Pondering At The Economic Crossroads

Published 12 years ago

The biggest economy on the African continent is turning 18 on the 27th of this month—as a democracy, that is.

As would be expected of anyone coming of age, South Africans are asking themselves whether the staple diet of politics and economics we’ve been growing up with since 1994, has made us the healthiest democracy we can be, or if it has stunted our development.

From the vantage point of die-hard arch-capitalists like Herman Mashaba, the newly elected chairman of the Free Market Foundation (FMF), Africa’s youngest democracy has serious deficiencies, if not deformities. The primary cause of its precarious state of affairs, Mashaba reckons, has everything to do with a deadly concoction of rigid labor laws, union protectionism, socialist rhetoric and rampant corruption.


Mashaba wants entrepreneurs to be left alone to make as much money as they want, pay workers what they thinks they deserve, and fire them whenever they feel like it.

The Congress of South African Trade Unions (Cosatu), naturally, feels Mashaba is wrong. The federation believes the single biggest stumbling block to the country’s prosperous future is unemployment. “And by employment, we mean decent work and not just any job,” says Cosatu’s president, Sdumo Dlamini.

At about the same time this issue of FORBES AFRICA went to print, Cosatu had just taken to the streets in a massive show of force, protesting against, among other things, the use of labor brokers.

Dlamini says the brand of capitalism that people like Mashaba subscribe to—whose mantra is ‘any job is better than no job’—is a big part of the problem. Part of the consternation against labor brokerage is that one worker can be paid far less than another who does the same job, at the same place, with the same skills and experience.


Not many people, in fact, will disagree with Mashaba’s correct assessment, that socialism, or socialism-inspired policies that our continent and the rest of the so-called third world once adopted, have not worked. But the anachronism of what is supposed to be the best system ever known to mankind is not lost to billions of dirt-poor people who have been failed by capitalism through crude exploitation of their abundant natural resources, environmental degradation, corruption of their leaders and a complete disregard for human rights.

Formed during the time of BJ Vorster, one of the most notorious of apartheid heads of state, the organization that Mashaba is now leading may not have been responsible for apartheid, but it stood by a lot more than it fought against, and many of its corporate members and stalwarts, wittingly or not, in fact benefited handsomely from the racist policies of the time.

The birth and rise of Cosatu is owed more to concrete shop floor wars—where workers had to fight in the companies that were run by the same gentlemen who belonged to the FMF—than to state-sponsored apartheid.

Mashaba is of course also correct, when he says business has been “too quiet for far too long.”


Where people have a problem is with him blaming others, for the cowardice and complicity of business. The truth is; post-apartheid business has not been too different from those we saw during apartheid.

Having been a political journalist for more years than South Africa has been a democracy, I have been both shocked and surprised by how business people were cowed, intimidated, and tended to pander, rather than speak truth, to power.

At least Mashaba wants to do exactly that. But he will have to appreciate that workers too, are entitled to the same. For indeed everyone, not just business, has a constructive role to play in the growth, development and transformation goals of Africa’s hitherto sleeping giant.

Business Unity South Africa’s CEO, Nomaxabiso Majokweni, makes the point very simply, yet cogently: “The socio-economic challenges of South Africa need all of us to work together; business, government, labor and community. We have to get both the economics and the politics right.”