Put people power at centre of economic reform
SA still grapples with limited political and economic democracy and this needs to change
THE NELSON Mandela Foundation’s Annual Lecture is an important, yet often misunderstood event. Our aim is not to provide a platform for any speaker to speak their mind or to choose a popular or high-profile speaker. Instead, when we choose speakers, it is to engage with particular lines of inquiry and to inject new narratives into the public discourse.
Over the past few years, our primary aim as an institution has been to create dialogue on solutions to the seemingly intractable problem of poverty and inequality in South Africa and our chosen speakers since 2015 have reflected this aim.
In 2015, French economist Thomas Piketty delivered the 13th Nelson Mandela Annual Lecture. His lecture became a talking point across the country and greatly shaped the type of conversations at the highest levels despite his speech being critiqued by both economic conservatives as well as those who felt Piketty’s offered solutions did not go far enough to question the nature of inequality in South Africa.
While noting the greater international forces that have an effect on the political economy of South Africa, Piketty focused on four “rights” as domestic solutions, these being the right to work for a decent wage, the quality of public education, the right to access property and more ambitious land reform and finally economic and political democracy. Three years later, there has been some progressive, albeit imperfect, movement, a minimum wage has been passed by Parliament, access to higher education has opened up and there are major consultations under way on accelerating South Africa’s land reform process.
Yet South Africa remains with limited political and economic democracy. Worker participation in companies and participatory governance are not prioritised and the vast inequality in South Africa has meant that our political democracy has been overshadowed and distorted by the effects of growing concentrated economic power.
When then-president Barack Obama delivered his lecture three years after Piketty, his brief was to engage with not only the economy but also the very nature of democracy and the links between democratic ideals and inequality. Of his more contentious suggestions was to offer the solution of “inclusive capitalism” as a vision for this future. To quote him on his understanding ,of what must transpire in the economy: “We can learn from the last 70 years that it will not involve unregulated, unbridled, unethical capitalism. It also won’t involve old-style command-and-control socialism form the top. That was tried; it didn’t work very well.
“For almost all countries, progress is going to depend on an inclusive market-based system – one that offers education for every child; that protects collective bargaining and secures the rights of every worker; that breaks up monopolies to encourage competition in small and medium-sized businesses; and has laws that root out corruption and ensures fair dealing in business; that maintains some form of progressive taxation so that rich people are still rich but they’re giving a little bit back to make sure that everybody else has something to pay for universal health care and retirement security; and invests in infrastructure and scientific research that builds platforms for innovation.”
Of course, this had particular relevance in South Africa where the term closely resembles the policies of the state under the term of “inclusive growth” and as noted by economist Pamela Mondliwa during a recent dialogue held at the Nelson Mandela Foundation to discuss the Lecture, these suggestions are not very different to what South Africa already has. However, the outcomes are clearly not reflecting progressive change as poverty and inequality continue to increase. What was clear during the course of the dialogue and argued by Koketso Moeti is that there is a need to place people and the environment at the centre of our economic system. Inextricably tied to this is to build forms of economic democracy in the country.
This means that that Gordian knot of political and economic power needs to be broken. As we look for solutions we must consider that turning toward the good graces of the wealthy will not create the kinds of change needed.
Suggestions offered by Piketty, such as increasing board representation at companies, wealth taxes, access to land and overhauling Black Economic Empowerment, should be reconsidered. During the publication process of Dare Not Linger, a book on Madiba’s presidential years, it was clear that his focus was primarily on making democracy stick.
We need to consider our new economic project as essentially a democratic one and place people’s power at the forefront. To quote at an address made by Madiba to the South African Chamber of Commerce in 2001: “We must ensure that all South Africans have a sense of ownership in all sectors of society. The long-term stability of our democratic order is also dependent upon all sectors of the population participating meaningfully at all levels of the economy”.
Stability depends on the population participating meaningfully at all levels of the economy NELSON MANDELA STATESMAN