An open letter to Patrick Craven and Cosatu

Dear Mr Craven

We are very different men, from very different generations, with very different views of the world. Nonetheless I respect both your opinion, and your contribution to the liberation struggle. But while I concede many of the points in your rather self-congratulatory letter to the ANC, I dispute many more. Not only are they bull-headed, intolerant and illogical — they are, on the whole, dangerously divisive.

I’ll skip over the proto-dictatorial, Bolivarian rhetoric about the “forces of reaction represented by the motley collection of opposition parties” and get straight to my main concern — your terrifyingly naive economic policies. You advocate a move away from primary goods like resources (or “raw materials” as you call them), and towards secondary goods. I agree with the first part of the sentiment, but when you call our manufacturing sector “key area for the creation of decent, sustainable jobs” I wonder if you’re living on the same planet as I am.

How, on earth, do you expect to be able to compete with the Chinese and Indian markets in manufacturing? They have enormous, relatively skilled labour pools and are largely unfettered by the kind of over-regulation and coddling of which your relatively unproductive membership are so proud. The hard fact is that manufacturing is a numbers game — there are few intangibles (except in luxury and high-end goods) and price is all important. Why on earth do you want us to bet our future on a race which we can’t hope to win? And as for the upper end of the market, the Germans, Americans, Swiss and other developed countries occupy that sector with some of the world’s finest craftsmen and women.

I am dismissing manufacturing completely? No — I’m just pointing out that it’s not the solution to solving our current unemployment crisis. And why ,on earth, would we want to bet the farm on energy intensive, high pollution, eco-destroying heavy industry when there’s a much more obvious solution: the service economy. From call centres to tourism to data processing, the world is crying out for millions of semi-skilled people to do these jobs. Let’s focus our resources on what we’re really good at — our absolute advantages — and not on the ugly battle of mass manufacturing.

Hand ups, not hand-outs

Then there’s the whole issue of social security payments to the poor. You point out that 15 million people now have access to such grants, and call for a “Basic Income Grant to provide a safety net for all citizens”. How do you expect the fiscus to support such a plan, given the strain our narrow tax base is already under? I fully support many of the current grants — vulnerable people should not be forced to live in abject and grinding poverty.

And yet in the next breath you say this: “The underlying tragedy however is that so many South Africans are solely dependent on grants. The priority remains to create work opportunities, with decent levels of pay, so that the poor can escape from their survivalist existence and enter the market as consumers.” I couldn’t have said it better myself, except for that weasel word “decent” which is only one removed from “fair” — another word that politicians (and, yes, Mr Craven, you are a politician) love to bandy about.

If you’re really so concerned about creating jobs, why are you and your colleagues so stubbornly blind to the fact that your policies are harming rather than helping job creation? Our current labour laws make hiring a new employee into a dangerous lottery. If they turn out to be incompetent, lazy, divisive, unreliable or even actively destructive and dishonest, there is literally nothing that an employer can do. They are stuck with this person for at least six months, or up to year, before all of the necessary red tape is completed. Even then, they are frequently summoned to the CCMA and stripped of yet more money. There are hundreds of cases where employees have embezzled large sums of money and, when fired, taken their employer to the CCMA and received yet more cash.

Killing our entrepreneurial spirit

Now while big established companies can largely absorb this sort of cost, it can (and does) ruin the small businesses that are the engine of new growth and job creation around the globe. Our labour laws are killing our entrepreneurial spirit — that’s a plain fact rather than merely my opinion. I am not in favour of repealing these laws and regulations completely, although Stephen Grootes’s refreshing suggestion has a lot of merit. I am simply in favour of taking a rational look at the unintended consequences of our current legislation and regulation.

You bring up the quintessential example in your letter, blustering that “the ANC will harvest a rich reward from the voters if the government is seen to be acting decisively to ban this human trafficking called labour broking”. Leaving aside the reckless and irresponsible conflation of providing employment to willing citizens with the kidnapping and slavery of unwilling victims, had you considered the idea that you and your socialist buddies might have created the problem in the first place? Labour broking grew out of a need — just as everything in capitalism does. That need was to not have to be sued every time you needed to cut back on your labour costs during a tough period.

Are there abuses in labour broking? Of course there are. Are there abuses in the labour market in general? Definitely — particularly on farms and in rural areas, which you rightly raise as an area of concern. But both those examples illustrate my point: the very people our labour laws are meant to protect are not being protected, while the people who need no protection are riding the CCMA gravy train for all it’s worth. In my own experience many cases taken to the CCMA are taken by the “top 10%” you complain about who earn R111 733 a month. Even the people earning a quarter of that shouldn’t even be allowed to go the CCMA — they are educated and affluent enough to take care of themselves, and should be treated as such.

Blame the rich…how original

And while we’re on the topic of income disparity, there’s nothing more tedious and predictable than trotting out the salaries of the CEOs of large companies and then comparing them to the poor. Yes, Marius Kloppers, CEO of BHP Billiton “raked in R54 million”. Guess what, Mr Craven, he earned it. BHP is one of the largest resources companies on the planet. It employs nearly 40 000 people around the globe and is worth R1.75 TRILLION. The company could choose any CEO they wanted. And if they want to retain Kloppers’ obvious talents they need to pay him market-related rates.

Those numbers may sicken you to the depths of your Marxist core, Mr Craven, but they are realities of a global economy. Kloppers is only paid that amount because the people who own BHP — many of them ordinary shareholders and pensioners — agreed (via the board) to pay him that amount. And why would they agree such a thing? Because he and his executive team made the company R100 billion in profits last year. So his share is 0.054% of that. If I was him I would feel a bit hard done by!

As I said at the beginning of this letter, I agree unreservedly with some of your points. In particular: “We are still sitting on a ticking bomb. If we do not act fast to respond to the increasingly desperate calls from our poor communities for houses, schools, clinics, better service delivery and a better quality of life, there will be uncontrollable social explosions.”

And yet our solutions couldn’t be more different. I think this stems from a truth that may be uncomfortable for you to swallow: you don’t actually have the interests of South Africa at heart — it’s the interests of your members that are your top priority. And yet this coddled, fractious and divisive force is a tiny percentage of our population — just two million people. As long as you and your brethren wield such a disproportionate share of political power, the wage floor will remain unrealistically high, and the unemployment rate dangerously high.

Yes, the children are our future

Where we do agree is that education is by far and away the most important priority for the future of our country. But as long as the public-sector unions are allowed to ruin young minds by disrupting schooling for months, all for greedy and unreasonable demands, then we don’t have much hope of a better future for the next generation. And please, Mr Craven, don’t imagine you or the ANC have hoodwinked us with the suspicious rise in matric pass rates. Putting a plaster over a serious wound may make you and your ANC buddies feel better, but it doesn’t help the hundreds and thousands of matrics whose certificate is now of dubious quality or merit.

You can tell from my tone by now that I am angry. You might well dismiss my letter as the mannered blusterings of a typical, privileged white male South African — a neo-liberal apologist and a classist (if not a racist). The thing is, Patrick, I love this country with all my heart, and its people (rich and poor). I want us to do well. I want people to have jobs — dignified jobs — and to lift themselves out of poverty the way the Indians, Brazilians and Chinese are doing right now. I want to start my own business — to innovate and add value, and above all create employment. And, yes, I want to make good money out of that and give my children a better chance at life than even I had. That’s human nature — that’s what we all want.

If you and the ANC continue to view those kinds of dreams with scorn and aggression, and continue to put in place policies that block the ability of ordinary people to help each other, then I fear we will never rise out of this morass. Please, Mr Craven, take a long hard look at the facts. If you do you might see that we’re both on the same side.

Kind regards
Alistair

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