The surprising thing about BEE in South Africa is not that it has been done well or badly, but (like Dr Johnson’s dog walking on its hind legs) that it has been achieved at all — given that the apartheid economy and society were so severely distorted in favour of whites.
For half a century, from the 1920s to the 1970s, the white government drove a huge and successful project of affirmative action for whites. The cost was heavy, and was paid by generations of black South Africans — indeed, it is still being paid.
Successive governments from 1910 were elected by white voters who demanded protection from having to travel third-class on trains with black people, live alongside them, attend school with them, receive treatment at hospitals with them, or attend theatres and sports fixtures with them. But above all, white voters wanted job protection.
A core theme running through 20th-century South Africa’s economic history is the shielding of white skilled and semi-skilled workers. This was one of the issues successfully exploited by Gen JBM Hertzog with his “civilised labour” policy, which helped his party to victory in the 1924 general election (whites-only, of course).
It became an instrument of policy and law to explicitly reserve skilled occupations for whites. The effect on black education and skills training, and consequently on the economy as a whole, was catastrophic.
On instruction from successive white governments, the South African Railways was turned into an employment agency for whites. Until the 1960s, the railways employed white manual labourers, and only when these were unavailable were black labourers taken on.
On instruction from successive white governments, the South African Railways was turned into an employment agency for whites
There were early warnings of the negative economic impact of job reservation, both on the railways and in the country.
Herbert Frankel, a brilliant Wits University economist, warned in the 1920s that “the most important economic burden is the cost involved in the employment of uneconomical white labour. The interests of the Railways in this matter lie in the direction of reducing, in the most economic manner, the staff required to carry on the operations of the system, whereas those of the State are that as large a number of men as possible (and mainly those unemployable elsewhere) shall be employed by the Administration.”
At the Black Business Council summit last week, in the context of a broad-based BEE (BBBEE) discussion, business leader Bonang Mohale indirectly referred to that programme of white affirmative action started a century ago: “The Afrikaners did not have a state of the nation address with 31 priorities. They had one problem to solve. It was called the Poor White Problem.”
The Sunday Times said in its report on the event that “at such gatherings, access to capital was the single issue most frustrating for speakers and delegates”.
Yet is a shortage of capital really the problem, or a juicy red herring? Under apartheid, whites did not have preferential access to capital. What they had was privileged access to excellent education and training, at schools and universities and in artisan apprenticeships. Upliftment of economic and social conditions followed.
Of course, the degree of black ownership of businesses is important to BBBEE — but is a percentage of ownership the indispensable and defining criterion of transformation? If not, perhaps a more creative BBBEE discussion can be opened, which could help defuse the time-bombs of zero growth and high unemployment.
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