Share risk rather than divide land

IT IS EASY, and often tempting, to mock the secretary-general of the ruling African National Congress (ANC), Gwede Mantashe. But if I were ever unfortunate enough to have to become a politician, I would want him to have my back. Gwede can play the fool, waffle endlessly as he winds his way around questions, and, where not much is at stake, he can sound every bit as harrowing as Julius Malema.

But he also has an unerring ear for a real problem.

Ever since the Land Affairs Minister, Gugile (Gugs to his friends) Nkwinti, proposed soon after the election (clearly spooked by Malema’s Economic Freedom Fighters) that farmers hand over half their land to their labourers (which half the government would kindly hold in trust for them), the land issue has begun to glow red hot.

Nkwinti is ANC old school. He has no experience in business and, I am sure, as little as a farmer. He has spent his life in the struggle. He is, by all accounts, a lovely man, as are many of his compatriots.

It doesn’t surprise me at all to hear people of his vintage suggesting we should all just share stuff. And it is just as well the party has people like Gwede to step in when things get out of hand.

Nkwinti’s policy musings have three obvious and fatal flaws. A farmer who lost half his farm would have his loans called in, and all farmers live on debt all the time. Their land is the only thing they can borrow against.

Two, just because you’re a farm worker doesn’t mean you necessarily want to be a farmer. Nkwinti’s proposal traps you on the land. Your “stake”, which he will hold, will not be transferable to your children.

Three, the proposal makes a mockery of the ANC’s often bewildering obsession with food security. The big farms Nkwinti was talking about guarantee our food supply.

His divided farms could not possibly do the same. Farm sharing is to food security what Thandi Modise is to pigs.

But that doesn’t make the problem go away. Gwede met commer-

THICK END

OF THE WEDGE cial farmers in Johannesburg earlier this week. First, he all but killed the Nkwinti idea: “We could agree the 50% sharing of land between farmers and workers is not a good idea,” he said. “But then we need to hear what is the good idea.”

I think that’s a reasonable question. I want this land issue resolved, and soon. I don’t want to have to fly all over the world to see my children when I’m old. What is the Good Idea? In my humble opinion the answer lies not in sharing property but, just possibly, in sharing risk.

There really is no reason we cannot make changes to the way we create wealth in SA. We simply have to understand that unless we maintain a big private sector, driven by profit, we will have nothing. No wel-

We must find an inclusive consensus about wealth creation in SA — we need to democratise our capitalist economy, not destroy it

fare, no “delivery”, no schools and so on. The taxes on private sector profit pay for pretty much all of that and you can’t tax a loss.

So why not (hypothetically, of course) legislate that labour owns, say, 15% of all farm businesses over a certain size, or all businesses over a certain size for that matter? It could be in the form of a trust or any other reasonable and properly managed and audited arrangement. If there are audited profits, the workers take 15%. If there are losses, the workers share the loss. If money has to be raised, the workers share the risk and they go to the bank with the farmer. If the farm or business is sold, they get 15% of the net.

The point is that without some wider socioeconomic consensus in SA — built primarily on how we create and distribute wealth — we will always live on our nerves here. We need to democratise the way we create wealth, not destroy it.

The Allies solved the problem of social division in a defeated (West) Germany by imposing a form of sharing on the economy. Unions would have a place on all company supervisory boards, from where they could vet executive strategy and play a part in deciding who runs the company. They call it mitbestimmung. It worked a treat, dragging Germany out of the ruins of its Nazi past to become the pre-eminent exporter of manufactured goods in the world.

My thoughts about sharing risk may be unworkable but, for certain, if we cannot find consensus around creating an inclusive way of creating and distributing wealth in this country, we will, before long, have lost even the opportunity to try.

TALKING of which, what kind of madness would persuade the mining industry and the Department of Mineral Resources that not inviting the leading platinum union, the Association of Mineworkers and Construction Union (Amcu), to its annual Mining Lekgotla in Johannesburg this week was even a vaguely sensible idea?

How do you create a consensus for a traditional industry in as much trouble as mining is in, without all the main stakeholders agreeing to it?

Amcu may be difficult, impossible even, but they are a fact of life, just like rich farmers are. You can’t dream up, whoever you are, a future for SA that doesn’t include business, labour and the state. That’s all of business and all of labour.

And it isn’t only the government and business that forget this. The National Union of Metalworkers of SA’s assumption that it can impose its recent wage settlement with big manufacturers on smaller businesses, I predict, is going to crash and burn in the courts.

COMING back to work after a long break (during which I did almost all my reading online), it has been gratifying to track just how strongly both the Business Day and Financial Mail digital operations are performing. Obviously we can’t match the heavy general news brands such as News24 (2.6-million unique browsers in July, as recorded by Effective Measure) or TimesLive (1.2-million uniques).

But for sites that for the most part generate their own copy, Business Day and the Financial Mail are doing seriously well (480,000 and 65,000 uniques, respectively. Those are increases of 10% and 14%).

The Financial Mail is now twice as big as it was when I went on sabbatical in May. Of course, it’s still hard to make money online even with really big digital numbers.

I’m sure the Mail & Guardian (835,000 uniques) and the Daily Maverick (177,000 uniques in July) are not standing still but the nice thing about digital is that if you spot a really good idea you can copy it almost immediately.

In the meantime, Financial Mail editor Tim Cohen has given me a new (and not-quite-unique) digital column — to recommend the great reads I am finding in print and online. All being well the new feature should be up on www.financialmail.co.za as I write. I hope you enjoy Bruce’s List.