BusinessDay today has published, under the above title, an interesting opinion of Michael Kransdorff, who studies at the Harvard Kennedy School in Cambridge Massachusetts, & Marian Tupy, a policy analyst at the Cato Institute’s Centre for Global Liberty & Prosperity.

To start with they say in the interesting and thought provoking article “whether under apartheid or democracy, SA’s politicians have always liked to admonish the country’s businessmen.   Apartheid politicians believed corporate profit-making undermined white baasskap, while SA’s current rulers believe that corporate profit-making is antithetical to black empowerment.  Minister in the Presidency Trevor Manuel should thus be commended for breaking with tradition and calling on the business community to counter the influence of labour unions. For almost a century, South African governments have championed the interests of labour unions through discriminatory and distorting regulations that harmed businesses and SA as a whole”.

They go on to point out that the “common yet deeply mistaken narrative of South African history holds that apartheid was a natural outgrowth of capitalism.   The country’s businesses have been painted as villainous beneficiaries of racial laws that exploited black South Africans.   But an honest look at the evolution of racial discrimination shows that the intended beneficiary of apartheid laws was white labour”.

They provide a brief account of the labour history in South Africa from after the First World War, including the Rand Revolt in 1922.  After Smuts introduced the Industrial Conciliation Act in 1924 he was defeated at the polls by a Pact Government consisting of Hertzog and the socialist labour unions and racial discrimination became the order of the day.
In their opinion the “African National Congress (ANC) should be championing freer labour markets.  Unfortunately, the ruling party has chosen to emulate Afrikaner nationalists.   Like the Nats, the ANC is catering to an important voting bloc of unionised workers.  The general welfare of SA appears to be far from the ANC’s agenda”.

They make it clear that “overbearing labour legislation advances the interests of unionised workers at the expense of the unemployed.   The more difficult the unions make it to replace workers and to compensate them at a market rate, the more difficult it is for the unemployed to enter the job market. Thus, in spite of 15 years of economic growth, unemployment still hovers at an unacceptably high level of 24%”.

They state that “unfortunately, all indications are that under the Jacob Zuma administration, the unions will have even more say in government policy.  At least seven Cabinet members are former union leaders, while Congress of South African Trade Unions secretary-general Zwelinzima Vavi has even declared that ‘we are the policy makers and the government implements. The government doesn’t lead any more'”.

In conclusion they are of the opinion that “Businesses in SA should take up Manuel’s challenge.   For too long they have been intimidated by a false narrative that holds that the successes of SA’s companies in the past depended on apartheid legislation.  The time has come for the business sector to stand up to organised labour. SA’s future economic growth and prosperity depend on it”.