YOU know that snort that people render online as “bwahahaha”? I did that while reading a letter in the Times from a reader responding to Johann Rupert’s recent speech in which he went all died-in-the-wool free-market-ideology on us.
While affirming everything he said, the letter writer called him Anton Rupert – what’s wrong with this picture, hmm? Then he ended his letter by saying: “It’s time to bring in experienced grown-ups”. Was that term really necessary? Does it add to nation building? Phooey.
There’s been widespread head-nodding over what Rupert had to say. Any speech that slams unions is going to get that. And of course, he’s right that there are some problems with unions and union activity (not all of it the ‘fault’, if blame is to be laid, of the unions – I still question the negotiating tactics on both sides that led to five months of strikes).
Rupert said: "Trade unions destroy jobs. Their job is not to create jobs, their job is to protect people who are already employed. They do not represent the interests of the unemployed."
READ: Johann Rupert: Honesty in government under attack
Really? Yes, trade unions do protect the jobs of people who are employed, and working conditions. That’s their core mandate and has been back to the days of the Tolpuddle martyrs. Do they actually destroy jobs? If you agree with Rupert’s line of thought, you might say they hamper the creation of new jobs, but they don’t actively destroy jobs.
But is it even in the union’s interest to hamper the creation of more jobs? Even if you think of the union simply as an entity which needs to survive, the creation of more jobs is in its interests, as it also means more potential union members.
Do the trade unions really not represent the interests of the unemployed? In South Africa, the picture is complicated. Each wage-earner is very often supporting many people beyond his or her immediate nuclear family, people of working age or older.
I don’t think of myself as a person with dependants (no kids!), but when I applied the concept of breadwinner to myself, I realised that even I use a percentage of my monthly income to assist my mother and a young person who is not a relation. In the townships, I’ve come across breadwinners who have eight dependents, and in one more rural area, I was told the average earner supports seven people.
So when trade unions work to increase minimum wages or demand decent increases, they are, in fact, protecting the interests of those unemployed people.
And it’s not as simple as saying: “Well, if we can employ people at lower wages, those unemployed people will get jobs.” You know it won’t work like a simple equation – one job at R8 000 a month gets divided into four jobs at R2 000. Instead of slamming unions, we need to get more creative about job creation and support small business rather than big.
Then Rupert said: "We must imitate the choices of successful, not unsuccessful, nations.” Uh-huh. Like the USA and the UK, right? “Successful choices in economic policy include open markets, transfer of profit, protection of property rights, incentives for investment and a strong, convertible currency.”
Ummm. “Britain had the most protected economy in the capitalist world in the late 18th and the early 19th century. Much of this protection was provided in order to promote British manufacturers against superior foreign competitors in Europe […].
“The US went even further. Taking inspiration from British protectionist policy, […] the US adopted protectionism in the 1820s and remained the most protected economy in the world for most of the next century.” (Ha-Joon Chang in the Huffington Post, June 19 2014)
In fact, looking at historic evidence, it seems that what’s healthy for an economy is the opposite of what the ideologues will tell you: not only did they start (and in some cases remain) protectionist, Europe, Japan and the USA grew at their fastest rates in the period between roughly the 1950s and 1970s, when taxes were high and markets were regulated.
And while central planning à la the USSR (the five-year plan for production of screws and bolts variety of planning) is undoubtedly the route to disaster, many a progressive and thoughtful government has steered its economy – including South Korea, which pushed and incentivised and leant on business to create the kind of economy it believed would serve the nation.
And finally, to quote Chang again: “If you read the standard account of Singapore's economic success in places like the Economist or the Wall Street Journal, you will only hear about Singapore's free trade and welcoming attitude towards foreign investment.
You will never hear about how almost all the land in Singapore is owned by the government, while 85% of housing is supplied by the government's housing corporation. Twenty-two percent of GDP is produced by state-owned enterprises (including Singapore Airlines), when the world average in that respect is only about 9%.
“To put it bluntly, there isn't one economic theory that can single-handedly explain Singapore's success; its economy combines extreme features of capitalism and socialism. All theories are partial; reality is complex.” (My emphasis.)
Yes. So let’s not be seduced (or frightened) into following a party line; let’s look at what really works, and adopt ideas that we think would translate well in our economy. That would genuinely be in the interests of the unemployed.