“Power to the people!” In this age of distorted meanings, these words still retain an undeniable truth: Power over people should be monitored and exacted by the people in general.
“Power to the people” is often associated with the realm of politics, where people’s power slogans are most often employed. It argues for not only the accountability of the state to lie with the people, but also for those who exercise state power to be determined by the people. Since the dawn of the Enlightenment and the age of the democrats of Rousseau who developed the concept of people’s power being the basis for state power, the idea that individuals should have a say – no matter how miniscule – in how their lives are run, has been the mainstay of political discourse.
Privatisation – a word that sends chills down the spines of socialists and trade unionists –is the ultimate realisation of people’s power. The political elite does a good job of obscuring this. Privatisation, or desocialisation, involves the transferring of state-owned businesses and assets into private hands.
In South Africa, this is a hot button issue. SAA is in the throes of hopefully being privatised, and there have even been talks to privatise the behemoth that is Eskom.
The private or civil sector involves every aspect of society not tainted by the state. Privatisation falls into this segment of society. The civil sector, private individuals, would own these entities, rather than government owning them, ostensibly, on behalf of the people. Private individuals ought to be the ones responsible for delivering services to others because they do not source their funding from the increasingly scarce resource of taxes. They are also not as inefficient at rendering services or delivering products as the state.
An apt example is the food industry. There are few state-owned commercial farms and no or few state-owned processing facilities for produce. There are no state-owned retail stores, yet South Africans can go shopping and find food of a varied nature filling the shelves, all year round, even during a drought! Eskom, on the other hand, cannot deliver services because some coal got wet. Individuals, motivated by profits, happen to consistently deliver services and products in the market. Government, with no such incentive or even a fear of the consequences, with a monopoly like Eskom, fails to meet the demand of the energy market.
Privatisation ought not be conducted to benefit ulterior or entrenched interests, as was the case in Russia, where it created oligarchies. The state needs to be as far removed from this process as possible, to minimise corruption whereby people enjoying the patronage of politicians get sold state assets for pennies on the dollar. When handled correctly, transparently and with minimal state involvement, privatisation benefits ordinary citizens. This happened in Georgia and other first world nations that have followed the privatisation route. Privatization, to be effective and yield the desired results, must be wholesale.
Treasury’s piecemeal approach, trying to save this entity and sell that one, will not yield the desired growth rates necessary for improving the lives of South Africans. Privatisation needs a commitment from the whole of government, not only one part of it. The selling of state-owned entities should be accompanied by the deregulation of those industries, as well as comprehensive deregulation across the entire economy. Privatisation necessitates lower taxation to make it easier for emerging players to compete in the market and for consumers to realise the positive effects of that competition. Labour legislation like the National Minimum Wage Act, the Basic Conditions of Employment Act, and particularly the Labour Relations Act, to name a few, need to be scrapped or substantively amended.
Comprehensive or wholesale deregulation means the philosophy of the South African state should change, from it purporting to look out for our interests, to us, individually, looking out for ourselves and our communities. After all, no one knows what our best interests are but ourselves.
This can be done by government respecting our rights as guaranteed by the Constitution, including the rights to enter into contracts, to not have unreasonable regulations on our conduct or that of our businesses, and to not have our individual freedom and property rights deprived, interfered with or expropriated. The Rule of Law, as expressed in section 1(c) of the Constitution, is supposed to be a guarantor of liberty. Up to now, government has perverted it.
Privatisation can take various forms. Employees of SOEs could receive an ownership stake. South Africans over 18 could receive shares whilst other shares are sold to financial institutions to raise capital. This process could be handled by a board made up of mostly private institutions such as banks and other financial institutions which will act as agents of the population in proportion to how many of the overall population have ‘accounts’ with them. Civil society organisations could also be involved.
Free markets are the greatest manifestation of people’s power. The masses get to exercise their power individually and collectively through their rands, time, and labour. The effects of this free enterprise are real. Success and failure in this sphere of society are premised on the votes (rands) that businesses get. Privatisation will expand the realm of the free market, thereby expanding the people’s power. State ownership is power to politicians and their patronage networks. Privatize for people’s power!