We need radical economic transformation to give substance to Workers’ Day

During Apartheid, labour was heavily regulated, with workers and employers having to defer to the whim of government in how they conducted their relationships. It is appropriate, then, that South Africans celebrate Freedom Day and Workers’ Day in such proximity to one another – both having to represent our departure from Apartheid (economic) thinking.

The transition to democracy should have resulted in substantive economic freedom for all South Africans, especially the working class. However, it seems we have chosen to perpetuate the arbitrariness of the previous regime.

Section 22 of the Constitution guarantees everyone’s right to freely choose their profession, meaning workers and employers should be free to engage in whatever work they desire, on whatever terms they agree. This is, after all, the very definition of economic freedom. Most importantly, the job market should be as easily accessible as possible, without government erecting arbitrary barriers and perpetually increasing the cost of living.

The Constitution envisioned radical economic transformation from a state-centric imposition of terms to a people-centric agreement-based society. However, we have continued the pattern of Apartheid labour regulation at the behest of those grounded in the same kind of paternalistic thinking: they know what’s best for everyone else.

The famed economist Murray Rothbard once wrote that it “is easy to be conspicuously ‘compassionate’ if others are being forced to pay the cost.” This quote highlights the lack of empathy underlying arguments in favour of policies like the national minimum wage. Ivory tower intellectuals and politicians appear very concerned about the plight of the poor, yet it is the poor who inevitably bear the brunt of the unintended consequences of the policies these intellectuals advocate.

The minimum wage, in particular, has a racist history in South Africa. Wage boards, which determined sectoral wages, were established specifically to ‘protect’ white workers from their black competitors. Today, still, sectoral minimum wages keep poor South Africans out of the job market by prohibiting them from working for less than a figure our ivory tower inhabitants deem ‘too low’.

How can South Africa celebrate a day like Workers’ Day when it is accepted practice to trap the poor in unemployment? Other policies, like the proposed liquor policy which will effectively outlaw shebeens, and disastrous commercial zoning, accumulatively retard any kind of meaningful emancipation from poverty.

These anti-economic policies are not economic phenomena at all – they are political tools used for the exclusive benefit of whatever member of the political class happens to be speaking. The reality for poor South Africans is that they want to support themselves and their families; and when we entrench prohibitive labour laws, we prevent them from doing so.

Economic freedom is when individuals can trade with each other and offer their services to others without the sword of Damocles of government intervention hanging over them. It is when a poor person can use his house as a storefront without having to dance to the bureaucratic tune of government regulations. It is when home owners can sell their homes without a state-mandated pre-emptive clause stopping them. It is when emerging farmers can buy small plots of agricultural land without the Subdivision of Agricultural Land Act stopping them. And if they want – heaven forbid – to work for less than R3,500 per month because they cannot find employment at a higher rate, they must be able to do so!

The poor appreciate and understand their own economic reality better than anyone else, and are best placed to decide how to use the resources which they have. To force the poor to toe an ideological line, rather than work on empowering themselves, is immoral and defeats any aspiration South Africa might have about radical economic transformation.

The continuous blame-game in South African politics about the economic woes we face has produced no transformation. In the background to these politically opportunistic battles the poor stand in queues trying to comply with regulations, when they could be building productive businesses.

True empowerment will not happen once a fictitious scapegoat is finally pinned down and forced to ‘pay’ – it will only start happening when the anti-economic laws and regulations which have a stranglehold on the poor, such as the minimum wage and regulations which increase the cost of living, are repealed. This will free up unquantifiable amounts of wealth which could be used for the establishment of small businesses, expanding them and creating more employment. The more workers who can celebrate Workers’ Day, as workers, the more real meaning the day will have.

* Chris Hattingh is an Intern and Martin van Staden the Legal Researcher at the Free Market Foundation.

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