Zwelenzima Vavi,
in his diatribe entitled Zuma’s Denialism and Betrayal here, demonstrates that he
fails to understand that the principles of the ANC’s policies have caused the
problems, and that those problems have been exacerbated by the corruption and
incompetence of the deployed cadres. He
fails to understand that the millions of employed (other than in Government)
owe their jobs and their income to the ‘capitalists’, that hated group that
provides the funds, the expertise and the willingness to take risks, all
necessary for the creation of the jobs that the Unions then feel free to
plunder, and the Government tries to ‘tax out of existence’, to pay the balance
of the employed. Rather than being
directed by the 26% of employed people who hand their fate to the Union
leaders, the policies should be directed towards supporting the businesses and
industries, and the businessmen and industrialists who invest their funds,
their expertise and their time to creating the jobs. In that way, the 1% of people who create
wealth would be enabled to generate the jobs that the 99% rely on to live. It would have ensured that more Black people
rise to the rank of ‘capitalist’, and so brought an end to the ‘domination’ of
White capital. The maths are simple –
grow your way out of the situation, using the 88% of Black people, working
together with the Whites, who are more than willing to support a growing Black
middle class, all of whom spend their (non-Black, non-White) money to buy the
products and services produced to earn their way into the ‘capitalist economy’. Certainly there will be abusive practices, by
the Black as well as the White capitalists, but they are easy to control, if
the Government is free to act in the interests of all.
There are
many reasons why Black youths are less skilled than their parents. One is that the Government has convinced them
that the purpose of education is to obtain the certificate, Matric or degree,
regardless of the quality of the education required, rather than to actually
learn something. Another reason is that the
BEE laws give Blacks the right to take positions, so disincentivising them from
undergoing the process of learning to do the job, and this is exacerbated by
the acceptance of the employers of the need to pay a salary or profit share to
a person who is not fully capable of holding that position, through lack of
knowledge or on-the-job experience. That
acceptance has resulted in a higher cost base for those employers, generating inflation
and lack of international competitiveness, as well as giving foreign investors
a reason to invest their capital and efforts in a more supportive economy. It is also a reason for the ‘snail’s pace’ in
affirming the position of Black people in top management. A company will want to appoint only the best
candidate in top management, because of the high cost of those positions and
the risk of a disastrous decision by a less than fully competent manager. Reaching top management has always been a
product of a good education, a supportive (and appropriate) cultural background
and vast experience, both in the job and in the world. Most Blacks do not (yet) qualify o those
basics, and their chances of qualifying are reduced by a demand that they enjoy
a rapid progression to the higher ranks.
Experience requires both time and exposure to business. It is no accident that the top managers of
large companies are almost exclusively at least middle aged, if not older. Of course, the pressures exerted against
Whites under the empowerment laws has ensured that the best have left the
country to seek their future in a place where their skills alone are
relevant. To induce them to stay
requires a much higher salary than would be the case where the market is better
satisfied in those skills.
Vavi
complains that outsourcing, labour broking, casualization and sub-contracting
are growing exponentially, while regular employment numbers are declining. Of course that will happen under the present
labour regime, which is strongly skewed in favour of labour, strongly promoted
by the Unions, which represent only 26% of the working population, and under
10% of the population that could be working.
It is wonderful to have a job that pays a ‘decent’ salary, but even more
wonderful to have a job that pays a salary.
As the labour market becomes more competitive, because there are fewer
people seeking work, the laws of economics will push the price of labour up,
until the cost of labour is so high that it becomes economic to mechanise and
so reduce the labour requirement. So
simple that even a Union leader can understand it. If the cost of labour is artificially increased
by Union demands, usually accompanied by strikes that cause huge loss of
production and are usually accompanied by terrorisation of non-Union workers
and destruction of employer property, the same process will occur, as it has so
clearly on the mines, which today employ fewer than half of the people they
used to require, and in industry, where numerous companies have been forced out
of business or, if they are so fortunate, to cut back drastically to comply
with the falling demand for their products, now much more expensive.
Vavi contends
that the Government has ‘bought into the neoliberal approach that says that, in
times of crisis, the burden must be shifted to the poor. The rich must be allowed to accumulate
wealth, and the poor must wait until the economy can afford to give them a few
crumbs off the table.’ This statement
misses entirely the truth of the matter.
The Government has brought about the crisis, by applying economic
policies that have no foundation in the facts of the world. They have neglected the education of the
people, failing to provide them with the mental equipment, as well as all the
other requirements necessary to be able to sell their skills in this modern
world. The Government has worked on the
basis that all people are equal, ignoring the fact that people with equal
qualities are equal, and the qualities must be such as to elevate them above
the herd. That has been shown
indisputably in all SOEs, where the people who have been placed in top positions
have earned those positions by the colour of their skins and of their Party
cards. A corporation like ESKOM has been
brought to its knees by people who do not have the education, skills and
experience needed to run such a complex organisation, but who have been willing
to oversee, or overlook, the massive corruption that has earned them their
jobs. Vavi wants to redistribute wealth,
to make the taxation system more progressive, to decisively stop wastage and corruption,
to prevent capital flows out of the country, to address
super-exploitation. Redistribution of
wealth is a wonderful idea, provided it is redistributed on the basis of
earning power. Wealth disparities are
least amongst the successful economies like Germany and Japan, countries in
which the education is excellent and on-the-job learning programmes are
well-developed. Redistribution by any
other means, particularly taxation of the successful has never worked in the
long term. Stopping wastage and
corruption will happen when the people who run the State enterprises are
competent managers, with rigorous oversight by responsible and competent Boards
of Directors. Capital will cease to flow
out of the country when the laws are fair and just, and equally applied. Capital seeks the location where it is best
rewarded, and where it is not punished.
The anti-capital spoutings of our President at the Freedom Day rally
were a wonderful incentive to capital to flee to somewhere which values its
contribution. The same thinking applies
to tax havens. Most taxpayers are
willing to bear a fair share of the reasonable cost of running the country,
but, when they are forced to pay for Nkandla, ESKOM, SAA and all the other
lunacies currently existing, they tend to seek out the best way to reduce the
tax burden short of actually removing it entirely by leaving the country. A fair tax regime will encourage investors,
and taxpayers, to remain in, or come to, the country, and this will generate an
ever-increasing revenue for the country to spend on what is necessary, rather
than to be used to buy votes. Tax havens
are not used to evade a responsibility to the workers, as Vavi implies. They are used to preserve some of the income
flow that is used to reinvest in the businesses and industries. The higher the penalties of productivity are,
the greater will be the incentive to escape them. The converse also works. If South Africa were to passed a law freeing
income of any tax burden if it is invested in productive assets, the flow of
funds into the country, and the reversal of the flow of funds seeking a fair
deal in terms of tax outside the country will become a flood, and the number of
jobs on offer will soar. Compare that
with what is happening now, when Gordhan asks for applause when he informs
Parliament that he plans to take R1,3 trillion from the very small taxpayer
base.
Vavi also
complains that the President has not had meetings with labour
organisations. What would be the purpose
of such meetings, other than to inform them that the Government has suddenly
seen the light, and is now moving to cut back on the privileges they enjoy? That is not likely to happen until Zuma is in
jail. He needs the support of the
Unions, or thinks he does, not trusting the good sense of the voters and their
ability to recognise the very obvious failings of the Marxist-Stalinist
policies he advocates. Zuma and Vavi
should realise that neither Governments nor labour Unions are capable of
legislating or striking businesses or industries into existence. That is the field of capitalist investors,
whether one-man shows or multinationals, people who have the qualities to
create the entities that employ workers.
People who should be treasured and nurtured, and treated as the valuable
resource they are.