JOB CREATION: Sadly, Zuma doesn’t have a magic
banning of labour brokers and other restrictive labour law provisions are calculated
precisely to discourage the private sector
EXCEPT IN SOCIETIES ruled by that defunct and destructive ideology known as Communism, it’s universally accepted that, by and large, it’s not the function of the state to create jobs but rather that of the private sector. There are, of course, exceptions to that. For example, in times of war, governments have no option but to deny citizens those rights they normally enjoy. Such exceptional use of power in democracies should be limited to times of emergency and used sparingly and carefully.
Thus Franklin Roosevelt embarked upon a vast array of Federally funded projects in an effort to ameliorate the effects on ordinary working class Americans of the Great Depression. One of those was the Tennessee Valley Authority, a gigantic hydroelectric project launched by Roosevelt in 1933 that became the largest energy provider in the United States, having given work to more than 30 000 in its initial construction.
It then played a pivotal role in supplying energy to the defence industry in the US. Since the Fifties it’s been self-funded, raising bonds in its own name and achieving 99,999% reliability of supply.
Then there’s the Dwight David Eisenhower National System of Interstate and Defence Highways, which changed forever the economy of the US through huge increases in mobility across the 42 000 new miles of broad highways.
All this brings us to President Jacob Zuma’s pledge that 2011 will be the year for job creation in SA. Sadly, Zuma doesn’t have a magic wand with which to create those jobs. If anything, his administration’s legislation – such as the proposed banning of labour brokers and other restrictive labour law provisions – is calculated precisely to discourage the private sector from employing people.
We can all learn from experience. Zuma should look back at the errors of Thabo Mbeki who, instead of embarking on sorely needed public works projects – such as the proper funding of Eskom, the erection of new dams, schools, hospitals and the building and improvement of roads – embarked instead on an insane and pointless frenzy of weapons buying.
As is now universally accepted, the sole purpose of the arms deals was to enrich loyal ANC cadres. That culture must be ended. It must be rooted out and the proper interests of the ordinary people of this country pursued.
And those interests won’t be served by the siren call of collectivism to ride roughshod over the medical profession, already direly short of skills and growing increasingly so. For example, an anaesthetics practice in Johannesburg recently lost half its partners to overseas offers, mainly from Australia.
Willing buyer, willing seller as the basis for land transformation is under threat, meaning we’ll lose increasing numbers of skilled and experienced white farmers at the same time we have moved from a net exporter of food to a net importer.
We now have plans to force small businesses created by whites to have black partners, who invariably will not have cash or expertise to contribute. Thus whites will cease creating small businesses that, economists concur, are far and away the most prolific creators of jobs. For example, studies in the US have shown that while the top 500 companies are almost constantly shedding jobs, small businesses are almost constantly creating them.
Zuma has himself recently expressed reservations about the narrow trend of black economic empowerment in SA. That’s very much to his credit, given that many of his cohorts and family members are beneficiaries of a system that has reduced wealth creation before bestowing what’s left on the undeserving, who then dissipate it on a high life of conspicuous consumption.
Thus if President Zuma wishes to create jobs – or, rather, have them created – it’s essential business be encouraged to innovate, that entrepreneurs be encouraged to take risks, that ordinary workers be encouraged to start on the bottom rung and work their way up. Government must involve itself in properly and ethically managed public works projects that can provide work opportunities to the masses and a better country for all our citizens.