Unpopular choices await to act in nation’s best interests
Is it better to be popular than right, or can you be both? By some measure, almost by definition, populism will always prevail, given enough time. Whether or not the political system is a democracy, what the people want will surely be what they end up getting. It must be that way, if for no other reason than to maintain peace and stability. Even if the enduring ideology has a religious or other more fundamental basis than simply voting rights, it must remain popular to persist.
Within the various democracies across the world there is nevertheless just as wide a divergence in the latitude given to the government by the people as there is in the different levels of authority or force of rule exercised by elected leaders. Increasingly, across the world, the judiciary has been brought into the equation to settle differences of opinion and interpretations between elected leaders, those who elected them, and those who didn’t. This is all very well when everything is going swimmingly, but not when there’s a need for change.
SA finds itself in the middle of so much change. It will be impossible to go where it needs to with only popular actions. This is the conundrum.
To get into power, to implement the policies that are necessary and right, the popular vote first has to be won. Inevitably this involves compromise. Once in power though, parties are surely obliged to do what is in the best long-term interest of the people, no matter how difficult or how unpopular.
The more ambitious the political manifesto, the more difficult are the economic mandates that are required to support its execution.
In people’s personal lives the balance between being disciplined and behaving recklessly offers similar choices and consequences. The difference is that individuals have the rest of their lives to get it right, and it’s just their life. Leaders of democracies have limited time.
In SA, with its vast economic inequality, the choices are so much more stark and the consequences of failure so much more dire. Making the right choices, doing the right thing, becomes even more necessary.
The choice is essentially between consumption and investment. But, as the French president recently said in parliament: “If you want to share the cake, you’ve got to have a cake.”
In business, it is straightforward and there is common purpose. In the first instance, any business must demonstrate its ability to survive without help (or hindrance).
The rules of survival have been established. The ratios in the income statement and balance sheet required for prosperity cannot be tampered with, or even overridden for the sake of immediate popularity.
Entrepreneurs can’t borrow more than can be serviced or repaid, even for capital projects, let alone to fund consumption. If they do, they will either fail or be taken over.
Sustainability requires costto-revenue ratios to be sacrosanct. Breaching these will inevitably lead to an erosion of capital. Choices will start to emerge between self-preservation and growth. Competitors start filling the gaps businessowners once owned.
Entrepreneurs simply cannot contract outside the economic realities of the company and expect to survive.
When political and economic mandates become mixed, neither will succeed. Whether in the form of imposed obligations or subsidised services, the separate purpose of a social, noncommercial mandate must be seen for exactly what its success or failure must be and be judged accordingly. Performance evaluation, funding and management criteria aren’t the same for public service execution and private sector competitiveness.
If entrepreneurs start paying higher wages for less work, they will never stop. It must be a fair deal to survive. To convince everyone that it’s worth it to defer consumption in favour of investment, there first has to be a shared vision of the future, an honest understanding of the present and a very high level of certainty that the economics of the end-game will be achieved and shared.
When investment back-fill is required, when companies have fallen behind and when the company isn’t yet generating sufficient surplus to make up the deficit, entrepreneurs will have to get partners and give them some of the game to save the game.
As the truth of various backlogs in SA become more clear and obvious, it’ll be obvious what to do. SA must invest. I think it will.
ENTREPRENEURS SIMPLY CANNOT CONTRACT OUTSIDE THE ECONOMIC REALITIES OF THE COMPANY