“The time is ripe for a reassessment of Anglo-Saxon capitalism. This does not mean abandoning the core precepts of markets and the capitalist system, but rather a return to the earlier phase of values-driven, what one might call Puritan, capitalism with its future orientation, its emphasis on savings, investment, long-term horizons and benefits of economic endeavour accruing not just to the individual but to the community as a whole.
One part of such Puritan values was a moderate lifestyle and executive remuneration that was truly performance-based, that had long-term horizons and was sensitive to the ratio of highest to lowest earners. This ratio seems to have cut adrift from the levels that existed for many decades in the US and UK and cannot be explained in terms of supply and demand of scarce skills”.
Michael Spicer, CEO of Business Leadership SA, makes some telling points in an article appearing in Business Day today
see Nationalisation: Once business has its house in order, it can speak out.
These extracts are with the kind permission of Business Day and the full article can be viewed or downloaded by clicking on the links.
Some further extracts and direct quotes from the article in Business Day
All these analyses point to the need to raise growth rates to 6% a year or higher and to raise employment substantially. The question is, how? One approach is for the business sector to continue to argue stridently for the need for the government and labour to change their ways. The failure of policy and governance in government, and the self- defeating consequences of the wage and strike strategy of the unions, would not need much debate if this were merely a matter of rational discourse delinked from political power and interest considerations. But the problem is that this is not a clean slate. The burden of the past looms large. Business’s house is not in order. In addition, the global financial crisis has undermined trust in business both internationally and in SA.
There are two sides to the employment coin. In order to make the essential argument about changing the incentives in the labour market that inhibit the expansion of employment, not to mention the counterproductive behaviour of trade unions, it is equally necessary for business to examine its attitude to employees. While generalisation is invidious, there are too many South African businesses whose words and actions are at odds. The practice of too many is still to treat employees as units of cost, to be ruthlessly excised at the drop of a hat.
While many companies have made a genuine effort at an inclusive transformation that tries to offer opportunities for employees across the racial spectrum, it is also clear that there are too many that have approached this critical issue with a compliance mentality, ticking the boxes in a way that accords with the letter of regulations but not the spirit.
So business has to review its own values and actions. Business must do the right thing and do it on its own impetus. Change on these terms will not be a sign of weakness but a sign of strength and confidence, and will help underpin the essential arguments for a business-friendly, market-oriented democracy.
Let me add a word about the idea of an economic Codesa. This seems to be the product of rather superficial thinking. The circumstances are now different from 1990-94, when the contesting political forces were unified in their objectives and had strong leaders with good strategic understanding. In the current, highly factionalised environment, the circumstances and framework required for a constructive outcome are absent.
In conclusion, my approach is to keep the faith in our constitution and the sound institutions of our democracy and to defend them where necessary. One of the paradoxes of the nationalisation debate is the sense of personal liberation I feel to speak out on what needs to be done. I believe there is more than enough talent and goodwill for S A to get through these difficult days. Business is already playing a solid role in sustaining the national life and could do more if it makes some of the changes I have mentioned.
This article by a Wits Professor, David Coldwell, appeared for the first time in Business Day today in response to the recent article by Michael Spicer and is repeated here with the kind permission of Business Day because it is a very valuable contribution to the on-going debate.
DAVID COLDWELL: Now SA needs a different kind of revolution [http://www.businessday.co.za/articles/Content.aspx?id=151468]
MICHAEL Spicer’s nationalisation commentary — “Once business has its house in order, it can speak out” (August 18) — makes a refreshingly sagacious contribution to the overheating nationalisation debate.
The problem with most politico- economic structures such as socialism, communism and capitalism does not reside in their originated versions but in their derived adulterated practices.
For example, communism, certainly in its original idealised Marxist form, has all but vanished from the global political scene. This has not been caused so much by the central power of its idealised form, which has appealed to many thinking people over history, but by its practice. Thus the communist revolution that changed Russia was ultimately destroyed by Stalin through the evil that his personal ambitions wrought on the Soviet people through his own and the central communist bureaucracy’s practical distortions of Marxism’s original intent.
Spicer writes about how the original spirit of capitalism embodied Puritan values such as “What is worth doing, is worth doing well”, which put the emphasis on the individual’s responsibility to himself and the community and advocated a moderate lifestyle of service and excellence. Such values have been so eroded that, until recently, we were being seduced by a capitalism that advocated the idea that “greed is good”. Unremarkably, there was no shortage of avid disciples. The financial crash changed all this and now we are confronted by the need to revitalis e capitalism to something approaching its original form, where individualism and self-interest are tempered by the values of concern for others and the community, personal contribution, moderation and hard work.
Paradoxically, the ills of capitalism run parallel with those of communism. What caused communism’s demise was that the central values of service, moderation and responsibility embodied in the communist ideal of contribution to society gave way to greed, excess and personal aggrandis ement derived largely from its political agenda of centralis ed control and oligarchy. What perhaps makes capitalism less perishable is its focus on the freedom for individual aspiration as against collectivist control, but this will not ensure its survival if it maintains its current course and values of selfish enrichment.
The central problem with the nationalisation debate is that we have two highly entrenched camps with vested interests that talk past the majority of the population, who are hoping for a solution to their poverty and misery. Worse, the two sides are barely able to sit in the same room, let alone build a common understanding. But, it is not because neither side’s views have some rational merit, but because their agendas are so transparent and unacceptable. Personal interest and advantage ride roughshod over considerations for the common good.
The capitalist side argues for economic growth to provide employment and thus solve the grind of poverty. Yet this has never done much for the masses in the past. The distribution of wealth as measured by the Gini co-efficient remains as calcified in SA as before the coming of the democratic state. Thus, such arguments are betrayed by their obvious concern for the maintenance of privilege and the protection of existing wealth.
The socialist lobby maintains that by giving the people ownership of resources, nationalisation offers the masses a way out of their misery. Of course they forget that nationalism has never done much good in wealth redistribution. From this side, too, it becomes clear nationalisation is also being used for personal political aggrandis ement and enrichment.
On both sides, the erosion of values away from social contribution to selfish accomplishment may have, frighteningly, produced a new generation of “selfists”. The Financial Times recently reported that a survey by Sky Television indicated that children’s career aspirations had shifted from the professions to celebrity: “They hoped to be pop stars or footballers not teachers or doctors. They wanted — like the sixth Duke of Muck — respect: to be valued for what they were, not for what they had contributed.”
What SA and the global community needs is a revolution of basic individual values and aspirations. A beginning may be found in an emphasis on personal contribution to society rather than selfish accomplishments, along with a society that recognises, nurtures and rewards such contributions over any other.