Over the festive season, the Daily Friend has been rerunning some most-read, or especially significant, articles from 2021. The following piece was published on 27 June.
Earlier in June, President Cyril Ramaphosa called for South Africa to review BEE.
Proponents of race-based policy have always had two basic arguments. Both are worth review. One is that race-based laws increase productivity. The other is that race-based laws reduce social instability by appeasing popular sentiment in favour of them. How do these arguments stand up today?
Last winter, Ramaphosa said that BEE ‘if anything needs to be enhanced’. He explained that the ‘economy is damaged because it is not utilizing all of its resources. It’s like we have a vehicle with 12 cylinders, but we have forever and a day been operating on four cylinders’.
This is a good metaphor to capture the pro-market argument for BEE, insofar as there is one. If most agents with buying power are statistical discriminators and most people with productive capacity are discriminated against, then inefficiencies will follow. Government intervention against such bias will increase productivity in the short-term, by forcing markets open, and after that will open the eyes of blind discriminators to the usefulness of seeing through stupid racial stereotypes. Then we fire on all cylinders.
This argument assumes that racist white people are still predominant forces in the economy. But are they? One reason to think not is that Stats SA shows black people (on the BEE definition) have had a supermajority of buying power since at least 2015. Moreover, Stats SA showed the black top 10% has had roughly three times more buying power than the white top 10%, which took 10% of income, since 2015.
So, evidence of ‘white minority capital’ already debunks the economic argument for BEE, since that argument depends on the thought that white racists are inefficiently allocating most capital. But the further question is, what portion of remaining white elites discriminate against blacks when spending at all? Available evidence does not show that race bias is normal – in fact, it’s quite the contrary, which will be illustrated shortly.
The second, political, argument might concede Richard Maponya’s pro-entrepreneurial critique that BEE stymies growth, or Moeletsi Mbeki’s material dialectic that it promotes rent-seeking, or Gwen Ngwenya’s anti-corruption analysis that race-based policy incentivises inefficiency in general.
Nevertheless, the argument goes, it is worth paying some economic cost for race-based law since it placates the masses who would otherwise overthrow law and order and elect a revanchist, black-first despot to replace the current compromising regime. At the end of the day, as Saffers like to say, if the Rule of Law collapses, that will cost more than any possible drag BEE has placed on job growth.
But is race-based law the will of the masses, and would scrapping BEE trigger revolution? The Institute of Race Relations commissioned Markdata to do an ‘omnibus’ survey (demographically representative across gender, race, income, in all nine provinces) that produced quality statistical data on the matter.
Politicians talk up racism
It showed that, from a blank list, 95% of respondents did not identify racial discrimination as a major problem, 80% said they suffered no racism in the last five years, and most agreed that politicians talk up racism to hide their own failures.
So racism is not occurring anywhere near the rates that would explain why the majority of youth are unemployed, why there were two technical recessions between Ramaphosa’s ascension and Covid-19, and much less why electricity is erratic and sovereign credit is rated junk.
The survey dug deeper into people’s attitudes about BEE in particular. Almost 75% agreed that, with ‘better education and more jobs’ alone, ‘the present inequality between races will steadily disappear’. So, most people also do not think race-based law is necessary to reduce racial inequality.
When given limited choices about the ‘best way to improve lives’, about 8% chose more race-based law, while over 70% chose ‘more jobs and better education’. So, most people think a race-neutral way forward is ‘best’.
Asked who should be appointed to jobs, under 20% preferred ‘only blacks’, while more than 80% preferred merit over race. The racial breakdown of those who said they preferred ‘only blacks’ is: coloured (8%), Asian (6%), black (19%), and white (13%). Food for thought.
The survey set up a direct competition between race-based policy and a policy that would devolve redistributive state spending into the hands of citizens through sectoral vouchers. On the latter option, using taxpayer money, people would be able to decide for themselves who to hire to build RDP homes, what low-cost schools to send their children to, and from which clinics to get care. Awaiting the results made me very nervous.
The question was, ‘Would tax-funded vouchers for education, healthcare and housing help you get ahead more effectively than current Affirmative Action/BEE policies?’
Over 70% said ‘yes’. Less than 20% said ‘no’. Need-based vouchers beat race-based policy 7 times out of 10 in a one-on-one contest. I’m very fond of analysts who explain the profound discovery that race-based policy does not work and cannot work – but, look, if you’re saying that to 7 out of 10 South Africans, you are preaching to the converted. I know the feeling, I’ve got used to elders spitting after they say ‘BEE’ in rural South Africa, whether they’re spitting in Zulu, Sotho, or Afrikaans.
The only race group in which the competition between race-based policy and need-based vouchers was remotely close was the white group; 55% of whites prefer the voucher system, while 35% thought BEE was more likely to help them get ahead. That’s a result that young people call ‘spicy’.
Tax-backed vouchers
In short, among black, Asian, and coloured respondents, over 70% preferred tax-backed vouchers for social spending to race-based policy. If Ramaphosa wants to ‘review’ BEE, he could begin by thinking of all the reasons most people would rather deploy grants and vouchers than cadres who treat race as a proxy for disadvantage.
Can the president afford to review that? He is a billionaire. He could afford to send his children to the best private schools in the country. He could afford to buy the best school in the country. Maybe he could afford a little personal review of what counts as ‘disadvantaged’ for him and his family.
Probably not, though. Political stability has been confused, both within Ramaphosa’s enigma, the ANC, and the commentariat for ANC unity. A person-by-person review of cabinet and the ANC NEC indicates that the party could not survive a repeal of race-based ‘Blatant Elite Enrichment’. Thus Ramaphosa is for enhanced racialism.
But what the country really needs is non-racialism, as enshrined in the Constitution – and espoused by a supermajority of South Africans.
As the Racism is NOT the problem initiative argues: ‘The movement from racial distraction to commonsense action starts with realizing that if you want to work with people regardless of race you are not alone.’
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