Theresa May’s example can help us too

THE new British prime minister, Theresa May, has a lot on her plate. While she instinctively knows that the economy is in trouble because of the June 23 vote to take the UK out of the EU, that the exit negotiations will be formidable and that Britain is going to have a huge job convincing the world it is still a serious political power, she also knows a deeper job remains.

That job is to heal her country. The UK’s political wounds are still raw, but more painful are the fissures in her society between the rich and the less well-off. Those millions of Brexit voters who feel alienated from the glitzy big cities and comfortable shires and counties remain a cancer in British society, just as the alienated are in ours.

In richer nations like Britain, inequality could reasonably explain the alienation. In a poorer country like South Africa, poverty, and not inequality, is our cancer. We confuse the two at our peril because the remedies are so different and if you misdiagnose a disease you’ll give it the wrong medicine and it won’t heal.

Nonetheless, and in whatever form it takes, the clear answer for a troubled and globalised world was at the centre of May’s first remarks as prime minister. She would, she said, strive to put social justice at the centre of her politics.

The same applies here. We simply have too many people not with not enough, but with nothing at all. No society can survive our rates of poverty and unemployment.

May’s first policy hint was to work towards legislation that would require union representatives to sit on every company board in the UK. It has become a first port of call for many people trying to think of ways to make modern capitalism work for more people because it energised Germany after the victorious allies imposed the requirement on German industry after World War 2.

But there are literally hundreds of ways a determined government can work to ensure greater social justice in a market economy.

Here, the National Treasury could, without consultation, simply begin to reward companies for employing more people, and to make the rewards bigger for employing more unskilled people.

It simply has to use its authority over taxation to incentivise the right kinds of behaviour. It could reward shareholders who hold on to their shares for longer and don’t speculate. That would help company CEOs stop looking over their shoulders all the time to meet quarterly earnings forecasts. The more pressure there is from shareholders, the more CEOs cut costs (jobs) to meet their earnings targets, especially in a slow economy.

But the greatest barrier to prosperity in South Africa is the one between business and the poor. Right now, established business talks to the government through the black elites it has co-opted through BEE schemes. But BEE destroys capital or at the very least ensures that capital is used poorly. Government then “takes care” of the poverty problem, the blacks with nothing. The result is a looming social catastrophe.

Moeletsi Mbeki has brilliantly argued in a new book, A Manifesto for Social Change: How to Save South Africa, that it is the distance between capital and the poor that most threatens this country and he is right. Business, the owners of that capital, needs to find a way to speak to, to join and to champion, the poor. Business needs to lose its fear of the state. Its salvation lies in becoming as determined to eradicate poverty as it is to servicing its shareholders. Government, the Treasury, could oil those wheels if it were not so absorbed with enriching just a few.

It is South African capitalism, unchanged since the time of Cecil John Rhodes, that needs reform more than anything. It should be appalled at the poverty around it instead of relying on corrupt politicians to shield it from reality. Social justice should be its rallying cry.

A more representative electoral system would help, even if it meant more ANC seats in parliament. But drawing poor people into a system where they can actually see and touch directly elected representatives would transform the dynamics of our politics and, ultimately, our economy.

We can save South Africa, but the salvation will have to be economic. Politics is not enough anymore. Theresa May has figured that out. How long will we take?

Business should be appalled by poverty instead of relying on politicians to shield it from reality