Dishonesty

The current Government in South Africa is riddled with corruption.  Why is that so?

There are many reasons offered by persons with differing points of view.  Some say that it is a product of the deprivation suffered by the majority at the hands of the Apartheid regime.  Others say that it is because the ANC Party has such an overpowering hold on Government that its members believe that they ‘own’ the country and have a right to exploit it.  Numerous other reasons are advanced.  One reason that has apparently not been advanced lies in the nature of democracy itself.

Democracy is a system of government under which the majority applies the wealth of the country to the advancement of the interests of the majority.  In the hands of a Government elected by an unsophisticated electorate, this translates into a licence to ‘redistribute’ the income, and in many cases the assets, of the few who earn the income of the country, to the many who either receive wages and salaries from them or who receive benefits from the Government.  It is implicit in this system that the ruling Party is able to ‘buy’ the votes of the beneficiaries of such largesse by making payments or distributing benefits to those who are potential voters for that Party.  The fact that a large proportion of the income generators of the society vote for Parties other than the ruling Party is a clear indicator that they do not wish the funds taken from them by means of taxation to be distributed in this way.  The fact that a large proportion of the recipients of these handouts vote for the ruling Party is an indication that they wish the largesse to continue.

The effect of this is that the system of democracy, as it is practiced in South Africa, leads to a culture in which the majority of people come to believe that they are entitled to benefits for which they have never worked.  People who migrate from the countryside to the cities believe that they are entitled to the provision of housing by the Local Government, people who move into unoccupied properties are entitled to the provision of alternative housing before the rightful owners of the properties are able to evict them.  Workers are entitled to hold work positions or to be compensated for losing them, regardless of the quality of work they render to the employers, or the economic conditions confronting the employers, which may cause substantial loss to the employers.  People who apply for jobs may not be subjected to checks of their criminal records unless the prospective employer can show that a previous criminal conviction is directly relevant to the job in question.  People who are under-qualified or under-experienced believe that they are entitled to employment simply because they have the indispensible asset of a black skin.  All of this leads to an attitude that the entitlement is not necessarily related to work or performance. 

It is only a very short jump to the belief that the asset of another is also the subject of entitlement.

None of this is made any better by the actions of senior members of Government in supporting members of their inner circle who have been convicted by the Courts.  Far from being a cause for disgrace and humiliation, it appears that a charge of dishonesty or, even better, a criminal conviction for fraud or corruption, is a passport to a good position in the ruling Party or in Government.  The mere fact that the State President gained power at a time when he was the subject of several criminal investigations for fraud and corruption is very revealing of the attitude towards dishonesty in the ANC.

It is a sad fact that nearly 50% of the population of the country has below-average intelligence.  By the very nature of the world and how it works, it is inevitable that the bulk of the poor populace will fall within this group – it is almost inevitable that people of lower intelligence will be poorer than those of higher intelligence.  The fact that the voter base of the ANC lies in the poor part of the population has several consequences that should not be ignored.

The ANC is driven, in its need to gain votes, to offer increasing benefits to the ‘poorest of the poor, that nonsensical catchword that seems to have become a justification for almost any policy aimed at redistributing income from those who earn it to those who do not.  This implies that the proportion of the GDP that is dedicated to supporting the indigent and the low-producers will increase steadily.  Do not forget that a benefit, once given, becomes a right, and not something to be grateful for.  Ever-increasing and ever-newer benefits must be given in order to keep the ‘generosity of the ANC’ fresh in the minds of the non-thinking public.

The diversion of income from those who earn it to those who consume it is, to a very large extent, a sterilisation of those funds.  South Africa is in desperate need of investment if it is to avoid the credit trap that much of the Western world has fallen into.  Investment requires that funds are available in excess of the living needs of the population.  Every million that flows to the poor is a million less that could be invested in capital equipment that could be used to create the jobs needed to lift the poor out of their poverty while, at the same time, disincentivising the poor from doing the things that are necessary to escape from poverty.  The effect?  Perpetualisation of poverty!

Of course, that would be bad enough in itself, but the real problem lies in the fact that a diversion of R1 000 000 to the poor probably cost R10 000 000 before that R1 000 000 hits the intended target.

A side-effect of the redistribution of income is that many projects that are started with a prime objective being the generation of jobs is promoted by the newly-wealthy, or the aspirants to join that class, as a way of participating in the flow of redistributed wealth.  The construction of roads had, as far as can be seen from the outside, little economic benefit in most cases other than providing jobs to the large number of unemployed.  It has now been revealed that the actual cost of building these monuments to poverty was between 100% and 240% greater than would be expected in terms of international experience!  Even if building a road is inefficient if done to the greatest extent possible by the employment of manual labour, one would not reasonably expect a doubling of the cost, or even more!  Where did the rest go?  Following the dictum of “Follow the Money”, it is more than likely that a considerable portion of the extra cost went into the pockets of those directly associated with negotiating the contracts.  One cannot forget that the building industry has recently been found to have been colluding with the intention of increasing prices.  Of course, this conduct is much easier if a part of that increased price flows to the counter-party in the negotiation, the party awarding the contract.  This has not yet been alleged and presently constitutes pure speculation, but, on the basis of the munitions contracts, the SANDF Air Force contracts and numerous other such Government dealings, it would hardly be a surprise to any thinking person to find the old names attached to the sticky fingers.

Where does all of this get us in an investigation as to why dishonesty has become so much a part of the South African way of life?  It seems likely that any person desiring to become successful, which is, in South Africa, defined as becoming wealthy, is likely to follow the examples set by those who have visibly made it.  An investigation into the sudden wealth amassed by so many of the leaders of the nation, both politicians and ‘entrepreneurs’, is likely to reveal a substantial role of dishonesty or, at least, undue advantage achieved by using the inequities of the system.  The aspirant wealthy person will almost certainly emulate the examples in trying to join the club.  Once the threshold of dishonest conduct is crossed, even by the simple paying of a bribe to secure a right or approval, the floodgates open.  The amounts involved grow rapidly.  After all, if dishonesty nets R5 000, why balk at dishonesty to net R500 000, or R50 000 000?  Paraphrasing Winston Churchill, the question then becomes “Once we have established that you are dishonest, the only matter to be decided is the price!”

What is your price?