Opinionista Oscar Van Heerden 5 August 2020

Let’s find the balance between private and public funding, between capitalism and communism

Calls for complete equality in healthcare, education and other social services are misplaced. Basic access to these services for all citizens must indeed be entrenched in our laws as is the case in our Constitution. They are basic human rights to which all citizens are entitled – but not at the expense of the haves.

The central aim of our critical thought is to articulate the tragic situation of blacks with a view to engaging it and proposing ways for its amelioration. This is the thrust of my argument here today. By tragic, I mean the centuries of slavery, colonialism and apartheid exploitation as well as subjugation in this, our beautiful country. To effectively deal with the private/public question, a sociological aspect of our society, we have to understand and view it through the lens of race, class and gender.

It is commonly accepted that both private and public phenomena exist, and can be viewed through these lenses in South Africa. After all, the majority in our country who are poor are black, and remain by and large in the working class of society. The overall majority within this group are undoubtedly female. These are the facts.

South African society over the centuries has developed into a capitalist system of democracy. The former regime was hellbent on ensuring that the so-called “Rooi Gevaar” (Red Threat) would not see the light of day within our borders. They were vehemently against the system of communism. In fact, so dead against communism were they that the very first piece of legislation enacted post the 1948 electoral win of the National Party was the Suppression of Communism Act of 1950. The subsequent banning of the SACP followed.

Unfortunately for the apartheid regime, the SACP was and still is an alliance partner of the governing party, the ANC. An agreement of sorts was entered into between these two allies in the 1960s. It’s referred to as the “two-stage solution” to SA’s historical problem. The primary mandate and job of the ANC was the first stage: To ensure liberation of our people and lead them to universal suffrage (one person one vote). Then, the SACP would engage in their primary mandate (the second stage): To lead the country towards a socialist epoch and democracy.

The problem was that neither agreed on specific timelines for the second stage. After the 1994 breakthrough, the ANC embarked on a mission to ensure a better life for all in Mzansi and nowadays makes it abundantly clear that it is not their mission to implement socialism, but that of the SACP.

Why am I taking you down memory lane? And what does all this have to do with the private/public debate in SA? I have taken for granted that the public-private distinction is always established in concrete contexts that are the loci of ideological contestation. The point I want to illustrate is that SA was never wholesale in favour of a communist/socialist dispensation and therefore calls from certain quarters for complete equality in healthcare, education and other social services are misplaced. Basic access to these services for all citizens must indeed be entrenched in our laws as is the case in our Constitution. They are basic human rights to which all citizens are entitled, but not at the expense of the haves.

Rather than seeing those paying for private services as diverting income from a national system, we can view them as subsidising public goods. By having private security companies, upper-middle-class people do not require as much from the national police service. The police can focus on areas without private security, and where there is a greater need.

Capitalism advocates for an economic system characterised by private or corporate ownership of capital goods, by investments that are determined by private decisions, and by prices, production and the distribution of goods that are determined mainly by competition in a free market.

Communism is a political and economic system that seeks to create a classless society in which the major means of production, such as mines and factories, are owned and controlled by the public.

Socialism is an economic and political system harnessing an economic theory of social organisation. Socialists believe that the means of making, moving, and trading wealth should be owned or controlled by the workers because everything in society is made by the cooperative efforts of the people and citizens. So, where is the middle ground, if any?

Social democracy is a government system that has similar values to socialism, but within a capitalist framework. The ideology, named from democracy where people have a say in government actions, supports a competitive economy with money while also helping people who are unemployed or whose jobs don’t pay a lot to ensure their basic rights are met. I am a social democrat.

Having distinguished capitalism from communism and contrasted socialism with social democracy, let’s look at the private/public dichotomy in SA. There remain class contradictions within our society, no doubt. The question we must ask is: How do we locate these contradictions within the context of our Constitution and its prescripts? Are we violating people’s basic human rights by accommodating the private sector in our country? Private healthcare, private schooling, private security etc? Are healthcare, schooling and security not supposed to be public goods for all citizens?

Rather than seeing those paying for private services as diverting income from a national system, we can view them as subsidising public goods. By having private security companies, upper-middle-class people do not require as much from the national police service. The police can focus on areas without private security, and where there is a greater need.

Some argue that by having wealthy citizens pay for their own private services, this diverts funding from the public service delivery in the health, school and security sectors. They envisage a national system where all of these public goods are centrally and equally offered by the state. But others argue that those who have wealth, and secure incomes can choose where to spend their wealth and income. They have the right to pay for additional (and better) services (such as schooling, health and security).

How does social democracy accommodate this dilemma?

Surely, there is nothing wrong with a society that allows a multi-layered class society? What is the problem with those who have the means, paying for their own public goods (via the private sector)? The key concern relating to the evident inequality is that the basic needs of the have-nots are not being adequately met. Is it then reasonable to look to the haves and expect them to pay their taxes (for the have nots), and give up their access to quality private services (for which they choose to pay)?

Rather than seeing those paying for private services as diverting income from a national system, we can view them as subsidising public goods. By having private security companies, upper-middle-class people do not require as much from the national police service. The police can focus on areas without private security, and where there is a greater need.

The same argument can be made for the public hospital system. Public hospitals do not serve those who utilise private healthcare. This reduces the pressure. In addition, it should be borne in mind that not only are those who make use of private services subsidising a public good, it is the personal income tax, VAT and company tax from these “haves” which fund the fiscus (and all public services). This is essential to ensure that the basic rights of fellow citizens are met.

Of course, in an ideal world, we would have a strong public service – strong enough to cater for both the haves and the have nots. Our public universities provide an example of this. They are some of the best in the world. Yes, the bottom 15 universities probably do need to improve some more, and that’s an ongoing battle which I support. But that is not the case for all public goods. I argue that rather than closing the private services, we look to regulate them and require a public contribution from them. By way of example, private medical doctors could be required to do 20% of their work in a public hospital. Private security firms could provide a vehicle for use and deployment by the police. And so on.

Free market capitalism does not work. Neither does communism. Socialism seems as far off as the second stage of our liberation. New ways of bringing together the private and public are required. New instruments for redress and ensuring all have access to basic services, and that their needs are met, are urgently required.

This requires public-private collaboration, not conflict. And our redress and transformation agenda should remain central to such partnerships.

Growing a black middle-class must remain a priority for all of us. Ensuring that we put in place mechanisms to assist historically disadvantaged individuals (HDIs) and communities is essential. A key consideration for the social democrat is to ensure equal opportunity, and where necessary to redress historic disadvantages to ensure that their class mobility is possible. 

This is done through targeted interventions – such as NSFAS, bursaries (or fee exemptions) at private and public high schools, a social welfare grants system, subsidies on basic foodstuffs, zero-VAT on essential items, free access to a capped amount of water and electricity, a National Health Insurance, free higher education for poor and working-class students, a basic income grant for the unemployed, etc.

As a social democrat, I am all for a comprehensive social welfare system for the poor in SA, and one that targets the historically disadvantaged as a form of redress. And if that means even higher taxes on the wealthy and employed, or possibly a wealth tax, then so be it.

Free market capitalism does not work. Neither does communism. Socialism seems as far off as the second stage of our liberation. New ways of bringing together the private and public are required. New instruments for redress and ensuring all have access to basic services, and that their needs are met, are urgently required.

The mumblings – at times violent protests, threats and use of burning tyres to draw attention to demands where the demand is for equality, for equal everything – and threatening to close down the private sector if the demands are not met, simply won’t wash in SA. The energy put into such would be better expended on recommending and forging new pathways.

It need not be so traumatic. Juan Manuel Amaya Castro tells us that “perhaps one can explore ‘an alternative’ without perceiving a demand. Perhaps one can just run along with the critiques, explore them and understand them, rather than resisting them out of hand because they sound ‘too radical’. We should not forget that it was once very radical to challenge patriarchy.” DM

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