Economy must be shifted

The SA Communist Party (SACP) participated in the parliamentary public hearings on the competition amendment bill. The strong objection to the bill was surprising because no substantive arguments on how these amendments would adversely affect the economy were presented. The arguments were ideological, aimed at protecting white capital’s interests.

They were inherently self-defeating. An overconcentrated, stagnant economy benefits no-one. And neither does an economy that excludes the vast majority of the country’s citizens, is undiversified and is unable to absorb new entrants into the labour market.

Does it matter if the government intervenes in the economy to rectify glaring market failures if outcomes are positive? Governments in the US and UK intervene to advance national interests — through protectionism and Brexit, for example.

SA has created huge conglomerates in the past. While some have been unbundled, the networks and linkages remain, with tentacles in virtually every sector, making it difficult for businesses outside the networks to survive.

The comfort of monopoly leads to stagnation because often, when the market is secured, the incentive to modernise and expand is removed.

Given that diversification and growth in the economy has not happened naturally, interventions through such things as industrial policy, competition law and well-capacitated institutions become necessary.

The SACP supported the bill, accepting that SA is a capitalist society. It rose above ideology and made policy recommendations that will accelerate job creation and reduce inequality. It said “no” to high costs in food, healthcare and education. It said yes to co-operatives, stokvels and worker-owned entities being enabled to participate in the economy.

People who oppose the bill should transcend ideology and place SA first.

Reneva Fourie Via e-mail