform South Africa – are warning of imminent chaos if something is not done, pointing as usual to the conditions of the poor. Most of these intellectuals want more transformation and government handouts. The Basic Income Grant (BIG) is just the latest in their arsenal to fight poverty, inequality and social disintegration.

But how did we get here? There is a consensus emerging - particularly among the opposition - which points to the ANC policy of cadre deployment. The ruling party, it is argued, simply put the wrong people in positions of authority and they are responsible for the corruption and maladministration within public institutions. It was also one of the conclusions reached by the Zondo Commission.

However, this does not go to the root of the problem. Those at the forefront of state capture were merely actors in a play emanating from ideas built on wrong assumptions, filled with contradictions and blind to the realities of modern South Africa.

The fundamental ideas that our intellectual and political masters imposed upon the nation since the 1990s are the very reason we are in such a mess. These ideas established a framework of thought, built on ignorance and imposed with arrogance. Transformation, that peculiar local ideology to radically change South Africa, encapsulates all these ideas. It has become the dogma through which zealots display and impose a type of arrogance that makes those with opposing views tremble with fear, afraid of being accused of heresy.

Transformation combined racial demographics with quantitative methods which have turned statistics into a curse and in the process destroyed trust in institutions and fellow human beings. The problem with Transformation is that it was founded on ignorance of South African history, the unique features of her economy and society as well as ignoring some of the most basic principles of economics.

The task of the new government in 1994 was to integrate millions of black South Africans into a sophisticated modern economy from which they had been excluded for decades. Information about the goodies produced by that economy created the desire to join it, which not even the draconian pass laws of Apartheid could stop. The aspirations of millions were simply to be lifted out of poverty and ultimately to enjoy standards of living similar to those enjoyed by whites in cities and towns.

These aspirations may well have been understood by our new elite – many soon migrating to white suburbs themselves – but they certainly did not appreciate the sophistication as well as the fragility of the economic system that had evolved in South Africa following the discovery of diamonds and gold during the second half of the 19th century.

The average white South African in the early 1990s had at his or her command all the amenities enjoyed by citizens in the most advanced nations of the world. From basic services, like water and electricity, to all the highly sophisticated goods and services - at a price of course - that the world had to offer. This was the world that non-white South Africans aspired to join and unlike other migrants seeking a better life, there was no need to cross the country’s borders to do so. But this veneer of prosperity and sophistication enjoyed by white South Africans was built on shaky ground. It is here where Transformation ultimately came face to face with the realities of modern South Africa.

South Africa was a backwater before it was catapulted into the modern world with the discovery of diamonds and gold. The indigenous population were for thousands of years isolated from the great philosophical, cultural and technological advancements of Eurasia and North Africa and was only recently exposed to some of those developments. Stratified societies with extensive divisions of labour, which included a specialised merchant class, were completely absent when they came into contact with Europeans.

The mineral revolution of the 19th century meant that technology, capital, entrepreneurship and skilled labour had to be imported. The revolution that took place in the primary sector of the economy in subsequent decades resulted in an economic miracle as advanced secondary and tertiary sectors were added, particularly after unification in 1910. By the time the ANC came to power in 1994, the economy had all the characteristics of a relatively mature economy with a small agricultural contribution to GDP – 3,7 per cent in 1994 - and large manufacturing and service sectors. [i]

However, this delicate and complicated economic and indeed political system had a major flaw; a severe shortage of entrepreneurial and managerial expertise. Indeed, since 1910 the state often had to play the role of entrepreneur as it tried to in effect ration the available managerial expertise.

It even had to import specific skills from abroad as it did with the establishment of ISCOR and other state-owned enterprises. This shortage also resulted in the private sector being dominated by big companies with near monopoly power in different sectors of the economy. This gave to the South African economy a peculiarly mercantilist character with state and private monopolies protected behind massive trade barriers.

The problem for South Africa was that the functioning of the whole economic and political system was ultimately dependent on a tiny minority within the white minority, almost all of them male. The migration of millions of black South Africans to the more developed urban areas in search of work was in effect unskilled and semiskilled labour moving to areas where those entrepreneurial and managerial skills were more abundant. In other words where those particular white males were to be found.

The low quality of entrepreneurship and the lack of managerial expertise among black South Africans was well known and understood in the early 1990s. It had previously been well documented by scholars, like the late Stellenbosch academic J L Sadie,[ii].

Given this gross deficiency of managerial and entrepreneurial expertise and the main objective of trying to integrate millions of black South Africans into the modern economy after 1994, the rational policy should have been to make maximum use of those scarce skills, disproportionately distributed among a tiny group of white males, particularly those in the civil service and state-owned enterprises.

Instead, South Africa was to become the victim of the arrogant ignorance associated with the new ideology of Transformation. The brightest minds among our new intellectual and political elite borrowed from North America the ultimate contradiction, a policy to fight racism with racism. Race and racial discrimination again became official South African government policy after 1994, but this time discriminating almost exclusively against white males, the very people with those scarce skills were needed to make the new South Africa a success. That contradiction set the country on the path to disintegration, because it was to ultimately destroy trust in a host of key institutions.

The new elite simply assumed that managerial and entrepreneurial expertise were in abundance among the black majority. The assumption was that those long-suffering sons and daughters of the soil from places like rural Eastern Cape, the rolling hills of Kwazulu-Natal and townships from around the country, the products from educational establishments that not long before were characterised by slogans like “liberation before education”; together with political exiles - well versed in Marxist-Leninist ideology - would have more than enough capacity to run a sophisticated modern state.

Well, not only have we learned that they did not possess the capacity to create and manage such a state, they did not even have the capacity to maintain it. It was an assumption that merged ignorance about the South African situation with magical thinking in the belief that simply putting “our people in place” would bring about racial equality and economic prosperity.

Nothing can embolden the mind with more self-confidence than when it believes it is being guided by pure logic towards a higher purpose. History has shown how religion can intoxicate fanatics with faith in a higher purpose, like heaven, paradise or reincarnation, and of course when deduced from an axiom, like a divine being.

Secular frameworks which logically connect axioms with a higher purpose - like the supremacy of the nation or equality - created similar zealotry among fanatics like Hitler, Stalin and Mao throughout the 20th century - resulting in great destruction and the slaughter of millions. It is as if the mind becomes imprisoned within a framework from where not even empirical evidence or a sense of humanity can provide an easy escape.

Unfortunately, Transformation has a similar logical framework that evokes strong passions with little scope for the intrusion of empirical evidence or any degree of pragmatism. But unlike religious or secular frameworks, it is not founded on any recognisable principles, which can be a guide for individual behaviour or a program for change. Instead, it simply unleashes an overwhelming sense of entitlement with racial statistics setting forth the path through which to realise that entitlement.

It assumes that equality was the natural state of all human beings, and that the existence of inequality is simply due to the external forces of racism, like apartheid and colonialism. The higher purpose of Transformation is therefore equality, with racism in all its forms providing an axiom from which to make all its deductions.

This provides for an ideological framework with impeccable deductive logic and thus the ingredients for a level of confidence that can turn to arrogance and indeed zealotry, particularly when confronted with opposing views from outside that framework.

Simply put, the view was there was a need for Affirmative Action and Black Economic Empowerment, because South Africa’s racial inequality was caused by the racism associated with Apartheid and colonialism. Racist policies are therefore needed to achieve racial equality. But with no principles as a guide and success simply measured through racial statistics, Transformation is in effect a deductive framework without any rules, within which minds became imprisoned.

The problem however is that deductive logic is not reality and reality in the greater scheme of things is always absolute; with a capacity to punish with a vengeance, especially when the axiom of a logical framework, like Transformation, is fatally flawed. Racism in the form of colonialism and Apartheid may well have contributed to inequality, but it simply is not the ultimate source of our inequality.

It is here where our new elite’s ignorance of some of the basic principles of economics came to the fore with devastating consequences for the country.

As students of economics know, real income in an economy depends on output and output depends on inputs. Money is simply a medium of exchange with which to measure inputs and outputs. When there is a breakdown between money as a measurement of inputs and output the supply side of the economy will be severely affected and if it persists is likely to malfunction, especially when the ruthless pursuit of money in itself has become the primary objective.

South Africa is the victim of such a breakdown. Many of the beneficiaries of Transformation have received huge money incomes without providing the equivalent inputs and outputs. They have in effect destroyed large parts of the supply side of the South African economy, which was for more than a century carefully nurtured by a small group of exceptional individuals among the white elite.

Few things exemplify this state of affairs better than the mess at Eskom. We have now become accustomed to rolling blackouts due to Eskom’s inability to produce enough electricity, something inconceivable before 1994. A state-owned enterprise started by one of those exceptional individuals, Hendrik van der Bijl (1887–1948) - whose intellectual and managerial genius extended to the establishment of a host of other national institutions – is now a shadow of its former self.

The Eskom mess is ultimately the result of more than 25 years of aggressive Transformation at the utility, during which the sons and daughters of the soil were paid billions as beneficiaries of its impeccable logic. This occurred while those with the necessary skills and experience to provide the inputs and outputs were systematically driven out of the institution with retrenchment or early retirement packages only for many to be eagerly snapped up by utilities around the world.

The problem is that the whole supply side of a modern economy depends on electricity. These frequent blackouts represent one aspect of reality staring us in the face; while the breakdown between money and income, and the luxurious lifestyles enjoyed by the beneficiaries of Transformation, who cannot provide the necessary inputs and outputs, represents the other.

This is the absolutism of reality ruthlessly imposing itself upon the impeccable logic of Transformation. Indeed, this rendezvous with reality is the inevitable outcome of the contradictions inherent in the racism associated with Transformation and for which we are now paying a terrible price, while some of the beneficiaries are enjoying the fruits of their ill-gotten gains made possible by a flawed ideology.

To fully grasp the destructive nature of Transformation we need insight and honesty with regard to the enormous philosophical and cultural dynamics at play and which are at the very heart of our predicament. Without it we will not be able to even contemplate and develop the necessary intellectual tools to embark on an effective rescue effort that can save us from the destructive forces that have been unleashed by Transformation.

Devon Windvogel is a lecturer in Economics and Economic History at the University of KwaZulu-Natal. He was educated at Stevenson College, Edinburgh and Glasgow University in Scotland.


[i] Article by Stan Du Plessis and Ben Smit.

[ii] Sadie J. L. ‘The Social Anthropology of Economic Underdevelopment’ The Economic Journal, Vol. 70, No. 278 (Jun., 1960)

Sadie J. L. (1966) ‘Economic development is a way of life’. South African Journal of Science, vol. 62,

no 9

Sadie J. L. ‘Economic development: Fons et origo.’ Development Southern Africa, Vol. 4, No. 4, November 1987