Democracy or Self-Interest: Socialism in South Africa

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Socialism in the modern age is either prefixed by democracy or suffixed by it, to denote a different variety of socialism from the horrors of the ideology in the 20th century. Social democrats or democratic socialists, the consistent theme in the socialism of the 21st century has been democracy, the will of the majority. Instead of the centralization of power in the state. The new socialism, as is described by Richard Wolff entails the special treatment of worker co-operatives through subsidies and tax breaks so as to have the desired ownership of means of production by the workers that Marx envisaged all those centuries ago (rdwolff.com- The New Socialism: Moving Beyond Concentrated State Power).

The position of Professor Wolff is that of democratic socialism, a rather bottom up approach to the ‘democratization’ of society at all levels whilst the close cousin of that, at least theoretically would be social democracies, where instead of worker co ops being the driving force of the democratization, state owned enterprises and general state ownership of small to vast swathes of the economy are the democratization tools of the economy. Social democracies differ from their 20th century counterparts according to socialists by being accountable to the populace since state officials are regularly elected (M. McCarthy. Jacobin Mag 2018. Social Democracy is not Democratic Socialism).

Social democracies are the closest resemblance of 20th century socialism in theory, whilst in practice given the factors influencing their successful implementation (matured democracies, strong independent institutions, history of free market economy limiting the scope of state interference in the economy) in Scandinavia particularly, they differ remarkably from their predecessors in avoiding dictatorships politically at least. Now the intricacies of what entails these theories beyond this general summation, is beyond the scope of this piece, the underlying theme though in both varieties of this new age socialism is the ‘democratization’ of society as McCarthy, an assistant professor, and contributor to the Jacobin magazine, a leading socialist publication would say.

Now, the South African economy would most likely be classified as a social democracy. The criterion used to determine that the Scandinavian economies are social democracies, namely large and protracted state involvement in the economy through ownership and worker friendly legislation in relation to unions or collective bargaining would make our dear country qualify as a social democracy. Large industries in South Africa are owned wholly or in part by the state, the arms manufacturing industry through Denel, the energy production and distribution industry through Eskom and the aviation industry through South African Airways just to name a few. As has been established, the main defining element of the modern-day socialist is the democratization of society in all aspects, especially in the workplace or in the broader economy. It would dictate therefore that if say the majority, through their proxies were to determine that one of the aforementioned state operations is no longer necessary, there would be no objection from the socialists, seeing as this would be the will of the majority, right?

SAA is currently proposing retrenching a large number of workers so as to control its constantly ballooning costs, all in the effort of keeping the enterprise commercially viable. SAA since being a SOE, its executives are chosen by elected representatives therefore the executives themselves represent the will of the majority in that they are appointed by them. A private enterprise has its executives and directors chosen by shareholders, SOEs by nature have the executives  chosen by the ‘majority’ if wholly owned or in part if it is partly state owned, SAA represents the will of majority if we are to use the logic of the modern day socialist of putting democracy not as a means of attaining certain ends but as an end itself.

If democracy is the guiding principle for the new age socialist then surely executives appointed by elected representatives are a manifestation of this democratization of the economy, yet the unions and the left in general are against the proposed retrenchments, all in favor of the workers currently employed by the state. The question arises, should the employees of SAA override the will of the majority? Are SAA workers not undermining the democratization of the economy? These workers are threatening strike action if their narrow self-interests are not met (being employed is the self interest of course) and they are applauded by the left whilst capitalists are chastised for acting in their self-interest using their own capital instead of others’, as is the case with the employees of SOEs. Clearly democracy being an end in and of itself is absurd, there are certain aspects of one’s life which can never be subject to a vote, actually any aspect concerning the individual which poses no external threat, threat being the use of force/aggression should never be subject to any democratic process without the express consent of the concerned individual. The problem with democracy as an end instead of a means to an end is that it then makes whatever the majority deem true as being true, this idea of the democratization of broader society is demagoguery in earnest. 

Liberty on the other hand does not rely nor seek the democratization of society, capitalism, merely needs freedom, the protection of private property rights and stable laws for it bring about prosperity. Economic freedom the freedom to start an enterprise or be an employee with minimal to no artificial barriers to entry (state regulations like the Minimum Wage and labour legislation are artificial barriers to entry in the market) is the defining element of capitalism. Voluntary interaction through contracts is what is envisaged by capitalism, interactions free of the coercion of the state with their threat of jail. Instead of the democratization of society, capitalism seeks the liberalization of society, that is, making society much more free, individuals much more free instead of being subjected to whims of the majority in one respect or another. The narrow pursuit of profit, that dreaded goal of the capitalist is beneficial to society at large as it facilitates the creation of wealth, SOEs have a hard time creating this wealth due to their inability to adjust to market indicators because they are not motivated by profit, meaning they are not motivated by efficiency but rather by non-economic considerations like uplifting the poor from poverty or ‘equality’, at the expense of taxpayers who had to make efficient economic decisions to be able to pay said tax to begin with!

SOEs represent another dimension of this ‘new age socialism’, that is social democracies. So South Africa is a social democracy in the regard that there are a myriad of SOEs and not to mention the ‘safety nets’ courtesy of the Department of Social Development, so we fit this mold of a social democracy, the reason people would not want to call is such is because then they would have to confront the reality that social democracies are prone to the same failures that their pure socialist predecessors were prone to, that is, mass inefficiency culminating in a depressed economy and a lowering of living standards through mass unemployment, high inflation and a ballooning debt to maintain the economic expeditions of politicians. 

Let us take SAA for instance, it is currently operating at a loss whilst its privately owned and run competitors locally like FlySaFair are successful. Also international airliners like Qantas or British Airways are not facing the problems faced by SAA or at least not to the same extent. Admittedly there are successful state-owned ones like Emirates or Qatar airways. Although it is to be noted, the mere fact that private individuals can deliver this service without it costing the taxpayer, the question should be posed, to what end are state owned companies necessary? Clearly not for the sole fact of providing a service to the public since that can be done by private individuals, so their creation and continued existence are for every other reason but economic ones, even if there were economic ones, what right does the state have to spend our tax rands on services that can never be enjoyed by everyone even though everyone contributes to their upkeep.

What is apparent though is that self-interest, and never the egalitarian ideals that socialists want to peddle at us are what guides human action, be it in groups or individually, the SAA workers, in looking out for their jobs instead of the betterment of the country as a whole, prove this point quite saliently. I am not against self interest be it in groups or individually, which is why I am for the proliferation of co operatives so as to realize Marx’s dream of the workers owning the means of production, the problem is that those ilk of socialists want cooperatives to be the only form of ownership either explicitly or implicitly through advocating for tax breaks and subsidies for them. What I am against is group self interest being presented as egalitarian or just, by the modern age socialists and then using the power of the state to pursue their self-interest under the veneer of ‘social justice’. The SAA workers are acting in their self interest but theirs is unjust since they are using the collective stolen capital of the country (taxes) to realize those interests instead of using privately sourced capital like entrepreneurs do every time they pursue their own narrow self-interest.

My problems with democracy as a principle, an ideal, a concept are too detailed and plentiful for the purposes of this piece but I was hoping to highlight the hypocrisy of the new age socialist when they speak of the democratization of society at large, they support the will of the majority insofar as said majority agrees with their ideology or goals, the minute the majority changes its mind, democratization is no longer the ultimate ideal but rather subjective concepts like fairness and dignity become the guiding principle. 

I would go further and state that capitalism, the free market economic system of freely acting beings interacting is the best iteration of the principles of democracy without all its pitfalls. Consumers exercise their choice and vote for what resources to keep on being produced every time they spend their money in the market. Instead of the political democracy the socialist ground their belief in democracy in, the market is an example of democracy in that freely acting consumers get to vote for their preferred resources through their purchasing power. Unlike political democracy or the faux democracy of the new age socialist, the minority in the market can still be catered for, they can be a niche for some entrepreneur. The defining factor of market democracy is that it is not the all or nothing kind of the new age socialists, it does not rely on the concentration of power to be exercised nor efficient. If the democratization of society is the goal, then giving people more freedom to choose whom and what they interact with in the market is the obvious solution. The freer businesses and consumers are to pursue their own self-interest, the better their will is manifested in the markets and the better the democratization of society since consumers vote day in and day out in the market about a myriad of resources. 

It is safe to say that I am opposed to social democracies of the Scandinavian or South African type, the idea that the state should be involved in the economy is absurd since the state has no means of raising revenue outside of taxation so in essence the ideal rests on existing independent businessmen being taxed to fund their competitors which will be an SOE, any other business doing this would be chastised but yet when the mafia that is the state does it, they are hailed as heroes of the downtrodden. If democracy is the goal then markets are the answer for there is no better manifestation of the will of individuals than assessing their individual actions which are the manifestation of their preferences, these change every minute hence some businesses fail whilst others succeed. A businessman interprets the will of the people in a wrong way, he shuts down due to lack of profitability. An SOE in a social democracy interprets the will of the people in a wrong way, it soldiers on, subjecting the very same majority is was founded to help to even more debt and economic despair. 

Free markets and the Rule of Law are the antidote for the ills that afflict this great nation and continent. Letting the people of Africa be free to make economic and political decisions should be the goal of every African concerned with the betterment of their continent. The will of the people is already manifest in the market, African governments, particularly South Africa’s government needs to liberalize the economy and every aspect of life even more to further entrench this will of the people. The market, specifically the free, unfettered and unregulated market is a true form of democracy, one that is very upfront about its self-interest premises instead of hiding behind the veneer of moral superiority like the socialist and other forms of statists do. 

Life, Liberty, Property!

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