ANC Policy of Grinding Poverty to Retain Voters

In keeping with “liberation movements,” particularly of the 20^th century and of contemporary times, the ANC has as its point of departure that any progress, prosperity and growth can be attributed to the oppression of people. For this reason, all policies and decisions are aimed at presenting the group or class where progress and prosperity occur as oppressors, using various state means to target them. In this way, the oppressed groups will be uplifted so that they could have a fair share of economic and political power.

To achieve this the ANC establishes a permanent relation between victim and offender, oppressor and oppressed.

It is strange that the various mechanisms for growth, inter alia skills, public infrastructure for electricity supply, transportation and water supply, municipal services, healthcare and a healthy policy environment for economic growth are the very ones that are targeted.

It would indeed be logical to think that the ingredients for the existence of a modern society are required to raise everyone’s standard of living. After all, raising people’s standard of living is the purpose of the economy.

However, this resolute commitment to cast out the “offenders” and the “oppressors” extends much deeper to include almost every aspect of society.

A variety of examples can be cited in this regard.

In a Constitutional Court Judgment of 2016 in the matter between AfriForum and the Tshwane Metro, Judge Chris Jafta articulated that profound commitment, also extending it to culture. In a minority judgment he stated the following:

“How can that unquestionably transformative Constitution be expected to recognise cultural traditions rooted in the racist past? The answer must be, if there is such expectation, that it is misplaced”.

This is also consistent with the ANC’s government dispensation since 1994 namely, that everything that predates 1994 is evil.

In a discussion on this topic with a person from within ANC circles, I made the particular point that history cannot be dismissed as solely evil and proffered as example that the establishment of a modern state in Africa holds a major advantage for the country, even today. His reply was that one cannot refer to the past in any positive sense as it was based on injustice.

That unwavering view held by this particular person within the ANC circles is telling of the ANC’s view as a whole.

The ANC’s famous Strategy and Tactics document, which serves as the basis of ANC policies and decisions – and, by extension, of the state which all are subjected to – states the following:

“Colonialism of a Special Type contained within itself contradictions that could not be resolved through reform. It had to be destroyed. As such, the system we seek to create will stand or fall on the basis of whether it is able to eliminate the main antagonists of colonialism.”

And

“The approach of the ANC to the economy is informed by the understanding that economic activity is not for its own sake …The core of economic policy should be the fundamental question of political economy: that is, the distribution of income and assets. It is in this context that the inescapable reality of white and patriarchal dominance in the economy has to be addressed.”

In a way, it also summarises the essence of the ANC’s failure.

Thomas Sowell

Thomas Sowell is one of the most influential economic thinkers of our time. Sowell, a black American born in Harlem (New York) during the Great Depression, is a distinguished economist and political philosopher affiliated with the Hoover Institution at Stanford University.

During his early formative years, the economic ideas that advocated redistribution of wealth and income initially resonated with Sowell – a model similar to what the ANC is currently promoting. However, a shift occurred in his thinking during the 1960s when he conducted research for the US Department of Labour.

Through his study of labour policies, and specifically the consequences of minimum wage legislation, Sowell reached the conclusion that economic systems based on the redistribution of income and assets are unworkable.

While he set out his study with a measure of support for a redistribution policy, his thorough analysis of empirical data convinced him that good intentions per se are not enough – and that such intentions could have negative consequences.

He developed certain timeless sayings that became characteristic of his approach to the economy, while at the same time emphasising the unworkability of centrally planned economic models.

He writes:

“What the redistributionists are trying to do is to redistribute poverty.”

And

“The welfare state is not really about the welfare of the masses. It is about the egos of the elites”

And

“It doesn’t matter what you intend. What matters is what you produce. Results matter — not intentions”.

After three decades of ANC rule in South Africa the country is particularly suited as a case study of the application of Thomas Sowell’s thinking that spans a period of more than 50 years. This makes it possible to present certain lessons coming from his book Wealth, Poverty and Politics (2016) that Sowell would likely direct at the ANC.

1. Wealth is created, not redistributed

Poverty is in fact the natural state of humanity and to counteract it, wealth must be created.

The ANC will often refer to wealth in mythical terms, assuming that wealth emerges from somewhere mysterious, and that it is their job to simply redistribute it.

Sowell quotes the economist Henry Hazlitt who said the following:

“The real problem of poverty is not a problem of ‘distribution’ but of production. The poor are poor not because something is being withheld from them, but because, for whatever reason, they are not producing enough”.

Wealth must be created and is never guaranteed or permanent.

Japan serves as an example. Despite its lack of natural resources, it has become a modern economic giant through a focus on education, discipline, and technological development.

What is unfortunately clear among many African countries is that underdevelopment and poverty are the norm despite abundant mineral wealth. This is due to poor governments, corruption and the absence of institutions that promote human capital and economic growth.

Human capital forms a core part of Sowell’s analysis of the state of a country. According to Sowell, human capital refers to the “skills, discipline and attitudes towards work” of people who determine a society’s productivity.

Wealth is created by human capital that directs people’s productivity towards economic growth, or in other words towards a higher standard of living.

2. Political success does not presuppose economic progress

Political victory does not automatically lead to economic prosperity. While the ANC has achieved political successes, sustainable economic development is based on the promotion of skills, human capital and functional institutions.

History shows that political power without economic expertise can be disastrous. Mao Zedong’s programme, The Great Leap Forward, (1958 – 1962) caused a famine in which millions of Chinese died, despite strong political control. This tragedy illustrates that the centralisation of power without productive ability brings economic decline, not progress.

The ANC’s policy, influenced by Marxist and Leninist ideas, focuses largely on redress of the past through redistribution, rather than on creating growth for the future.

Without a future-oriented approach the danger remains that political victories will turn into economic stagnation and social decline.

3. Culture matters!

Sowell emphasises the importance of culture when quoting historian David S Landes who posits:

“If we learn anything from the history of economic development, it is that culture makes almost all the difference….”

However, culture is a concept that people realise in one way or the other without fully realising its far-reaching extent. Culture is so much more than music or cultural expressions embodied in dance or recipes – although these also constitute a particularly important feature of culture.

Samuel Huntington described culture in a more comprehensive way by stating that culture encompasses the attitudes, values, beliefs and basic assumptions that are common among people in a society.

In short, culture is, simply put, the manner in which we do things. Culture is a set of values that are embodied in our habits, our customs and the way in which we conduct our daily lives.

Without a culture that values achievement, self-responsibility, education and hard work, political victories will be empty, and economic promises will remain unfulfilled. The real difference between prosperity and stagnation does not only lie in a redistribution policy that rigidly orders and determines society from a central point, but in the cultural values that communities carry and promote.

4. The welfare state leaves everyone worse off 

Over the past decades South Africa has degenerated into a politicised and crippling welfare state.

As a result of the ANC’s political promises and opportunist election politics, almost half of the population is dependent on social grants, and approximately 20% of the national budget is spent on these grants. This ongoing increase in welfare expenditure serves the ANC’s political survival rather than being a reflection of South Africa’s economic ability to sustain such obligations.

Thomas Sowell warns that one of the most detrimental consequences of a welfare state is that it not only causes economic damage but also changes people’s behaviour and attitudes. When people become dependent on state grants for extended periods, their incentive to be productive and to pursue independence weakens. Gradually, grants become an inalienable right in the eyes of the beneficiaries, and the necessity of earning an income through work and entrepreneurship is being dismantled systematically.

Sowell’s studies on the welfare state in countries such as the United States and England show that large populations relying on the productivity of a shrinking tax base have serious long term economic and social consequences. In South Africa where this dependence is even greater, this aspect becomes even more dangerous. A welfare state not only perpetuates poverty; it reinforces inequality by discouraging economic self-improvement.

While there is great reason to sympathise with the most vulnerable in the country who live in dire circumstances, the deepening of the welfare state is a ticking time bomb. South Africa’s rising fiscal pressure and unsustainable budget expenditure already show clear warning signs – as are seen in the controversy surrounding the VAT issue, which the ANC wanted to implement in an attempt to increase revenue.

Without far-reaching reform and a shift away from a culture of dependency that has set in, the country will struggle increasingly to maintain social stability and economic growth.

5. What should the ANC do?

Although Thomas Sowell could explain it much more succinctly himself, certain core principles as to what he would advise the ANC to do, can be drawn from his work.

In the first place Sowell emphasises that any strategy should start with an honest assessment of reality – the truth about the real state of affairs. Without a sober and honest assessment of the state of affairs (without using ideological and political fantasies as point of departure) – policy formulation will inevitably be distorted.

Secondly, Sowell warns against the tendency to attribute blame to external factors. Where government failure is constantly blamed on colonialism, apartheid, globalisation or “unfair structures,” the ANC denies their own role in the weak economy and perpetuates a cycle of misdiagnosis and wrong policy.

Thirdly, Sowell advocates setting achievable and realistic goals rather than falling into exaggerated dreams of “mega cities,” “interprovincial express trains,” and other utopian visions, the capacity for which is lacking.

In the fourth place Sowell emphasises that it is not sufficient to formulate goals; deliberate attempts must be made to unlock the capabilities to reach these goals. In South Africa this means the implementation of comprehensive structural reforms across a wide spectrum of policies: deregulating the economy by removing redundant legislation; the restructuring of the public service to restore a culture of merit and performance; reforming labour legislation to promote job creation; protecting and strengthening property rights; upgrading education standards to develop real skills; creating an entrepreneur-friendly environment; opening up the agricultural and industrial sectors; maintaining fiscal discipline; and restoring law and order to ensure a safe climate for investment. Without these far-reaching reforms any goals remain wishful thinking with no real chance of success. It is clear that a series of reforms is called for in South Africa’s case.

Fifthly, Sowell would probably have insisted that the country’s culture of responsibility, productivity and self-reliance be re-established.

Thomas Sowell points out that sustainable economic development is not achieved through political victories or redistribution, but through honesty, self-responsibility, productivity and a culture that rewards achievement.

Werner Human is the Solidarity Movement’s head of operations