How Ramaphosa moved the ANC’s heaven and earth
His statement that ‘the state does not create jobs, the private sector does’ is a dramatic about-turn for the ANC
The magic words were at last spoken aloud, and the spell was instantly broken. The state does not create jobs, the private sector does. A sentence so innocent it might be a topic at a high school debating contest, or an essay for an Economics 1 course. Yet President Cyril Ramaphosa’s assertion in parliament that it is not the government’s role to create jobs is more than just a statement of an observable truth. In the ANC’s world it’s the equivalent of the astronomer Galileo Galilei declaring that the Earth does indeed orbit the sun. Not the other way around.
Not since FW de Klerk announced to a shocked and delighted world in February 1990 that “the season of violence is over” (or just starting as it turned out) has parliament been presented with such a cold-blooded slaying of an ideological dragon. In De Klerk’s case it was the unbanning of previously suppressed organisations; in Ramaphosa’s it’s the defenestration of an idea that defined the whole liberation effort. For decades, the takeover of the state was the holy grail of the struggle.
The ANC inherited a state that was reasonably fit for purpose, even if its scope and vision had to be broadened and refashioned to serve the people, especially the poor who were the imagined beneficiaries of the promised largesse. Instead it was refashioned to serve the ANC, not its lofty goals, but its actual personnel. And regardless of the checks and balances (all of them in turn sources of big-money jobs), billions were stolen, billions misused and billions blown on weapons of self-destruction. To crown it all, this siphoning of public funds acquired a Shakespearean epilogue with the climatic capture of the state by the immigrant Gupta family, aided and abetted by local bag carriers in the Union Buildings and Luthuli House.
Like a drunken uncle at a family wedding, our state is wobbling at the knees, desperate for another drink courtesy of the taxpayer. Crippled by politically-led management, the public service churns out bureaucrat millionaires, keeping the bosses happy while the unions diligently police and discourage any initiative on the shop floor. The barest minimum is the standard.
Unguided by any ideology save that of maximising earnings and minimising effort and responsibility, a whole cadre of politically appointed apparatchiks leeches off the taxpayer, and off the workers below. Beyond the state proper, in state-owned enterprises, the clammy grip of political power has reduced what were once centres of excellence to cesspits of debt and decrepitude. Little wonder in this context that the government should increasingly claim the extension of social grants to 18-million beneficiaries as one of its major achievements.
Like a drunken uncle at a family wedding, our state is wobbling at the knees, desperate for another drink courtesy of the taxpayer.
When the likes of the Soviet Union and Mao’s China were still part of the political scenery, haters of free enterprise could at least point to these two role models to support their contention that societies in which the state dominates the economy do work. Leaving aside the millions that perished of starvation in these two former avatars of the new Utopia, it was obvious to more careful students that even in societies with free-enterprise economies, the state has always played a large and even central role in economic development, the US being the best example with its sprawling military-industrial complex. They just don’t turn it into a religion.
What was at issue was not the extent of state involvement in the economy as such, but rather the degree to which the state obliterated or compromised civil liberties. In stifling freedom and enterprise, the state-led economies of the Cold War era were doomed to hit the wall, which they duly did in Berlin in November 1989.
Since then, a new character has joined the dramatis personae, the “developmental state’’, a lithe and energetic creature with the interests of the people at heart, a finger-in-every-pie type of state, an all-knowing and beneficent thing: in other words a mirage. The ANC loves the developmental state (or did) which is not anti-business as such but allows for lots of meddling and panders to a lack of “faith’’ in free enterprise.
For Ramaphosa to say now that the state does not create jobs gives his opponents ammunition to try to topple him at the ANC’s conference later this year. They’ll lose this battle, though, unless of course they want to accelerate our dreaded embrace by the International Monetary Fund.
Critics were also aghast at Ramaphosa’s suggestion that the state’s main role is to enable business, which is a heresy in that previously many thought the state’s raison d’étre was to wage ideological war, destroy jobs and to make it as hard as humanly possible to employ a person who needs a job.
Parallel to this battle between traditionalists and iconoclasts over the role of the state, competing interpretations of the so-called Chinese model have emerged. Whereas China was previously beloved of the ANC because of the role the state played in its economy, we are now increasingly told that, no, it’s private enterprise that is the essential ingredient, even in China.
It’s interesting to hear Ramaphosa acknowledge this much, playing up the role of private sector interests in China which are substantial despite the war on enterprise waged for decades by Mao Zedong. In his reply in parliament, Ramaphosa referenced Mao’s nemesis, the Chinese reformer Deng Xiaoping, who opened China to the West and promoted free enterprise. No place for Mao in the ANC’s heroes’ acre any more.
So Ramaphosa has fired the starting gun for what will be an ideological battle without end. Meanwhile, if politicians, especially from the ANC, made more noises that convinced more people with money that SA does have a future worth investing in, we might even see an end to the alleged investment strike that’s sometimes blamed for our woes, instead of the ANC state.
Here’s a question for that section of the ANC that hasn’t yet fallen in behind its new Galileo: if business is that intent on profit as alleged, why would it willingly sit on cash it could otherwise invest in productive and profitable enterprises? The answer to that is as neat a summary of our self-inflicted troubles as one could get.