DA’s policy proposals are counter-transformative

COMMENT

The Democratic Alliance (DA) holds its first policy conference this weekend to discuss and hopefully adopt both its values document and its position paper on economic justice titled “Economic justice: a sustainable development goal model”. 

The DA must be commended for making the documents public and inviting input. In this regard I thought it proper to participate and do so robustly. In order not to get lost in the maze of detailed socio-economic measures the party proposes in its position paper, I will first focus on the underlying commitments outlined in the draft values document and how these permeate throughout its economic plan. 

At the heart of the foundational values of the DA are individual freedom and equality of opportunity. 

Individual freedom

Individuals must be free to make choices on how to lead their lives as long as they do not cause harm to others, including the freedom to make choices in a market economy. The role of the state is to preserve and expand these choices, similar to what the leading proponent of libertarianism, Robert Nozick, argues in his 1974 book Anarchy, State, and Utopia. 

Recall what the DA leadership told us in the context of the hard lockdown: that government did not trust us as responsible citizens and that we had become a “nanny state”. These claims appeared not to appreciate the purpose of government, and did not take into account how South Africans were disproportionately equipped to deal with the pandemic, materially and psychologically.

Whoever believes that the DA is just about individual rights and that it does not recognise groups is mistaken. Well, the DA recognises that there are social groups based on cultural, religious, political and linguistic factors, but what does not exist are racial groups. According to its values document, there is scientific consensus that race itself does not exist. (We may ask which science — natural or social?) On the basis of this non-existence of race, we must accept that black and white people do not exist, all there is, are people. The DA proposes to empower the disadvantaged majority depending on a means test, rather than using racial metrics, thus, looking at the person’s social position. This would include some white South Africans.

This puts broad-based black economic empowerment (BEE) to rest. The DA’s criticism that BEE has not worked, instead, that it has served to enrich a connected elite and engenders corruption, is secondary. It is secondary because whatever the government has done in terms of the evolution of BEE policy, identifying loopholes and making efforts to broaden the benefits, really does not matter. The fact of the matter is that race does not exist. 

At least on putting BEE to an end, the DA has something in common with the “Black Like Me” gentleman.

Individuals are important. We can see that in the history of the development of humankind. Ervin Laszlo, in his book The Consciousness Revolution says that it’s not individuality as such that is the problem “but isolated individuality – the individual seen as separate, even cut off, from society.” 

Margaret Thatcher, a political figure held in high regard in the DA, said “there is no such thing as society… all there is, are individuals and families”. 

If there is one important lesson to be drawn from the coronavirus pandemic, it is the rude awakening to the fact that we are social beings. We must find the right balance between individual rights and the collective good.

The United Nations’ sustainable development goals (SDGs) are quite attractive, as generalities often are. The SDGs are the chosen framework for the DA’s economic policy, but the difficulty starts when things are taken to the level of specifics. The party proposes this framework, not only for the party but also for business. On empowerment, big business will look at the 17 SDGs and select where it thinks it would make the most social and economic impact — true to individual freedom. The preference in public procurement will be for the company that makes the most impact on the SDGs as against black economic empowerment, so goes the logic. 

This, it must be said, will certainly provide an escape for business from the specific and demanding conditions that the government attaches to its offerings to advance transformation. Think of the sector charters. Big business will really love it: there is no requirement for empowering historically disadvantaged people in the 17 SDGs.

There is also no connection between the DA’s interpretation of the 17 SDGs in its economic policy priorities and what business would prioritise — it’s up to business. If big business struggles to make a contribution to meaningful economic transformation even with legislated conditions that are meant to put pressure on business to change its behaviour, then what will be the outcome of the SDG model? Business leadership is most often occupied with the bottom line and return on investment to shareholders. Currently, the government is working on introducing mandatory employment equity targets for the private sector, given that relying on voluntary action has failed.

The problem with the DA’s approach to empowerment and equity in which race is not a factor, is that, among others, given our history, if the black majority does not see itself in ownership and management in corporate SA, this creates a legitimacy crisis. This can be exploited by populist rhetoric with the potential for instability, which in turn is not good for business sustainability.

Equality of opportunity

The DA’s second commitment is “equality of opportunity”, which should not be mistaken for equality. I acknowledge the DA does not merely talk of all South Africans being given opportunity, but emphasises providing everyone with enablers, including quality education, health, and land reform, so as to be capable of taking the opportunities. In this regard, the role of the state is beyond Nozick’s conception of an absolutely minimal role – that the state provides safety and security, protects private property and enforces contracts – the “night watchman”. The DA’s conception of the state with its small government would be characterised as classical liberalism. According to the DA, to give meaning to freedom, equality of opportunity is critical.

Equality is more demanding and would in some respect subordinate individual freedoms. Classical liberalism takes the view that once all are given equality of opportunity from the start, there is nothing wrong with any inequalities that will inevitably arise, as long as those who get ahead have gained their wealth legitimately, ie, they have not stolen. 

Michael Sandel in his book Justice: What’s the Right Thing To Do? says from a libertarian point of view, any intervention by the state to try and reduce economic inequalities by, for example, taxing the affluent to help the poor, is wrong. It amounts to coercion and is disrespectful of the right of individuals to choose what they want to do with their hard-earned money. If the affluent choose philanthropy, that is fine. It’s voluntary. 

Compassion, which is about concern and care for others, as one of the added values of the DA, comes across as an afterthought because it does not find expression in its policy proposals. Take the case of universal healthcare, which the DA thinks could be achieved without changing the basic structure of South Africa’s healthcare system.

There are some inconsistencies between the draft policies of the DA and the Constitution. Judge Dennis Davies in a recent  lecture on social justice and economic inclusion characterised the South African Constitution as social-democratic, and some justices have referred to it as transformative. 

The DA has some useful insights into the kind of state that it envisions in its first priority, but characterises the state as liberal — again, true to its foundational commitments. In its “whole society” approach to addressing SA’s socio-economic challenges, the party cites key stakeholders that will have to work together, and organised labour is left out. Whenever there is something to be said about workers in the document, it pertains to restricting their rights. This smacks of an attitude of suspicion and grudge towards the working class. 

How do you talk of an inclusive economy in a modern democratic state without recognising the rights of workers, including collective bargaining? Judge Dennis Davies in the same lecture highlights the importance of rights of workers as enshrined in the Constitution. 

The party declares its subscription to non-racialism. But its understanding of non-racialism in the South African context views non-racialism as irreconcilable with BEE and employment equity, and this is seriously problematic.

I have struggled to get a sense of the DA’s macro-economic policy approach, that is, its fiscal and monetary policies. Equally, the document is silent on micro-economic policies, such as trade, industrial and competition policies. Maybe industrial policy is a swear word within the ranks of the DA, maybe it’s considered too much state intervention. Paradoxically, the DA in Parliament often pressurises the government to provide industrial support to both agriculture and manufacturing, for example, the sugar and steel industries.

It might be advisable for political parties, when thinking through economic policy, to take stock of the changes in the global political-economic environment, including the latest ideas about capitalism as an economic system, its limitations and excesses in changing times and appropriate responses, such as the idea of stakeholder capitalism. 

The DA’s idea of unbridled markets does not seem to take into account global developments and reality. There are new ways of thinking about the role of the state, including the concept of “enterprising” government. One of the leading political figures of the DA, who left the party a few years ago, described it as schizophrenic on matters of principle. In its draft policy document, the DA, diagnosing SA’s economic problem, on the one hand accepts the apartheid legacy but on the other hand, is in denial on how to respond. Will the electorate be able to figure out what the DA really stands for on the economy?

Siyabulela Tsengiwe is former chief commissioner of the International Trade Administration Commission of South Africa. He writes in his personal capacity