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The myth of the competent apartheid government

Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets.

Competence in the apartheid government? Yeah right. This is a myth that has to die, if only because it will inevitably—fairly or otherwise—be read as racist. Although the differences between today’s government and that of pre-democratic South Africa are profound, especially from a moral point of view, there are many policy similarities.

The comments on the Daily Maverick are seldom as shrill and offensive as the anonymous screeds on some other South African news sites. However, a few classics of racist myth-making do slip through.

One I noticed recently was made in response to an article about the corruption and inefficiency of the ANC-led government of South Africa. It said that the apartheid government, for all its faults, was much more competent.

While the ANC doesn’t get nearly enough credit for its successes, and its great merit is racial justice and democratic fairness, it is hard to dispute that on balance, it fails at many basic duties of an effective government. Criticising it for these failures does not amount to racism. However, to go further, and claim that the apartheid government ran the country more competently, does go beyond the pale.

It is a scurrilous lie; a myth that begs to be busted, because it strengthens the race card that so often poisons our public debate. Merely dismissing those who perpetuate this myth as racist isn’t good enough, even if that is true for some—or even most—of them. The danger is that a few may be honestly convinced that the myth is true. There is an underlying misconception at work that deserves to be separated from the ad hominem charge of racism.

The truth is that the apartheid government was just as crony-capitalist and corrupt as the government of today. The economic policies of the ANC and the apartheid state’s National Party government are almost identical, and have a lot in common with national socialism.

National socialism, wrote Emile Lederer in 1937 in the Annals of the American Academy of Political and Social Science, “is an economic system based on a totalitarian concept of the state to which everything—economics included—must conform, under coercion if necessary.”

The approach to economic recovery and development favoured by the Fascists was likewise one of state corporatism.

In his great treatise Human Action, which appeared in German in 1940 but in English only in 1949, the economist Ludwig von Mises warned: “All varieties of interference with the market phenomena not only fail to achieve the ends aimed at by their authors and supporters, but bring about a state of affairs which—from the point of view of their authors’ and advocates’ valuations—is less desirable than the previous state of affairs which they were designed to alter. If one wants to correct their manifest unsuitableness and preposterousness by supplementing the first acts of intervention with more and more of such acts, one must go farther and farther until the market economy has been entirely destroyed and socialism has been substituted for it.”

If these policies sound familiar, it is because the dynamic epitomises the economic policies of both the NP and the ANC.

Here’s the difference: the apartheid government only had to keep a constituency of a few million happy. For a while, it was possible to support 5-million whites in state-corporatist luxury on the backs of 50-million people. Half of the white population had protected jobs in the public sector, complete with dinky little government-subsidised houses. Many of the rest would get rich working for the Broederbond-controlled big business cartel. In the face of the glaring racial injustice, what was less frequently noted was that the prosperity-generating private sector was in fact tiny.

By comparison, the ANC also supports a crony-capitalist elite, and also promotes public-sector employment and labour-intensive public works to keep the masses supplied with bread and circuses. The ANC’s problem with exactly the same economic policy is that it has to keep all 50-million South Africans happy, with exactly the same resources at their disposal, and similar constraints on the vigour of the private sector, both formal and informal.

The NP’s economic policy was corrupt, inefficient, and rapidly failing even with the advantage it had in the unjust years of what they euphemistically called “separate development”. Why would the very same policies suddenly produce a cornucopia large enough to support all South Africans?

The ANC of today is no more corrupt than the old NP. It is not less competent, no matter how different it might appear to whites who only noticed their own preferential treatment under apartheid, but now live as equals with their fellow South Africans. It is not more inefficient, either. The only difference is that the ANC’s problem is 10 times larger: it promised to provide a better life for all, not just some.

The claim that the apartheid economy failed is not some sort of historical revisionism. The question was addressed in 1991 by Terence Moll, of the African Studies Centre of the University of Cambridge, in a paper published in the Journal of Southern African Studies. “It is often claimed,” he wrote, “by analysts right across the political spectrum that the apartheid economy grew ‘exceptionally rapidly’ until the early 1970s. Rarely, however, is evidence provided to back up this claim…. [The] apartheid economy did not surge forward after 1948, as did other developing economies, its comparative output and productivity growth record is poor according to a range of measures, and its share of world and developing country manufactured exports fell steadily from 1955 to 1985, suggesting that the apartheid economy grew curiously slowly and can be said to have ‘failed’—partly because the apartheid superstructure impeded economic development, and partly because of the constraining effects of a range of short-sighted and ill-directed state economic policies.”

In a third-year history lecture, Wallace Mills, a professor at St Mary’s University in Canada, wrote: “Although the National Party government claimed to be committed to capitalism, apartheid involved massive interference in the market; there was little ‘free market’ under apartheid.”

Mills went on to detail the failure of job reservation for whites, in that it caused high wage inflation and skills shortages that weren’t being filled fast enough by the oppressed non-white population. He explained that marketing boards and other protectionist measures that favoured the white farming sector contributed noticeably to rising prices and inflation. By the early 1970s, South Africa was mired in a combination of stagnation and inflation, predating the oil shocks that caused the problem in the rest of the world, and enduring long after the rest of the world got inflation under control and rediscovered economic growth.

In the Concise Encyclopedia of Economics, Thomas Hazlett, professor of law and economics at George Mason University’s School of Law, viewed apartheid as socialism even more clearly: “The now-defunct apartheid system of South Africa presented a fascinating instance of interest-group competition for political advantage. In light of the extreme human rights abuses stemming from apartheid, it is remarkable that so little attention has been paid to the economic foundations of that torturous social structure. The conventional view is that apartheid was devised by affluent whites to suppress poor blacks. In fact, the system sprang from class warfare and was largely the creation of white workers struggling against both the black majority and white capitalists. Apartheid was born in the political victory of radical white trade unions over both of their rivals. In short, this cruelly oppressive economic system was socialism with a racist face.”

When evaluating the economic policy performance of the ANC government today, it is worth comparing it with the apartheid government, but not because the latter was any better. It is worth comparing because the same fallacies of state-led growth and crony protectionism hobbled the apartheid economy, too.

To address South Africa’s official corruption, lack of service delivery, stubbornly high structural unemployment and persistent poverty, we ought to focus on the proper role of a government in the economy. Instead of promoting favoured interests at the expense of others and pursuing vanity projects that aggrandize socialist leaders, our government should limit itself to its most basic duty: establishing and protecting the right of every South African to life, liberty and property.

Instead of relying on the government for “service delivery”, we ought to realise that nobody other than the citizens of South Africa can, through their own labour and innovation, create the means to provide the services they need.

Nostalgia for “good old days”, days that weren’t even very good for those who were supposed to benefit to the exclusion of everyone else, recalls a false history. Perpetuating such a myth will do nothing to improve the government’s economic policy performance today.

On the contrary, it is a distraction from the real danger, namely the popular demand for service delivery, which calls upon a well-meaning government to intervene in the market in the vain hope of providing a better life for all. Like all national socialist governments before it, including the apartheid state, it will inevitably “fail to achieve the ends aimed at by their authors and supporters”.

Besides, perpetuating the myth of a competent apartheid government is racist. DM


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