Democracy: Advancing or retreating?

Lawrence Schlemmer sees business being used as a vehicle for empowerment while government lags in transformation.
The government is coming under increasing criticism for allowing inequality and poverty to increase since 1994. Surveys show that about 60 per cent of black South Africans are dissatisfied with the government, which is widely perceived to be doing more to promote a new black elite than to improve the lot of the poor. This raises the question: what kind of democracy is the ANC shaping for the future? Are we to have a representative democracy, based on majority rule; a liberal democracy, in which popular sovereignty is counterbalanced by entrenched individual rights; or a form of democratic elitism, in which elite groups manipulate political institutions for their own ends? The ANC government projects itself as a representative democracy and some of its critics accept this, arguing that problems concern capacity and efficiency rather than ideology. Others, however, believe that the government has sold out the people, aligned itself with powerful elites and swung towards a ‘neo-liberal’ agenda. The first criticism is closer to the truth. The ANC is not unaware of the poor: it has put a forest of legislation in place to provide services, training and capacity building; it has instituted child grants and tolerated massive non-payment of local rates and service charges. The problem is indeed lack of delivery capacity. However, that problem is largely one of its own making: the ANC government has single-mindedly pursued racial transformation of the civil service despite warnings that its delivery capacity would be crippled by the loss of experience. In the private sector as well, its black economic empowerment policies have contradicted its commitment to lower the operating costs of business. In fact, the government has solved its delivery problems by commandeering private businesses to take over the task (and most of the costs) of delivering its empowerment and equity targets. The government’s priorities are thus clear: it does worry about the poor, but only after it has achieved high-level racial transformation. That is why many critics see government as primarily committed to elite building. The new elites promoted by empowerment are tied to government patronage, and in this sense there are some worrying similarities to the old regime. Will the new elite become an oligarchy like the old apartheid-era Broederbond? Is a new hegemony unfolding?

The African National Congress (ANC) stands accused by its own creation, the Human Rights Commission (HRC), of reneging on its mandate to the people. In its report on Economic and Social Rights, of 22 April 2003, the Commission argues that the state has not met its full obligations to the masses. This indictment comes in the wake of mounting criticism of the government from both writers and civil society for allowing inequality and poverty to deepen since 1994.

For a government claiming to have liberated the masses from the shackles of apartheid, this indictment must hurt badly, particularly because it comes from within the government stable. It helps little that it was forewarned about the trap of well-nigh un-measurable and unenforceable socio-economic rights in the South African Bill of Rights.

It is a moot point as to whether any government within our present economy could satisfy the criteria for socio-economic rights, but the pressure on government is not likely to abate. Numerous surveys of attitudes show that around 60 per cent of black South Africans, and almost as many ANC supporters, are dissatisfied with the performance of government. It has now become popular wisdom that more is being done to promote a new black economic elite than to advance the interests of the poor and the unemployed. The labelling of government policies as "neo liberal" has swelled to a veritable chorus on the left. The controversy raises the vital question of what kind of democracy the ANC is shaping for the future. Before one can answer this question one has to consider the options.

Variants of democracy
Notwithstanding the common criteria of a universal franchise and regular elections, democracies differ fundamentally. In "representative" democracies, the keynote features are mass needs, popular sovereignty and the imperative of the "majority" - the people rule. In "liberal" democracies, on the other hand, the sovereignty of the people is curbed or counter-balanced by the inalienable rights of individuals, singly or in groups with similar interests. Then one has less effective "democracies" in which leaders with a particular mission will override both majorities and individual rights in the interests of some presumed greater good, like nationalism, religious values or grandiose agendas for development - often called "guided" democracies.

But the variations do not end there. Early sociologists noted that ordinary voters tend to be sidelined by elite groups with superior cultural and material capital, which manipulate political institutions for their own ends. Later authors, however, noted that in some democracies one particular elite would form an anti-democratic oligarchy, while in others competition between opposing elites could reflect and protect the interests of ordinary voters - "democratic elitism".

Very recently, Fareed Zacharia, in a book called The Future of Freedom, has argued that governments claiming to represent the interests of majorities have regulated institutions and prescribed behaviour to such an extent that individual liberty has been sacrificed on the altar of the common good - a trend that can lead to bureaucratic oligarchy beyond the reach of all but the most powerful lobbies and special interests.


Where does the ANC government fit in?


Frustrated servant of the people?
With its slogans like "a better life for all" and its emphasis on "representivity", the ANC projects itself as standing for a progressive representative democracy in which the people are sovereign. Some of its critics will accept this. Their argument would be that the problems concern capacity, efficiency and political will, not ideology.

A far-reaching critique comes from more radical observers. Unfazed by both the eight decades of failure by socialist governments to achieve social justice and by the manifest un-sustainability of the modern welfare state, their argument is that the government has sold out the people, aligning itself with socially and economically powerful interests in society and swinging towards what is contemptuously referred to as the "neo-liberal" agenda.

The narrower critique is healthy - part of the democratic process. The second critique, however, is highly contrived, not only because of the un-sustainability of mass welfare in a developing economy but because it assumes that poorly-informed and poorly organised masses of people can actually exercise power and hold their representatives to account. Participatory democracy has seldom succeeded in a complex modern state. As long as these critics cling to unrealistic aims, they will miss the lessons of history and opportunities to make democracy more accountable. Worse still, they will court authoritarian or paternalistic rule - as long ago as 1693, William Penn observed: "Let the people think they govern and they will be governed".

In any event, the first criticism is much closer to observable facts. It is an oversimplification to say that the government is impervious to the linked problems of poverty and unemployment. There is a forest of legislation in place providing for service delivery to the poor, training, and capacity building. While the government has resisted a basic income grant, it has gone out on a limb with child grants, taking a huge risk by standards of best practice in rewarding the poor for having children. By tolerating massive non-payment of local service charges and rates, it is in fact making large transfer payments to the poor in addition to its direct grants.

The problem is that it has a huge lack of programme management capacity in the state administration. It has even greater delivery capacity problems at the local level, the level it has chosen for its development thrust, namely local government. Here again, however, it has taken successive steps to boost local delivery capacity, financial controls and infrastructure, and it is clearly deeply worried by the failures of delivery.

Does the government therefore deserve sympathy in its struggle to deliver? Not really, because in other aspects of its policies it has knowingly weakened its capacities. After the lapsing of short-term guarantees for old guard officials, it has been unyielding in its racial transformation of the civil service despite warnings that its delivery capacity would be crippled by a rapid loss of experience. In this sense other priorities have taken precedence over effective administration.


Commandeering business and weakening macro-economic policy
The same can be said for the private sector. Government has adopted very sound macro-economic policies as a basis for sustained investment and growth - its longer-range answer to our crippling rates of unemployment. It has met many important targets, such as inflation, but failed to meet growth, investment and employment targets. Allowing for the state of the international economy, should we sympathise with the government on this score? Here again, not really.

Under pressure from influential black business and professional organisations it has adopted very muscular black economic empowerment policies that have contradicted commitments in its macro-economic strategy to lowering the operating costs of business.

In fact, it has discovered the perfect solution to its problems of lack of implementation capacity. It has commandeered private businesses as the vehicle to deliver its empowerment and equity targets. First with soft but unyielding political pressure on white business - mainly based on subtle or not so subtle warnings of legislation and punitive measures for non-compliance, and now with comprehensive Black Economic Empowerment (BEE) charters, it is pushing white business to take over the task of high-level private racial redistribution.

Government makes modest direct contributions by way of special empowerment funds and the state Industrial Development Corporation plays a role, but all the hidden costs are borne by the private sector. There are often costs of securing loans for identified black equity partners, costs of carrying people in senior positions while they learn the ropes, costs of recruitment in a thinly skilled labour market and costs in outsourcing where empowerment criteria can rule out the lowest tenders. Government will contest this but to deny that there are large efficiency penalties in employment equity is to deny the effects of apartheid.

There are also costs in terms of losses of potential fixed foreign investment - many investors baulk at the prospect of unpredictable costs of meeting racial criteria. These costs are impossible to quantify but they are hugely significant where the most urgent developmental priority is job-creation.


The unemployment malaise
Why has government been so limp in tackling the scourge of unemployment? By comparison with the empowerment thrust, strategies to encourage an increase in labour absorption through trainee wage subsidies and other incentives have been flimsy. It is true that subsidies and employment incentives frequently have undesirable effects but the same can be said for forcing the pace of black economic empowerment. Why has government not been more effective in confronting unions and its own department of labour to lower costs of labour? Why are rural subsistence farmers, who occupy some 25 per cent of non-desert land, not being turned into productive farmers?

The government has very clearly defined its priorities. It does worry about the poor and the unemployed but only after it has secured the basis for success in high-level racial engineering. No one can doubt the need for some form of reasonable affirmative action, but the unremitting pressure for unrealistically rapid outcomes gives the game away. As the Financial Mail (2 May 2003) illustrates, the minister of labour writes off a 33 per cent increase over three years in black high-level employment as "bleak" and unsatisfactory when he knows that industry is scraping the barrel for skills. This is why so many critics see government as primarily committed to elite building.


What kind of elites?
While one accepts that most democracies are manipulated by elites, what kind of elite system will we have? A condition for the democratic elitism referred to earlier is that there will be competing elites and that they are substantially independent of government. The new elites promoted by empowerment policies are tied hand and foot to government patronage. Will older elites be able to compete with the new elites in shaping policy or will the new elites consolidate to become an oligarchy like the old apartheid Broederbond (Band of Brothers)?

Older elite opinion is still prominent in civil society but the crucial platforms of influence tend to be set aside for the new elites. How easily can a member of the "old guard" become the head of a state corporation, of an English language university, of a state commission or council, of a high profile cultural body and even of a private newspaper? Are the centres of information and policy influence being politically and racially segregated? How many members of the Human Rights Commission with its critical role in the democracy are really independent of the ANC or government? Is a new hegemony unfolding?

Echoes of the past
The pre-1994 governments in South Africa were, for whites, normal electoral democracies. They were fulsome in their rhetoric about representing and serving the people and their welfare. Three factors robbed those governments of democratic quality, even for whites. First there was a mobilised ethnic (language group) imbalance, closely correlated with party support that alienated English-speakers from 1948 to the mid eighties. Second, politically "incorrect" elites were relatively powerless, sidelined by an ethnic oligarchy, except in the private sector where they were powerful. Third, heads of state like HF Verwoerd and PW Botha were so all powerful that they could impose personal priorities on the nation.

Our new democracy has universal franchise, and much more professional policy machinery, but at the same time there are some worrying similarities to the old regime. It markets itself as a representative democracy and it also has a concern with the poor, but more powerful priorities are steering it towards an elite-driven racial oligarchy very similar to the ethnic version that preceded it. Its head of state is no less supreme than his predecessors. One large difference is that the formerly influential white business sector will become captive of government.

Our complex Bill of Rights notwithstanding, are we not compromising the individual freedom and civic liberty to make our democracy and economy a winning combination?