FRANS CRONJE: The cold, cruel reality of the Expropriation Bill
The bill will make certain that foreign investors stay away — and that the ANC, in its current form, will enrich itself at black citizens’ expense
I am, as ever, left in astounded awe at how coldly and cruelly some academics and activists of the political left can craft word after word in such measured and careful tones, which, if enacted as policy, could decimate a country’s economy, bring great suffering to millions of its people, and enable the destruction of its democracy.
Ruth Hall (“Why the expropriation bill is needed — and why it is not enough”, February 11) says the constitution of this country was crafted at the behest of the National Party to preserve the apartheid status quo. Mandela and his compatriots, by her telling, were powerless, outmanoeuvred and outwitted — he a weak and feeble man with no agency to bring his views to bear on the document crafted to usher in SA’s democracy.
That, of course, was not the case. Mandela was both ruthless and brilliant, and outmanoeuvred both the Nats and his own statist peers. The civil liberty and property rights protections set out in that document were carefully crafted and deliberately placed to ensure SA would have every chance of delivering redress for its racist past by growing strongly to become a free and prosperous society.
For a decade, that is what might have been. We have set it all out before — that the pragmatic policies adopted by the Mandela government after 1994 ensured a near-miraculous economic recovery as investment and growth rose strongly, delivering an employment and living standards boon on a scale beyond anything the country had ever experienced.
A boon — lest we forget — that delivered an election result for the ANC that was six percentage points stronger than Mandela had secured in 1994 and, more tellingly, 12 points stronger than that delivered by President Cyril Ramaphosa.
But it was not to last. The fateful events of December 2007 saw Thabo Mbeki deposed via a political stratagem planned by the left of the tripartite alliance, and with his departure the pragmatism and policy approach Mandela had worked so very hard to embed was lost.
Within months, and foretelling what was to come, SA faced the first iteration of the Expropriation Bill Hall writes of. I am indebted and most grateful to her — as a hardened and capable opponent — for her description of the trench warfare that ensued over that piece of legislation, pitting the Institute of Race Relations (IRR), virtually single-handedly, against the Zuma-era state, an ambivalent business community, a detached core of diplomats, a hostile media and a determined activist and academic community, as we sought to block that legislation time and again in the knowledge of what it would mean for our prospects as a country.
That SA faces dangerous inequalities is moot, but to blame that on markets, property rights, capitalism and the constitution is outrageous
In what stands as one of the IRR’s great acts of lobbying for freedom and democracy, we held out for 14 years with so little money, and against such powerful opponents, that were it not for the grit and determination of my colleagues and a small handful of supporters, we might not have lasted weeks.
But Hall lies openly when she says our efforts were in aid of maintaining inequality. She knows, as do the readers, of our efforts to convince government and activists that black South Africans are entitled to the dignity of owning property in their own right, not as vassals of the state; and of the many proposals we made, ranging from cheap financing to empowerment bonds and proper extension services that would allow black commercial farmers to purchase their own businesses and to own them outright.
That SA faces dangerous inequalities is moot, but to blame that on markets, property rights, capitalism and the constitution is outrageous. As in the Western world, where decades of financial socialism practised by central bankers in cahoots with large financial institutions triggered the inequalities that underpinned the social movements that drove the culture wars, cleaving out the deep divisions in America and redrawing the political map of Europe, in SA it was the socialist policies of the government that blocked employment for millions, drove investment levels into the dirt, and debt and deficit levels to record highs, as political confidence in the ANC collapsed and South Africans began to surrender the governance and socio-economic gains made after 1994.
As in the West, deepening inequalities were leveraged here to transition from financial and economic to political socialism — the centrepiece of which is the bill Hall champions — given that property rights underpin substantive human liberty in every free society. For the balance of the government and the ANC, the bill in question is not concerned with land reform, or injustice, or the wrongs of the past. It is a mechanism via which the state will take a very firm step towards seizing assets without paying for them across the economy.
Land may be in the cross hairs via the seizures Hall describes, but so, too, will be pensions and savings of households and shareholdings in companies as a rapacious and corrupt state faces up to the fiscal and economic consequences of its decade of misrule and continuing refusal to reform.
Remember that these great powers, the application of which Hall describes in such vivid detail, will be handed to the current ANC, a party so racked with criminality and thievery that its representatives — those who will pass this bill and decide how it is applied — even stole vast sums from the funds made available to protect SA from the ravages of the Covid-19 pandemic, looting and theft that, if the allegations are to be believed, extended into the highest office of the land.
There must not be any doubt about what government and the ANC will set about to do once the legislation in question is passed. Hall is a presidential adviser in her guise as a member of the land committee that advised the government on expropriation. Earlier this week, one of her compatriots, albeit in the different guise of an economic adviser to the presidency, wrote on this site about the trouble of investor sentiment having turned deeply negative on SA.
Trudi Makhaya bemoaned what she described as the view that SA is seen as slipping into “post-liberation dysfunction” (“Flawed narratives about SA’s economy have real effects”, February 7). I challenge her or any analyst or economist to seriously suggest that after reading Hall’s writing there can be any doubt that this is true — and not because of prejudice or conspiracy theories but for the simple fact that within months the government in SA will have procured for itself the powers to seize the capital that investors commit to this country.
The consequences of that, which the proponents of this expropriation policy will inherit as a moral burden, is that millions of South Africans will be denied, as long as the policy is on the books, the chance of gaining an education, a job, or other opportunity with which they could escape from poverty and join the middle-class.
That remains what SA’s national objective should be. Earlier this week, the finance minister wrote that many white South Africans regard black people as being little better than “hewers of wood and drawers of water”.
For SA to become prosperous and remain free it is necessary to double the number of black people in employment (the white unemployment rate is competitive with the world)
That his government has presided over economic policies and wastage that causes that description to remain a reality for a great many poor people escaped him. But what he was getting at has more truth to it than some of his critics gave him credit for, because there is a view, especially pronounced on the left of white society and in the West, that black people in Africa wish to aspire to little more than eking out a living as “hewers and drawers” on raggedy little patches of scrubland.
Our view is, of course, different. For SA to become prosperous and remain free it is necessary to double the number of black people in employment (the white unemployment rate is competitive with the world). That will require 10-million net new jobs over the next decade. Do you know how many were created since mid-2008 when the Expropriation Bill was first put forward? The answer, drawn from our quarterly labour data, is negative 436,000.
That’s right. Over a period of more than decade — corresponding perfectly with the life of the broader lobby for a policy of expropriation without compensation, the total number of employed people in SA has fallen. To now suggest that the final adoption of that policy, and its aggressive rollout, will reverse that trend and bring justice and redress to the poor, is the stuff of Disneyland. The only way to get to the 10-million is to create great masses of jobs in cities on the back of an investment surge on a far greater scale even than that achieved in the heady era of 2000 to 2007.
The argument is made that, as uncertainty around the policy depressed investment, its firm and clear adoption as law will bring the certainty to see investment levels recover. This, again, is Disney writ large. If investors held back on SA because they were uncertain about whether the government might seize their assets, they sure as hell will not invest on the back of the certainty that the laws to do so are now in place.
And when you think what the passage of this bill means for that objective you realise how far our country has drifted from the start afforded to it by Mandela and the drafters of our constitution — and you can only imagine what they would think now of the crude recklessness with which both the spirit and the content of that document is being undone.
As for land restitution, dispossessed people must be compensated adequately in either land or money, but only a very wealthy society will be able to afford the compensation necessary to make up for the deprivation black people suffered under apartheid.
As for land reform, the financing and support infrastructure should be built so that any black entrant who chooses to pursue a life of commercial agriculture can access the support and financing to purchase and build a business.
That is what the IRR stands for, and that is what it has advocated for, and for this it does indeed stand on the wrong side of history — something that is set to become ever more true as activists across the free world cast aside the trappings and underpinnings of human liberty in their societies.
As for the immediate period ahead, the IRR fights on to stop the legislation, to challenge it if adopted, then to fight its application, every step of the way, until it can be removed from the statutes.
• Cronje is CEO of the Institute of Race Relations.
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