Publications
Partners
Mineral Resources Minister Gwede Mantashe last week expressed surprise and shock that Impala Platinum, which plans to lay off 13 000 mine workers, cares more about profit than it does about its people.
He could also have mentioned the fact that Lonmin has also stated that 12 600 jobs would probably be lost over the next three years.
Taking account of the average number of dependants each mine worker has and the knock-on effect of a loss of spending power, more than 250 000 million men, women and children are likely to endure additional hardship.
Mantashe must be aware of this, which is why his expressed surprise rings rather hollow.
Especially since he has spent most of his life in the labour movement, but also because much of it has also been spent as a senior office bearer of the SA Communist Party.
In these capacities in particular, he must have been made very aware of the fact that the business of business is business, and that the priority is profit.
Put quite simply – bosses and businesses that do not prioritise profit tend to go bust.
And there are some wonderful historical examples that highlight the fact that workers and consumers always take second place to the pursuit of profit.
It is also worth remembering that the man regarded as the father of free market capitalism, Adam Smith, opposed the concept of shareholder companies because they were so prone to corruption.
That was back in the 18th century in London, when a major corruption scandal, echoing our recent past, erupted. It involved at least one government minister and other prominent individuals.
As a result, the British government of the time effectively banned shareholder companies for more than a century.
In those early days, the bosses were personally liable for losses incurred.
But shareholder companies were again allowed to function and the idea of limited liability was introduced.
What this means is that a company, a shift, a mine or any other business can fail or close down, but the shareholders will still be able to walk away with the profits.
This is summed up in a verse from a Gilbert and Sullivan opera that I have quoted in the past:
“Though a Rothschild you may be, in your own capacity.
As a company you’ve come to utter sorrow,
But the liquidators say, ‘Never mind, you needn’t pay.’
So you start another company tomorrow!
Profit, first, last and always.”
This is the simple rule of the game by which liberal economics is played.
But I understand why Mantashe has expressed shock – he probably finds himself conflicted.
On the one hand, as a government minister, he must realise what the rules of the game are; on the other, he is part of a management structure that is supposed to create the conditions for the game to flourish.
But, as a politician in the governing party, he is also supposed to keep working people – the mass of voters – happy enough to keep voting for his party.
For Mantashe, it must be doubly difficult, because, as a proclaimed socialist, he is supposed, ideologically, to oppose the game itself.
The standard South African way out of this intellectual dilemma is the “two (or even three) hats” argument.
This holds that individuals may adopt different, sometimes completely contradictory positions, depending on the job they are doing.
In other words, their practice and the policies they preach are determined by whichever “hat” they are wearing.
Given the crises the country now faces, perhaps it is time to discard the “hats” and act on the basis of principled conviction.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
