ANC Doubles Down on Socialism

Earlier this week I made the point that socialism is a resilient delusion. I exemplified with the arrogance and determination of the newly re-elected Ecuadorean president Rafael Correa. He is not the only socialist-in-chief in Latin America: the notorious Hugo Chavez is still clinging to power in Venezuela, Evo Morales is doing his best to be Chavez’ copycat in Bolivia and Cristina Kirchner is hard at work advancing her own version of the Chavez model in Argentina.

But the political virus we know as socialism is not just spreading in Latin America. Its symptoms of grandeur, political hubris, economic delusion and legislative arrogance are showing up in many places around the world, one of which is South Africa. The ANC, which has governed the country since Apartheid ended 19 years ago, has already built a tragic record of delusional economic policies. Among the many tragic results are a 30-percent unemployment rate and a burdensome, unpredictable tax system, not to mention rampant corruption and a terribly over-regulated labor market.

So far the ANC has not shown much interest in any of the country’s problems. They have allowed crime to run amok, especially in the form of a genocide on white farmers, they have turned a blind eye to government corruption and they have not cared one bit about how poverty has become a plague among the nation’s black majority.

Like all socialists, the ANC leaders were intoxicated with power. But one event seems to have forced them to sober up, namely the Marikana massacre when police killed three dozen striking miners and injured twice as many. Suddenly, the black population in South Africa saw “their” government behave like the Apartheid regime had treated them in Sharpville and Soweto. Long-growing frustration over how the economy has slowly deteriorated under the ANC, paired with quiet whispers among many blacks that it was actually easier to feed your family under Apartheid, now formed a plume of erupting anger, so high that it was visible all the way up to the Ivory Tower dwellers that currently run South Africa.

Panic has now taken hold in the ANC leadership quarters. Realizing that they are actually politically mortal, they suddenly care a great deal about the social destruction they have inflicted on their own people. Worried that the rest of the world is going to take notice of their widespread political, social and economic failure as leaders, they call in Cyril Ramaphosa, a man whose reputation in Europe and America is not far from that of Nelson Mandela.

Ramaphosa is charged with repairing the ANC’s reputation, but the product he is trying to sell – the National Development Plan – reveals that nothing, absolutely nothing, has changed in the ANC mode of thinking. The document, which looks good on the website of the National Planning Commission, is a classic socialist mumbo-jumbo product. Back in my naive young days when I was a teenage socialist activist traveling Europe socializing with everything from British Militant activists to Italian communists, I saw tons of the same rich-on-words, void-of-reason kind of products.

The so called National Development Plan, available at the ANC website, is yet more evidence that the ANC is determined to drive South Africa into the ditch, and then have the elephant of big government stomp her to into a pile of trash. Here is, e.g., what they have to say about the young, whose future they have already destroyed:

South Africa has an urbanising, youthful population. This presents an opportunity to boost economic growth, increase employment and reduce poverty. The Commission, recognising that young people bear the brunt of unemployment, adopted a “youth lens” in preparing its proposals, which include:

Before we get to what they suggest in order to help the young, let me point out how the ANC, just like every other socialist movement in the world, compartmentalizes its constituents into distinct mono-characteristic categories. The young are young, and shall be treated as such – and accept to be treated as such. Never mind that the only thing they have in common is their age.

Then we get to the list of policy goals to “help” the young – a list that we might as well read while listening to an appropriate piece of music:

A nutrition intervention for pregnant women and young children. Universal access to two years of early childhood development. Improve the school system, including increasing the number of students achieving above 50 percent in literacy and mathematics, increasing learner retention rates to 90 percent and bolstering teacher training.

Does it get more statist than this? More government-provided entitlements means more government bureaucrats and higher taxes. Where in this chain does a young South African with ambitions to start his or her career get more opportunities to be self sufficient?

Strengthen youth service programmes and introduce new, community-based programmes to offer young people life-skills training, entrepreneurship training and opportunities to participate in community development programmes. Strengthen and expand the number of FET colleges to increase the participation rate to 25 percent. Increase the graduation rate of FET colleges to 75 percent. Provide full funding assistance covering tuition, books, accommodation and living allowance to students from poor families.

Ah. More tax-paid educational programs that won’t lead to any new jobs, because in order to pay for them the government has to put yet more hate taxes on the “rich”. This crushes small businesses, which are almost without exception the best job creators in any economy. And since nothing is being done about the corruption in the country, except talking about it, larger corporations are unlikely to want to expand their operations in South Africa. As a result, the young who are lured into these new ANC-proposed programs – if they ever become reality – will get an education they can’t use. Their frustration with their government may be postponed, but it will be exacerbated by the years that the young feel they wasted on a useless education.

But wait – there’s more:

A tax incentive to employers to reduce the initial cost of hiring young labour-market entrants. A subsidy to the placement sector to identify, prepare and place matric graduates into work. The subsidy will be paid upon successful placement. Expand learnerships and make training vouchers directly available to job seekers.

There are many South Africans already out there looking for the jobs that don’t exist. Perhaps the best irony in this is that the ANC might end up creating a valuable export product: skilled labor.

In the section that looks at the economy, things get even better. Here are some of the ANC’s new ideas for what they want to accomplish by 2030 – a convenient 17 years into the future:

Eliminate income poverty – Reduce the proportion of households with a monthly income below R419 per person (in 2009 prices) from 39 percent to zero. Reduce inequality – The Gini coefficient should fall from 0.69 to 0.6. Enabling milestones Increase employment from 13 million in 2010 to 24 million in 2030. Raise per capita income from R50 000 in 2010 to R120 000 by 2030. Increase the share of national income of the bottom 40 percent from 6 percent to 10 percent.

To begin with, it is easy to promise higher wages over a period of 17 years. Basically, all you have to do is let inflation walk through the economy. At three percent per year, inflation-adjusted income advancement will turn R419 into R692 without the government having to do a single thing about it.

The per-capita income of R50,000 will become R120,000 in 17 years at a slightly higher inflation rate of 5.3 percent. Currently, inflation in South Africa is higher than that. Again, the ANC will achieve two of its key economic policy goals by kicking back and letting employers adjust the earnings of their employees to inflation.

The talk about reducing income differences is worrisome, and I urge all you South Africans who read this blog (a steady readership down there!) to pay close attention to this part of the National Development Plan. Income differences are typically larger in thriving economies. The reason is simple: when people are allowed to earn whatever they can, they build a career, work hard and make a lot of money. Then they spend their money in the local economy, thus creating more jobs. Many hard working professionals also start their own businesses, creating even more jobs.

The more jobs that high-earning people create or help create, the better the chances are for unskilled workers or newly graduated professionals to find a well-paying job. The closer an economy gets to full employment, the more incomes will grow across the spectrum.

Since the ANC has now – again – declared that income differences are income inequalities, and that they are going to fight such inequalities, we can safely conclude that the ANC will continue down the path with new and higher hate taxes on the “rich”. This means steeper marginal income taxes, chopping the top off high earnings and thus reducing or even eliminating the positive multiplier effects of high earnings. Fewer jobs are created at the bottom of the labor market, leaving more people on the government dole.

And just to drive home the point that government, not individual citizens and certainly not the free market, is the final arbiter of all economic activity, the African Nonsensical Congress makes clear in its National Delusion Plan that ideology trumps reality every day of the week:

Ensure that skilled, technical, professional and managerial posts better reflect the country’s racial, gender and disability makeup. Broaden ownership of assets to historically disadvantaged groups.

In other words, keep the resentment from the Apartheid years alive by blaming today’s whites for historic atrocities. And since the ANC knows that this will anger many non-black entrepreneurs and make them less appreciative of the government’s social-engineering policies, they have to drive home the point that every employer must make sure that his staff reflects “the country’s racial, gender and disability makeup”.

Other than that, it is rather interesting to see that after almost two decades in power, the ANC feels inclined to say that “give us another two decades and we will…”

Increase the quality of education so that all children have at least two years of preschool education and all children in grade 3 can read and write. Provide affordable access to quality health care while promoting health and wellbeing. Establish effective, safe and affordable public transport. Produce sufficient energy to support industry at competitive prices, ensuring access for poor households, while reducing carbon emissions per unit of power by about one-third. Ensure that all South Africans have access to clean running water in their homes.

In 2030 very few South Africans will have any first-hand memories of what life was like under Apartheid. That is probably fortunate for the ANC, if it can cling to power for that long, because the worst that can happen to them is that more and more blacks begin to compare everyday living conditions under the ANC with those they or their parents experienced under Apartheid.

The racism of that government can never be excused or mitigated by attenuating circumstances, but if indeed the black population in South Africa is worse off today than it was back then, it is a monumental failure for the ANC – and for socialism. There is a lot to point in that direction, especially when it comes to unemployment.

For a socialist government to perform worse than a racist, socially and economically stratifying government is an embarrassment of galactic proportions. It is a verdict on socialism so heavy that it can hopefully be eliminated from South Africa’s political institutions for a long time to come.

The National Development Plan shows clearly that with the ANC in power, things are only going to deteriorate. But hopefully it will also be the motivator for the political opposition to begin formulating a common-sense alternative.

South Africa deserves better than socialism.