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Up by the bootstraps

POLITICIANS, intellectuals, businesspeople and journalists declare themselves for or against. And, as so often happens, they talk at cross purposes.

The matter was put under the spotlight again at a conference of the Black Management Forum (BMF) this week, where various speakers voiced their frustration at the slow progress of black advancement in the South African economy.

A report of the Employment Equity Commission was cited, according to which whites still occupy 67% of top management positions, while blacks only had a 20% representation, Indians 5.1% and Coloureds 4.1%.

Minister of Labour Mildred Oliphant also weighed in: “I cannot understand in a society where there is no one who openly admits to have supported apartheid, where everyone agree(s) that apartheid was a crime to humanity and that it was evil, yet there are still people who disagrees (sic) with the thrust of the Employment Equity and Affirmative Action policies.”

Let us begin at the beginning: it cannot be denied that the under-representation of blacks in the economy is unhealthy.

It is unhealthy, because a black population of millions represents huge potential consumer spending, which could be a great stimulus for the South African economy. It is also unhealthy because a visible racial divide between the haves and have-nots (even though the racial aspect has been diminishing to a certain extent since the early 1970s) necessarily leads to social unrest – and, therefore, political instability.

A population group (in this case, blacks) which perceives itself to be blocked from advancement by another group (in this case, whites) will be inclined to take what they see to be their dues.

But let us try to view the matter rationally. Without exaggerating the parallel, there used to be another population group – the Afrikaners – who felt similarly aggrieved by another – the white English. How did the Afrikaners react? And can we learn anything from their reaction?

Defeat, despair and an inferiority complex

The fact is that the Afrikaners lagged far behind economically during the first few decades of the 20th century. According to the economist Professor Sampie Terreblanche, about two-thirds of the Afrikaners could be viewed as being part of the underclass (although other studies show that the extent of their poverty was still far less severe than that of the blacks).

Only 3% of company directors and 8% of managers were Afrikaners. Afrikaner capital controlled only 3% of the mining sector, 8% of trade, and 5% of the finance sector. Professor David Welsh describes the Afrikaners of the time as “impoverished, defeated, despairing, low in morale, and with a powerfully internalised inferiority complex”.

Their immediate gut reaction often was not much different from that of blacks today. In 1932, the then still young sociologist Professor Hendrik Verwoerd called for “a kind of socialist state” (for whites only, to be sure). Five years later, when he became editor of the Afrikaner nationalist newspaper Die Transvaler, he also proposed quotas of Afrikaner representation to which the economy had to measure up.

But in the end, a different approach was taken. This became apparent at a conference in October 1939 when the Reddingsdaadbond – an organisation devoted to Afrikaner advancement in the economy – was founded.

The chairperson, Professor Wickus du Plessis, proposed a direction “to prevent the Afrikaner people being destroyed in an attempt to adapt to an alien capitalist system, but to mobilise the people to conquer this alien system and to adapt it to our nature”.

In practice, this did not mean preferential treatment of Afrikaner entrepreneurs. For instance, a budding young Afrikaner entrepeneur, Anton Rupert, found that Afrikaner consumers were not willing to buy his products and services out of ethnic loyalty, but that he had to win them over by orthodox means – excellence and competitive pricing.

At the Black Management Forum conference, several speakers were scathing about what they saw as the ANC government’s failure to implement its own AA and BEE policies forcefully, even against the perceived sabotage by white business people.

That direction would fly against every principle of business management. As Rupert – in the end one of the most successful South African entrepeneurs ever – discovered, there is no substitution for standing on your own two feet and surviving by being as good as or better than the next company.

To be enabled to find your feet by AA or BEE for a shortish transition period could conceivably be defended. The problem is that this kind of temporary aid all too often (though, of course, not always) degenerates into permanence.

One of the speakers, Thandi Ndlovu, CEO of Motheo Construction, therefore talked sense when she said the time had come for black entrepeneurs to establish their own “sustainable” firms. This is the modern black counterpart to Wickus du Plessis’ speech in 1939.

The answer does not lie in artificial state measures to keep black companies on their feet. In the long run, this kind of crutch promotes bad business practices and services to the public; after all, the incentive to innovate and improve efficiency diminishes.

Like the Afrikaners did in the 1930s and 1940s: assault the bastion of capitalism and conquer it. Don’t sit back and wait for somebody else to do your job for you.

 - Fin24

* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.
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