Promoting B-BBEE and Equity is Archaic

Business Report’s promotion of B-BBEE and transformation while attempting to castigate wealth in terms of colour is becoming a stuck record (July 26).

While Dr Surve is entitled to his opinions on this subject, his thinking does not resonate with that of two prominent black intellectuals – Moeletsi Mbeki and Dr William Gumede of the Wits School of Governance.

Here is what Moeletsi Mbeki has stated about B-BBEE: “It affects the emergence of black entrepreneurship by creating a small class of unproductive beneficiaries of crony capitalism. The most striking difference between the black elite of South Africa and the elites of Asia is the latter’s embrace of entrepreneurship.”

Dr William Gumede has condemned B-BBEE as “one of the most wasteful, costly and ineffective redistribution strategies devised in any post-colonial society.” He notes that since the late 1990s, R1 trillion has been transferred in the form of BEE deals which have benefited just a handful of politically connected black capitalists.

B-BBEE sends the wrong message, says Dr Gumede, of what it takes to become wealthy. It does so because it ignores the discipline, passion, persistence and resilience required to earn financial greatness. As such, it incentivises and rewards mediocrity and profligacy (Daily Friend, October 21, 2021).

The late John Kane-Berman of the Institute of Race Relations noted that BEE deters foreign investment because of its prescriptive, racial beneficiary hand-outs. Its corollary is less economic growth and fewer new jobs.

If BEE, or B-BBEE in its legislatively more prescriptive form, was such a success, unemployment in South Africa would not have grown from 3,4 million in 1994 to  10 million.

In the world of business success, equity is a non-sequitur simply because it has no place in the hierarchy of competence. Banging the drum of equity is really archaic because initiative and enterprise – the gold standards of business success – are stifled when they are shackled to an ideology that prescribes equity as an outcome.

Finally, it is supremely ironic that Sekunjalo’s Dr Surve should adamantly prescribe equity as the answer to “a more equal society” when over 25 years of BEE/B-BBEE has failed to do so. Moreover, equality is a myth. School should have taught him that when he discovered that there were “A” classes based on intellectual capability which differed from the B, C, and D classes. He should also have come to accept that inequality is an inherent factor of life that has nothing to do with race. Some of the best musicians have been black while some of the best entrepreneurs have been and are Asian. Nobody is equally competent at everything.

Only socialists and communists prescribe equality as an ideological objective because it means subversion to the lowest common denominator in a society that is not free.

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