While black economic empowerment seeks to influence change within a capitalist order associated with inequality and exploitation, it is nevertheless contributing to the realisation of the economic vision of the Freedom Charter, writes Jerry Vilakazi.
"The national wealth of our country, the heritage of South Africans, shall be restored to the people;
The mineral wealth beneath the soil, the banks and monopoly industry shall be transferred to the ownership of the people as a whole; All other industry and trade shall be controlled to assist the well being of the people;
All people shall have equal rights to trade where they choose, to manufacture and to enter all trades, crafts and professions."
Freedom Charter, 1955
Inspired and guided by the vision of economic emancipation of the Freedom Charter, the democratic government has inaugurated a host of policy and legislative measures, including broad-based black economic empowerment (BEE), to reduce the levels of economic deprivation and inherited disparities of wealth and income.
However, BEE has recently been subjected to numerous criticisms that have prompted some critics to question the effectiveness of BEE as a vehicle for effecting the deracialisation of economic ownership envisioned in the Freedom Charter. The criticism comes from both within our own movement and from forces that are opposed to our national democratic revolution. This latter criticism is characterised by the tendency to praise and celebrate white success while demonising the success of black entrepreneurs.
This article examines the interplay between BEE and the vision of economic emancipation articulated in the Freedom Charter. In particular, the article sheds light on some fundamental questions informing the ongoing dialogue and debate on whether or not BEE contributes to the kind of society envisaged in the Freedom Charter.
The ANC and its alliance partners have always held that for our political democracy and non-racialism to succeed, there must be economic empowerment and transformation that benefits the black majority. Against this background, debates on BEE have always been welcome and encouraged. Within the alliance partners the debate on BEE has assessed, and at times, challenged the effectiveness of BEE primarily on the basis of its impact on the poor and the working class.
There is broad consensus between the ANC and its alliance partners on the substance of BEE. There is also consensus that BEE must ultimately ensure that the black majority own the country's wealth in accordance with the Freedom Charter. However, what is at stake in the debate are the results that the BEE policy have yielded, which have tended to create economic prosperity for a few, instead of the black majority. While this may be a valid observation, the challenge is not how do we stop the success and prosperity of the few entrepreneurs, but how do we accelerate the process of creating a critical mass of empowered blacks.
The alternative society envisioned by the Freedom Charter is a democratic, non-racial, non-sexist and prosperous South Africa. To facilitate this, the Freedom Charter comprises, among others, social, economic, political and legal goals. While the economic goals of the Charter must be seen in the context of the overall objective of the document, it is somewhat unrealistic to expect BEE, which primarily seeks to promote non-racial and non-sexist economic prosperity, to address the multiplicity of goals articulated in the Charter. Those who argue for the dilution of company ownership in the name of broad-based empowerment when they actually refer to broad-based ownership are doing a disservice to our cause. That is why in some sectors we are now seeing a tendency to form broad-based employee share schemes that even ignore employee investment companies to perpetuate white control at operational and board levels.
Our point of departure is that BEE is not a panacea to all the socials ills confronting our society. Rather, BEE is one of many policy instruments designed to restore, through its multifaceted approach to empowerment, the economic heritage of black people.
While the design of the current BEE policy does not resonate with the revolutionary underpinnings of economic change envisaged in the Freedom Charter (ie. nationalisation), its desired outcomes accord with the economic goals the Freedom Charter had intended to accomplish from the outset.
It is too simplistic to argue that BEE does not contribute to the kind of society envisaged by the Freedom Charter simply because of its strategic deviation from the revolutionary underpinnings of economic change originally envisaged in the Charter.
Black economic empowerment is contributing to the realisation of the economic vision of the Charter, though its implementation has been fraught with contradictions. We must accept the consequences of the policy choices we have made to reconstruct and develop our post-apartheid economy, and devise innovative means to deal with the unintended consequences generated by our policy choices.
Black economic empowerment constitutes an integral part of South Africa's economic growth and development strategy, which is capitalist in character.
While capitalist development has often lead to higher levels of economic growth, it has also been associated with inequalities, poverty and marginalisation of the majority.
Our discourse on the economic emancipation of the oppressed needs to take these realities into consideration and to explore effective means through which the benefits of BEE could be shared, within the constraints imposed by our economic order, among a broad base of enterprises and individuals.
This requires us, first and foremost, to understand the historical origins of economic dispossession and disempowerment of the indigenous people. This is so because the third clause of the Freedom Charter, and the BEE policy which gives effect to its contents, represents a specific response to a specific set of conditions engendered by the economic dispossession and disempowerment of the indigenous people.
HISTORICAL BASIS OF ECONOMIC DISEMPOWERMENT
Entrepreneurship and trade, the foundation of modern business, have always formed an integral part of black people's ways of life. Even before whites settled in South Africa, black people were engaged in a variety of successful entrepreneurial activities to accumulate wealth, which included, among other things, the cultivation of various crops, the rearing of cattle, sheep and other stock, the manufacture of some iron tools and pottery, and the tanning of animal hides for clothing.
However, the brutal dispossession and expropriation of black people's sources of productive wealth unleashed by colonialism ushered in the implementation of numerous repressive laws that militated against the development of viable and sustainable entrepreneurial activities among black people. These laws also relegated blacks to peripheral economic activities, what today constitute the bulk of 'second economy'.
These repressive laws were a direct response to the enthusiasm with which black entrepreneurs embraced the development of the market economy in South Africa, which was fuelled by the discovery of minerals. The development of the market economy created an insatiable demand for agricultural and other products in towns. This demand for agricultural products gave impetus to the rise of a very successful class of black peasants who supplied towns with agricultural products, wool and other commodities.
However, the success with which black peasants captured the agricultural product market posed a formidable competition to the nascent white farmers.
Moreover, the economic independence enjoyed by blacks due to their access to land and other forms of productive wealth made it difficult, if not impossible, for employers to induce blacks to consider taking up wage employment in mines, farms and other emerging sectors of the economy.
Therefore to help white farmers and miners to overcome the threat posed by black people's economic independence, the colonial governments made decisive legislative interventions to deal with black people's access to land and other sources of productive wealth.
These culminated in the passage of legislative measures that limited the amount of land that a black household could own, and the imposition of various taxes that could only be paid in cash. One major effect of these repressive interventions was to push blacks en masse to towns where they, besides being turned into a source of cheap labour, were subjected to various forms of racism within and beyond the workplace.
At the same time, the rapid urbanisation of blacks precipitated by the industrialisation of the economy provided new business opportunities for black entrepreneurs in towns. However, like the black working class, black entrepreneurs encountered numerous forms of racism that tended to both undermine and restrict their entrepreneurial activities in towns.
With the coming into power of the National Party with its apartheid programme, racial repressive laws against blacks were intensified. This not >only resulted in, among others, denying black workers the right to form or join trade unions but in stripping blacks of, and denying them an opportunity to accumulate, assets. It denied them access to skills, prevented them from playing any meaningful role in major companies and severely reduced the possibility of blacks starting their own enterprises.
The protracted struggles waged by the black people against these forms of economic injustice and all the other forms of deprivation endured by blacks provided a fertile ground for unity among the oppressed, which ultimately forced the apartheid government to enter into negotiations with the ANC.
These negotiations led to the ANC coming into power in 1994.
TRAJECTORY OF BEE
The ANC-led government inherited a society characterised by vast racial and gender inequalities in the distribution of and access to wealth, income, skills and employment. The economic conditions whose eradication the Freedom Charter had called for in 1955 had not simply disappeared.
Black economic empowerment became one of the main vehicles for transferring economic ownership to blacks. Empowerment is necessary because there was disempowerment in the past. This was a racially based process. Hence BEE takes on a racial character.
In essence, BEE is government's response to dispossession of black people over an extended period of time by successive white governments. The basis of white domination in South Africa was, among other things, the denial of capital accumulation by black people.
However, the early model of BEE that emerged in the 1990s was of limited economic benefit to the black majority due to its over-emphasis on equity ownership. As a result, the government has introduced legislation and regulations to accelerate and broaden the economic benefits accruing from BEE processes and transactions. The way the new legislation and regulations on empowerment are structured is intended to counter measures that underpinned colonial and apartheid processes of economic dispossession.
Concerns with the early model of BEE that emerged in the 1990s lead some critics, from both sides of the ideological divide, to a spurious conclusion that BEE had lost its strategic direction, as it had allegedly become an instrument for enriching "a small black elite with political connections with the ANC". This criticism has ushered in the 'enrichment vs empowerment' debate.
However, this debate about 'enrichment vs empowerment' is misleading. The debate fails to appreciate that empowerment is a multi-dimensional process that includes, among other things, promoting asset ownership among blacks, increasing the skills of blacks by a variety of means, and increasing control by blacks over significant assets.
The central question was recently raised by President Thabo Mbeki at the 4th Annual Nelson Mandela Lecture, which is whether there can be co-existence of the values of the capitalist market - almost always driven by individual profit maximisation and greed - and the values of human solidarity that bind us as a coherent society.
Colonialism, apartheid and other forms of racially based programmes, though specifically formulated to ensure racially exclusive privilege, were never able to create mass wealth among beneficiaries. These programmes succeeded in creating a relatively privileged group among whites. Only a few among them were able to accumulate wealth to the extent of being financially independent.
It is for this reason that BEE will not be able to achieve mass black wealth. In all likelihood, if successful it will create a handful -relative to the vast majority who are unlikely to gain huge benefits - of financially independent individuals. Our economy does need those individuals. We should collectively reject the attempts to demonise black success, especially when it is our struggle heroes who are the perpetual targets of vicious attacks from those who want us to believe that it is okay to have white billionaires but not morally right to have black billionaires.
The key fact is that white capital was built through the exploitation of our people and what we should avoid is the rise of black capital at the expense of the black majority through the greed and corruption against which Mbeki has consistently warned. Legitimate wealth creation, even within our own ranks, should be encouraged and supported, as it will strengthen our access to key resources needed to rebuild our country. We also need to recognise and support the key role that our new business elite and captains of industry, who emerged from the historical battles of our national democratic revolution, can play side by side with the poor and the working class of our country. The struggle for the realisation of the Freedom Charter has always been inclusive and cannot be fought within the terrain of exclusivity within our own social ranks. As much as we have rejected sexism, racism and ethnicity, we should reject the notion of separation by class if it seeks to divide us in the unified struggle for economic justice and transformation The economic vision set out in the Charter is yet to be fully realised. Our society is still characterised by poverty, economic marginalisation and vast racial and gender inequalities in the distribution of and access to wealth, income, skills and employment.
However, this does not mean that BEE does not contribute to the kind of society envisaged by the Freedom Charter. Black economic empowerment is contributing to the realisation of the economic vision of the Charter, though its implementation has been fraught with contradictions.
Black economic empowerment is not a panacea to all the social ills confronting our society. Centuries of exploitation cannot be reversed by just twelve years of empowerment initiatives. We must accept the consequences of the policy choices we have made to reconstruct and develop our post-apartheid economy, and devise innovative means to deal with the unintended consequences generated by our policy choices.
Black economic empowerment is capitalist in character and seeks to influence change within a capitalist order. We therefore have to be cognisant and supportive of the multitude of interventions by government to counter the negative effects of a capitalist economy which, while leading to higher levels of wealth, has also been associated with inequality, poverty and marginalisation of the majority.
* Jerry Vilakazi is the Chief Executive Officer of Business Unity SA and former Secretary of the ANC Rivonia Branch.
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