Vodacom row over rewarding merit touches a nerve
Is this country’s economy really one in which smart people with good ideas can reap rewards whoever they are and wherever they live? If it is, why are so many people so angry about the details of a commercial dispute?
The argument between Vodacom and Nkosana Makate, who came up with the idea of free Please Call Me text messages, should be an unlikely magnet for public anger. Obviously, people are likely to be enraged if they feel a person was denied compensation for an idea that made billions for the company.
But the dispute has moved beyond that. The Constitutional Court ordered Makate and Vodacom to reach a settlement, so the issue is not whether he should be paid but how much. We don’t know how much Vodacom is prepared to pay, nor how much Makate wants, because the negotiations are secret.
The dispute has prompted deep and widespread anger among middle-class black people in particular. To name but one example, radio current affairs shows have been inundated by calls on the issue and there is a widespread consensus among callers and presenters that Makate deserves active support. They include professional people who don’t express public anger often. Even if most do not carry through their promise to cancel their subscriptions, the company’s reputation has clearly been damaged.
Why? Because, whatever the state of negotiations between Makate and Vodacom, many people are convinced he must have been wronged. Even if they are themselves quite well off, they believe this country’s formal marketplace is heavily weighted in favour of large corporations that are interested in protecting their dominance, not in rewarding energy or enterprise. And, since those they are seen to exclude from the market are overwhelmingly black, this is also seen as an attempt by whites to keep black people out, at least unless they submit themselves to the power of white-owned companies.
A common response in the mainstream dismisses these claims as fantasy peddled for dubious motives. This is often backed with figures showing rising black living standards and growing access by the racial majority to professional and managerial jobs. These figures are hotly disputed but, even if they are accurate, they miss the point. The market economy is meant to reward good ideas and hard work, whoever you are. It is hard to see why anyone who is poor should support the market unless they believe they will be able to move up the ladder if they have either.
But is it really true that anyone in a township or shack settlement who has a good idea can bring it to market and reap the rewards? Researchers find it is not that the big players have many ways of keeping them out. IMF senior executive David Lipton made this point in an address a while ago when he said product markets in this country act to exclude many from the economy’s benefits.
As long as this remains reality, middle-class people who might normally see corporations as national assets will eagerly join campaigns against them because they see them and the market in which they operate as protectors of privilege.
This creates pressure on corporations to avoid acting in ways that create the impression that they are interested in maintaining power rather than rewarding initiative and on all key political and economic actors to negotiate changes that will open the economy to people with energy and ideas, who happen to hail from the other side of the tracks.
● Friedman is research professor with the humanities faculty of the University of Johannesburg.