In mid March 1992, 68.7% of whites voted yes to: “Do you support continuation of the reform process which the State President began on 2 February 1990 and which is aimed at a new Constitution through negotiation?”
Suppose that soon thereafter a second referendum, open to all adult South Africans, had asked something along the lines of: Do you support the new constitution barring race-based preferences?
We now know that the vast majority of South Africans would have benefited immensely from such a plebiscite ratifying a well-worded rejection of racial preferences so that historical inequities would have had to be overcome through policies spurring growth and job creation to achieve broad prosperity. The value of this little thought experiment is not, however, about contemplating what might have been.
John Rawls is often considered the most influential philosopher of the past fifty years. His “A Theory of Justice,” originally released in 1971 and subsequently updated, has inspired both an abundance of followers and well-reasoned rebuttals.
Rawls’ focus on justice issues inspired his famous thought experiment. He asked how people should want a society to be structured if they didn’t know what their position in that society would be.
This so-called “veil of ignorance” wasn’t a hypothetical construct for South Africans in early 1992. Neither whites nor blacks knew what their position in society would be in the decades to come. Thirty years later we know that what seemed like a successful political transition has left a majority of South Africans poor, and that prospects among those unemployed are dismal with no improvement in sight.
Given today’s obscene levels of entrenched unemployment and poverty, we can confidently assert that there should have been such a second referendum and that it should have enjoyed overwhelming support. Therefore, using the most famous contribution of the patron saint of modern social justice advocacy, we can objectively assess the most pivotal decisions of today’s most unequal society in its quest to transcend from generations of racial oppression. The result clearly repudiates the ANC’s policies and political messaging.
The ANC’s political machinery is mostly a giant patronage network supported by political messaging which frames critical issues in terms of racial inequality. Such framing is used to justify the redistribution focus of their economic policies which then funds patronage spanning an overstaffed and ineffective civil service, hopelessly managed SOEs, and tenderpreneurs.
The project to restructure our society began with much trepidation 30 years ago but then it soon transcended formidable obstacles to inspire international acclaim. From there ideals were greedily exploited. We can’t go back in time. Rather, we must now take stock of how, in the past three weeks, many governments have purged over indulged ideals in favour of realistic assessments and pragmatic policies. We must begin by forthrightly challenging how the ANC exploits identity politics while attributing to historical injustices the current hardships which trace directly to their abysmal economic stewardship.
The external impetus spurring the 1992 referendum ranged from sanctions to the end of the Cold War, thereby undermining the National Party’s appeal as a bulwark against the spread of international communism. Russia’s unprovoked invasion of Ukraine has violently inaugurated what hopefully will remain a cold war among nuclear powers. There has followed a dramatic pivot away from idealistic but counterproductive policies in capitals stretching from West to East.
It has frequently been suggested that Russian-speaking Angela Merkel, along with many of her compatriots, sought to build deep economic ties with Russia to make amends for Germany’s 1941 invasion of the Soviet Union which resulted in more than twenty million deaths. The current war in Ukraine has shown that such sentiments and the policies they produced - however well-intended - were imprudent indulgences of ideals on a grand historical scale.
Many within and beyond Germany’s borders now view the building of a second Nordstream pipeline as having encouraged Vladimir Putin’s revanchist instincts. Germany’s new government has, admirably, acknowledged its over embrace of idealism and pivoted aggressively.
Wanting to make amends for past injustices is laudable until such desires are overindulged - and then exploited. There was always a political and moral imperative for SA’s post-1994 government to fund substantial redistribution-type projects. Tragically, this distracted our policy discussions from noting why the global middle class was bulging and poverty plunging during the 30-year post-Cold War period.
Dozens of countries found that they could sustain high GDP growth and high household and government savings through integrating within global supply chains. For SA to get on board with this era’s development accelerator requires value-added exporters being freed from BEE requirements. Instead, the Department of Trade and Industry has been advancing the opposite approach through its counterproductive “localisation” initiative.
We always needed to pivot from sanctions and economic isolation, post-apartheid, to a commercially robust form of constructive engagement with the global economy. Yet that still hasn’t happened. SA was overly reliant on commodity exports as the political transition began and today we look to commodity exports to fund subsistence payments for the vast majority of our healthy young adults who have been rendered idle by our isolationist policies.
Whereas Russia is being aggressively sanctioned to discourage its efforts to forcefully annex a neighbouring country, the ANC’s twisted version of isolationism induces the same effects. Sustaining a youth unemployment rate of 70% is profoundly toxic.
What ANC policies fail to recognise is that there isn’t sufficient domestic purchasing power to change our perilous direction of travel. We desperately need to add value to goods and services destined for the world’s billions of affluent consumers. We don’t grow domestic purchasing power because so much of our workforce is unproductive - due to being cosseted government workers or being unemployed - or being overburdened with personal debt.
Another example of historical guilt inspiring misguided remedies was the unsecured lending craze that gained international support around the turn of the century. Eventually the rest of the world figured out that it does far more harm than good unless the interest rate is only modestly greater than inflation. Follow-the-money analyses make clear that much of SA’s unsecured lending is anti-development.
Unfortunately, our economic discourse is littered with pseudo ideals, such as “banking the unbanked” without distinguishing between adding value versus being prohibitively expensive.
Our grossly ill-conceived economic policies have now provoked debates about subsistence grants for the majority of young South Africans who are at risk of going through life dependent on the state with little prospect of achieving the dignity that self-sufficiency offers.
Rather than this provoking something resembling the ideal-purging pragmatism which has swept across so many national capitals in the past few weeks, we entertain the insane notion that such subsistence payments to idled people provide a multiplier effect which spurs growth. This presumes concepts like productivity are unimportant.
Broad prosperity requires integrating much more meaningfully within today’s rapidly evolving global economy. This requires using all the skills and expertise available, regardless of their origin, while rapidly diffusing skills and knowledge through growing private sector jobs. The exploitation of identity politics and social justice memes must give way to achieving sustained high growth through embracing commercial realities.
