Eusebius McKaiser

DA blinded by libertarian convictions

2012-09-05 08:00

Eusebius McKaiser

The Democratic Alliance’s growth plan suffers two fatal weaknesses. First, it pits the poor worker against his unemployed cousin.

Second, it wrongly assumes that inequality can be reduced with the same tools that grow the economy. These weaknesses show up the DA as unambiguously right wing. Nothing wrong with this - all ideologies are welcome in a pluralistic political market.

A big part of the plan for achieving 8% growth levels is the proposed relaxation of labour laws that apparently hamper new economic activity and job creation. There is also reference to a bloated civil service, and a state wage bill that is too massive. The DA thinks civil servants are lazy, overpaid and should be so lucky to still have jobs that do not make the state effective.

Yet the DA’s plan is riddled with problems.

The plan does not spell out the connection between economic growth and job creation. We know from experience during the 2000s - South Africa’s highest and most sustained period of economic growth since the 1960s - that economic growth does not inherently lead to new jobs. The DA assumes this is the case.

Lack of detail

There is also a lack of detail about how the 8% sustainable growth rate will be achieved, which is why so many journalists can be forgiven for simply saying “the DA calls on 8% growth levels”.

The data inputs behind the growth plan are opaque - we are given the storyline that goes with the DA’s input data, but have not been shown the backroom data and calculations, which is where the heart of economic policy debate should be located.  For example, some have counter-claimed that average labour productivity grew by over 3% between 2000 and 2010 with annual real wages only growing by a little over 2% during the same period. The point is obvious: the DA’s data assumptions are contestable.

The DA also wants poorly paid workers to feel guilty for demanding higher wages and salaries. They want mineworkers to feel that their demand for R12 500 monthly salaries will stop an unemployed person from getting an income, even if only R4 000. Both income inequality and unemployment are features of economic injustice. You cannot trade a solution for the one, unemployment, for ignoring or reinforcing the other, inequality. In fact, higher wage levels can better support extended families and help reduce poverty and inequality

The DA’s document, very tellingly, hardly mentions inequality, let alone offering a substantive analysis of how we are to reduce it. The underlying assumption here is that if the economy grows, and people are employed, inequality will naturally disappear.

A bigger pie, however, doesn’t necessarily get sliced more fairly than a smaller pie. Equally, less employment does not mean the gap between the wealthiest and the poorest is sufficiently reduced to achieve social and economic justice. Inequality must be treated as a self-standing justice challenge in South Africa. Dealing with poverty and joblessness will help but will not guarantee substantive equality.

Economically right wing

This oversight in the DA’s growth document shows that it cares less about substantive equality and more about getting people employed to earn a few peanuts, the thinking being that some peanuts are better than coping with an empty tummy. A fuller commitment to economic justice, however, requires the DA to offer a more nuanced analysis of the relationship between growth, poverty, unemployment and inequality. But that assumes, of course, economic justice is the key aim behind this policy document. That is evidently debatable in light of this tissue of policy weaknesses the document is wrapped in.

What does all of this say about the DA’s character? The party is more economically right wing than it is concerned with punting a social justice agenda. The evidence of this is the desire for a smaller state, fewer legislative controls over the labour market, the reduction of state owned enterprises and, most importantly, a primary focus on growth and only a secondary focus on unemployment and poverty relief. As for inequality, it is off the DA’s radar, as is typical of parties that are confident that market based policies will naturally reduce social injustices.

This policy document might endear the party to the middle classes, black and white, but the poor worker, and his unemployed cousin, will not be fooled. This is a missed opportunity for the DA given that the African National Congress has also been letting down the economically marginalised. There is a niche in the political market here still waiting to be filled. At the risk of repeating a decade-long cliché of South African politics, that niche is not on the right, but to the left of the ANC -bolder, more progressive ideas for South Africa’s development remain unexplored.

Sadly, the DA remains hamstrung by its flirtation with unreliable libertarian solutions for deeply structured social and economic injustices.

- Eusebius McKaiser is an associate at the Wits Centre for Ethics. Follow @eusebius on Twitter.

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