Negotiated economic change can boost market system
Expecting ANC leaders not to talk about economic change is like expecting corporate executives to denounce profit. The question is not whether the ANC calls for change but who in the ANC does it and why.
Commentators sympathetic to business now declare that President Cyril Ramaphosa has lived up to expectations on state capture, but has disappointed on policy.
One reason for the second judgment is his support for land expropriation without compensation. Since he is now backing national health insurance, this too will no doubt be seen as a sign that he is a captive of radical populists.
This misreads political reality. Any ANC leader – and any politician in touch with much of black opinion – has to face a reality that is hardly new to readers of this column: many of the inequalities that existed before 1994 are still with us, and this society is still a long way from racial equality.
Given this, to expect an ANC president to focus on marketfriendly policies without talking about inequality is a fantasy.
It is open to question whether any policy that ignored equality would really be market friendly, since it would open the market to constant attack.
But even if you believe poverty and inequality are good for the market, ignoring them is not good for the career of anyone who leads an organisation, many of whose supporters are on the wrong end of these realities.
ANC and state presidents are not elected to serve the markets – they are meant to serve voters.
This is missed by those who continue to complain whenever an ANC leader says something that suggests the government should do something to change the patterns of the past.
Some who protest will argue that they know we have a poverty and inequality problem but that you don’t need radical measures to fight them. But what has been tried since 1994 has not worked — an ANC president who insists the country simply needs to return to what it was doing before Jacob Zuma would not be taken seriously by the ANC and many of those who vote for it.
So anyone who wants to lead the ANC now has no option but to insist that we need a new direction.
But who leads the governing party and is responsible for seeking economic change matters because how political leadership approaches this task is crucial.
There are, broadly, three ways to tackle the burdens of the past that hold the economy back.
The first is to take on the market system. This has very little support in the ANC, partly because many of its supporters are now part of that system and would lose if, for example, property rights are undermined.
The second is to use the burdens of the past as an excuse to advantage a select few at the citizenry’s expense; this is the approach of patronage politicians, including our last president.
The third is to negotiate change, which is most likely if the government says what it wants and engages business, labour, professionals and other economic interests in a search for agreement on how to reform the economy. This third option should strengthen, not weaken, the market system.
The ANC’s biggest failure in office is that it has not spelled out a clear programme for change and engaged economic interests on it.
Whether Ramaphosa is serious about doing this is unclear. But markets are much more likely to thrive if he is. A government committed to tackling inequality is no threat to the market – if it has a strategy and is committed to improving most people’s lives.
We need a government that is more serious about change, not one that sweeps it under the carpet.
Friedman is research professor with the humanities faculty of the University of Johannesburg