Nationalisation or freedom: What would Julius do?
Julius Malema and his posse are right: the unemployment situation in South Africa, the inequality, the lack of economic freedom, is a ticking time-bomb that cannot be ignored. The poor will eventually stop being okay with rich people riding around in fancy German cars, wearing expensive, imported watches and drinking x-year old whisky that costs their annual family income.
The solution, the ‘cure’ the ANCYL proposes, is nationalisation. How does nationalisation of the mines fix massive unemployment? Nationalisation suggests a change in ownership; it doesn’t change output or productivity. The mines won’t suddenly become more profitable because they are state owned. They won’t be more productive, so they won’t hire more people.
In a recent speech, Malema invoked the example of Botswana. This may explain what he has in mind. In Botswana, the government is a majority stakeholder in mining. This means that the government gets a larger proportion of the profits than would otherwise happen (for example, through taxes) and (some of) this is fed back to the people in public investment and grants. The result? A population dependent on the whims of the government as to how the money is used. Not unlike the population of Bahrain (and several other middle-eastern dictatorships) who are rising up against their dictators because they want freedom, not hand-outs. In many of these places, the standard of living and average income levels far outstrip those in South Africa. It appears that isn’t enough.
Even where a democracy theoretically exists, if most people live on government hand-outs, the power of ruling party over people (because they are dependent on grants) ensures that, most of the time, the people won’t risk voting against them. This means the party stays in power and is able to act with impunity, without the usual checks and balances to curb actions that go against the people’s interests and demands.
This is not to suggest that social grants are wholly bad. Social grants provide a crucial safety net in difficult times. But when they are the only way that the poor can access funds to survive, and in the absence of serious investment to stimulate job creation and facilitate movement out of absolute poverty, hand-outs are a problem.
What is Julius Malema’s vision for South Africa? A country like Botswana where the government has a major stake in mining and enough money to invest in the people, just as long they don’t demand too much freedom? A ‘benevolent dictatorship’ like Bahrain, where natural (oil) wealth is used to buy the silence of the majority?
The ANCYL’s desire to nationalise the mines suggests that, either ANCYL leaders wish to enrich themselves, or they would like to see a ‘benevolent’ dictatorship where the people are reduced to ‘beneficiaries’ of the state – dependent, grateful, abject.
It took significant struggle and the lives of many people to forge this country as a place of freedom. If the ANCYL had to choose between that freedom and their vision of nationalisation, which one would they pick?
Thumbnail image by Bert Kaufmann