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It’s not whether race matters, but whether it offers a solution

Dealing with all the issues facing South Africa is a matter of profound importance. It is difficult to see what a focus on race offers in doing so. In raising the costs of doing business, race policy has made it more difficult. And it incentivises racial thinking – helping to turn it from South Africa’s great abomination to a source of cynical pride.

Former public protector Thuli Madonsela, widely respected for her work in that office to hold the line against official malfeasance, recently took up her cudgels in defence of something that is evidently very dear to her heart. Social justice, she argues, needs to be at the heart of policy and governance. In her view, this requires placing emphasis on group identities.

“Social injustice,” she writes in City Press, “is perpetrated when one-size-fits-all and impact-unconscious policies disadvantage those whose lives are divergent from the paradigm informing such policies. In this regard, persons with disabilities, women, older persons, children, young people and rural communities tend to be disadvantaged. Consider a municipal by-law that says no dogs are allowed in public meetings. Visually impaired people as a group who rely on guide dogs would be disparately affected by such policy although, on the face of it, it applies to all in equal measure.”

Achieving a just or equitable outcome requires treating different groups differently, above all foregrounding the importance of race.

Race, she argues, does “matter”, and here she is hardly alone in her sentiments – of late (and especially in the wake of the leadership changes in the Democratic Alliance) there has been a wave of commentary asserting this.

South Africa’s ailments are in this view (I believe, at the risk of simplifying, but without caricaturing) aligned with race. It is thus not socioeconomic deprivation – poverty, unemployment, poor living conditions – that must be the focus of concern, at least not solely, but how it is experienced across the country’s different races.

In some ways, this is uncontentious. Race-based discrimination was a major determinant of the country’s present. The historical background in the apportionment (often the outright denial) of opportunities to create and own wealth, to hold property and to access the means for socioeconomic mobility meant that the democratic transition took place in an economy characterised by widespread poverty and extensive inequalities, which correlated broadly with race.

The patterns are not as stark now, but they are not altogether absent. Poverty, as has often been said, wears a blackface. Prof Madonsela is correct to mention “the ugly shadow of the unjust apartheid and colonial policies and laws”.

What is less obvious is what her suggested endpoint is, and how this is to be achieved. What does a socially just outcome look like? Here the idea appears to be enabling the full participation of all in each facet of society, while measuring this should be done on the basis of groups. Social justice is, she asserts, “about justice between groups in society and societies”.

She goes on to stress the non-negotiability of race in this: “Underpinning the UN’s Social Justice Day call to leave no one behind is the disaggregation of humanity into groups to account for all. If we abandon race as a policy consideration, how do we determine who remains left behind?”

The latter question is something of a non-sequitur since it asserts that determining disadvantage (being “left behind”) requires racial data. It’s difficult to understand this. Yet if disadvantage here is to be understood in, say, socioeconomic terms, then income, debt, assets owned, unemployment and so on would be useful information. Race would not. In other words, being poor would, in this case, be used to measure who has been left behind.

This information might be correlated with race to determine socioeconomic patterns, but that is a very different point from the one Madonsela makes.

One suspects that what she is attempting to convey is a variant of the proportionality argument: that in a just society, its benefits and liabilities will be distributed in proportion to its demographics. Where this fails to materialise, an injustice can be detected and perhaps some sort of pathology (racism, sexism and so on) inferred.

This reasoning supports the thrust of the “transformation” agenda championed by the ruling party, the government, and a large and voluble part of South Africa’s commentariat. It is, rhetorically at least, endorsed by much of the business community.

Yet there are good reasons to be sceptical that such measures – Broad-based Black Economic Empowerment (BBBEE) for example – will have the beneficial impact that their proponents might have hoped.

BBBEE has not, it seems, prompted growth. Indeed, the changing nature of BBBEE and the demands it imposes have arguably acted as a major disincentive to investment. One very interesting study, undertaken by small business policy think tank SBP, found this to be a major problem for small firms – and black entrepreneurs felt they had gained little from it. Many felt that the system was burdensome, costly, and offered them few benefits.

Indeed, BBBEE has been criticised for disproportionately directing benefits to a relatively small group of the more affluent along with politically connected insiders, but offering little to South Africa’s most acutely “left behind”.

One needn’t take the word of the Institute of Race Relations (IRR) for this. An editorial in the journal of the South African Communist Party had this to say: “The assumption that enriching a select BEE few via share-deals, or measuring empowerment progress in terms of direct individual black percentage ownership of the JSE, or (worse still) looting public property in the hands of state-owned corporations in the name of broad-based black empowerment is resulting in the very opposite – increasing poverty for the majority, increasing racial inequality, and persisting mass unemployment.”

Should this surprise us? Not really, since preferential policies generally run the risk of being “captured” (even if only by default) by those in the target group with the political access, business contacts and education to leverage them. Paradoxically, those least “left behind”.

The Malaysian experience is instructive in this regard, especially since it was at one time viewed as a model of sorts for South Africa. Yet it is increasingly acknowledged that whatever its own empowerment and affirmative action policies may have done for its beneficiaries, they came with socio-political and economic costs. Writes Dr Jayat Menon of the Asian Development Bank: “The affirmative action program has failed its focus group while marginalising everyone else in the process. Rather than increasing social cohesion, it has contributed to disunity. As a result, Malaysia’s skilled labour and capital have tended to migrate overseas, compounding the costs of affirmative action.”

So what then is the solution? Other than assuming she means more-of-the-same (perhaps we-can-do-it-better), it’s difficult to divine this from Madonsela’s contribution.

She is dismissive of the idea that “education and employment alone” will be sufficient to “correct imbalances”. This she presents, with a hint of caricature, as being the position of those “clamouring for race-blind policies”.

To which one could respond that it would be necessary to define precisely what “correcting imbalances” would mean. If the idea is achieving a workforce that mirrors the breakdown of the population, it demands – if anything – more intrusive and abusive intervention. Why? Because diverse populations do not typically sort themselves out proportionately in any field of endeavour. As Thomas Sowell has shown in exhaustive detail, this is at best a rare exception, and the assumption that it should be is without empirical foundation. Yet it has taken on an ideological life of its own.

One hastens to add that this is emphatically not to say that what we see in South Africa today is a mere accident of fate. South Africa is a case in which people were purposefully hobbled through denial of resources (worse, the opportunity to acquire them) and the opportunities for socioeconomic mobility. But it is to say that the goals of policy may be badly misplaced and that trying to shoehorn the workforce into desired demographic patterns is not something that will likely be achieved without considerable coercion.

This, in turn, is likely to impose ever steeper costs on the economy as a whole. There are trade-offs in many things. “Balance” may be achieved at the cost of shrinking opportunities.

If “correcting imbalances” is taken as a stand-in for expanding opportunities and ensuring the means to achieve a good standard of living, then it is difficult to imagine why “education and employment” should not be the foundational goal of policy. South Africa has been unsuccessful in satisfactorily generating the former, and in some senses catastrophically ineffective in providing the latter. There are too few jobs to absorb, above all, first-time entrants to the job market and those without skills; and the preparation provided to do so has been inadequate.

And on top of this, the country has too few entrepreneurs to create those opportunities, along with too many businesspeople (understandably) pessimistic about the business environment and thus unwilling to risk expansion.

Dealing with these issues is a matter of profound importance. It is difficult to see what a focus on race offers in doing so. In raising the costs of doing business, race policy has made it more difficult. And it incentivises racial thinking – helping to turn it from South Africa’s great abomination, to a source of cynical pride. And it will be exploited by those not “left behind”.

Indeed, it could be argued that this is a case of an “impact-unconscious” policy.

But she is probably correct in saying that employment and education are not “alone” sufficient to deal with South Africa’s malaise. That is why we at the Institute of Race Relations have proposed alternative frameworks, such as our alternative to BBBEE, Economic Empowerment for the Disadvantaged (EED), or our Ipulazi plan for land reform. We propose in the first instance, directing assistance to those suffering real, measurable deprivation, and incentivising businesses to contribute to this. Unapologetically, education and employment are prime targets here – although assisting with the acquisition of assets and services plays an important role too.

Given the demographics of poverty, such policies would be directed overwhelmingly towards black people. Indeed, in this, it would mirror precisely what the government has done in one of its more successful poverty-alleviation measures, its social grants.

Perhaps the question is not whether race matters, but whether it provides a solution. Faced with the magnitude of our socio-economic problems, the desperate need for growth and the dynamic nature of the modern economy, it is time to try something different.



Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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