Friday, 23 August 2013

Black Economic Empowerment: What Went Wrong?

I’m all for black economic empowerment. What’s the alternative? A society where most are miserable and have neither prospects nor hope is not a friendly place to live. The haves live in cages. The have-nots rattle the cages, when they are not too hopeless to do anything. So why has BEE not delivered?

A huge part of the problem is the ANC’s top-down approach, strangely similar to Reagan’s trickle-down economics. Like Reaganomics, top-down BEE doesn’t work. In the US, the already rich became richer. Here, equality ended when we equalized the number of billionaires.

In a stark example of what’s wrong with BEE, I recently read an application for a gambling license for a small Eastern Cape town. The application in effect said, “This town lacks the economic base to sustain entertainment businesses, so we are filling the gap by offering the community drinking and gambling.” If you sit back and think about this, the notion is pretty obnoxious. A town that lacks the base of disposable income to support entertainment would, you’d think, not be able to support the proposed business – unless its clientele spend money on drink and gambling that’s not disposable income. In other words, they go home broke and the family doesn’t eat that week.

That though is not my main point about this proposal. One of the “key persons” listed is a car factory production line employee who is interested in getting into the gambling business.

Why would someone with no relevant experience be a “key person”? Because of a BEE requirement for earning a license. So why is this bad?

A black person who already has a job and therefore is a lot better off than the average in a poor province stands to get rich. Many other black people, should the application and similar ones for other poor towns be granted, stand to move from poor to destitute. How is that black economic empowerment?

But it gets worse. Why has the gambling company nominated someone with no relevant experience? Because their new business partner is going to sit in the background spending his new wealth and not interfere with the white baas. How can he interfere when all he knows is car parts?

Zoom out from this one example to the big picture. The faustian deal the ANC made when taking power nearly twenty years ago was that its favoured people would become instantly wealthy, and the needs of the poor would be parked indefinitely. BEE is the “fix” that hides this sorry fact. BEE that takes the form of deliberate promotion of black incompetents to prevent real transfer of control is directly related to lack of delivery. Both in government appointments and in choice of government contractors, this same game is being played. It suits both sides. The ANC can cement its base by patronage, and the old baasskap players can carry on much as before with a little camouflage.

The sad thing is this is not really in anyone’s interest. While it’s true that some people have become obscenely rich in a relatively short time, that wealth cannot really be enjoyed if you have to live in a cage. The white population, the newly empowered black population and those who have managed to rise above poverty without suckling on the BEE teat are living on borrowed time. Sooner or later, the excluded masses will demand their share. In the meantime, our cages are rattled harder and harder.

So what’s to be done?

The ANC is so steeped in the politics of patronage that it’s hard to see it changing, which is sad given the party’s history. Past the 20th anniversary of ANC rule, I expect an increasing fraction of voters who did not grow up with apartheid to be open to other options. The DA doesn’t have a narrative with mass appeal. The smaller parties show no signs of rapid growth. What of the newer players? Malema’s notion of economic freedom ends when he’s liberated wealth in his direction. Agang still needs to hit its stride. I don’t know what it stands for aside from “ANC bad”. A party that promises to do roughly what the ANC stands for but do it right could be in with a chance. On the other hand, Mamphela Ramphele was a senior executive at the World Bank, and I have not heard her repudiating its disastrous structural adjustment jihad. Agang is holding a policy workshop this weekend, so let’s see how that foes. I’d rather judge on results than history, since the ANC has amply demonstrated that history has little influence on how you behave now.

My fear is that all this will lead to another Arab Spring movement – a mass uprising driven by youth with cell phones, with a clear idea of grievance but no clear sense of what to do about it. What South Africa desperately needs now is a clear lead on what to do post-ANC. And that time is fast approaching.

Monday, 19 August 2013

WikiLeaks: Strange Bedfellows

Julian Assange’s Australian WikiLeaks Party has some strange ideas about how to pursue freedom.

In a recent story published in the US, he extolls the US Right interpretation of libertarianism as the “only hope” and representing non-violence. Reading the whole article is interesting, and worth taking the time to do so, especially if you are an Australian voter.

Where does he get that the hardcore antigovernment right is about nonviolence (including as regards abortion)? They are happy to endorse murder when it suits their agenda. To me libertarianism starts with maximising freedom of choice for the individual. The American right version of libertarianism goes off the rails when it aligns itself with extremist religion (which opposes free choice) and big business (which can undermine the individual as much as or even more than government). Ask Russians concerned about oligarchs if excessive concentration of power in big business is a problem.

Meanwhile, in Australia, parties contesting the Senate election need to rank all candidates so any votes that don’t go to elect them are reassigned according to the order the party specifies. The purpose of this exercise to create a group voting ticket is so voters who don’t want to number every candidate can just tick one box, and the order preset by the party they select is used to fill in the ballot. The WikiLeaks Party has preferenced minor parties with views in line with the US right ahead of the Greens, their ally in anti-war and transparency causes. Even more bizarrely, they have put the Nationals ahead of the Greens in Western Australia, reducing the chances of reelection for Greens senator Scott Ludlum, one of the most consistent campaigners for freedom of information. The Nationals are not libertarians by any stretch of the imagination The WikiLeaks Party claims this happened as result of an “administrative error”.

The Australian Electoral Commission’s web site right now is in meltdown so I can’t check the details, but there is enough reporting of this stuff that it seems unlikely to be wrong.

You can read more about similar strange deals here. If parties were doing this the way you’d expect a voter to, they would number candidates in the order of nearest to their position to furthest. Instead, many take the approach of numbering the candidate closest to them last to try to eliminate their most obvious competition. Just to make things more interesting, the big parties tend to use the opposite tactic, favouring each other over smaller parties who offer a real alternative. This way, the two-party duopoly is maintained. This is nothing new. In the past, the Greens were criticized for dodgy deals, and don’t do that anymore. Everyone else still does, apparently. One more reason to support the Greens.

As a consequence of this weirdness, anyone wanting to express support for WikiLeaks has to either accept that they are undermining the chances of the Greens to be elected, or number all the candidates themselves. With about 100 in NSW, that takes some commitment.

In the interests of transparency, the WikiLeaks Party should publish a full and complete record of how they arrived at their preferences for the Senate vote in New South Wales.

What was it that WikiLeaks stands for?


The WikiLeaks Party has imploded spectacularly, with one of Julian Assange’s oldest associates Daniel Mathews quitting, and providing explicit detail of how the preferences fiasco happened. In summary, “administrative error”, my arse. What is particularly disappointing about this is how Assange appears to see his voters as cattle who can be herded to the slaughter, without concern about how and where they are being led. The very notion that you can negotiate a dodgy preferences deal on the basis that no one cares about that sort of detail is contrary to the core principles of a whistleblower organization. The details do matter, and everyone is not only entitled to know, but ought to check.

Here are some articles from WLP (GVT means group voting ticket, a specification of preference flows if a voter votes only for that party’s ticket rather than number all candidates):
Possibly. But we don’t know what their preference negotiators told the Greens during negotiations, and the inconsistency between the two statements does not add to their credibility.

Much of the Assange story revolves around his personality, which is unfortunate. The ideal of real governmental transparency is a great one. If you really care about this, vote for the Greens because they not only are on the right side of this issue, but are a principled party that doesn’t revolve around personalities.