'DTI equals Destruction of Trade and Industry' - Business Day, 29th April 2013.

In his fortnightly column in Business Day, the Institute's CEO, John Kane-Berman, says that the Licensing of Business Bill of 2013 is another step closer to bringing about a 'national democratic society' through the National Democratic Revolution. The ANC recommitted itself to this objective at the national conference in Mangaung in December last year.

The Licensing of Business Bill of 2013 is legislation so mad there must be method in it. But what?

Apartheid restrictions on black business, such as limiting the size and number of shops and the range of goods they could sell, were criticised as mad, but there was method in that madness too.

The underlying logic was that licensing conditions in the supposedly "white" area should be so onerous that Africans wanting to run businesses even in Soweto - which for these purposes was part of the "white" area - would become so frustrated they would emigrate to the "homelands".

Another part of the logic was to protect white business from competition. 

Anti-competitive thinking also characterises Rob Davies's new licensing bill. Much of the motivation for periodic "xenophobic" attacks on foreign shopkeepers is that they undercut prices charged by local traders. Dr Davies's bill will empower his Department of Trade and Industry (DTI)  to curtail foreign competition in the retail sector just as it is using local content requirements to curtail such competition in manufacturing.

Davies claims his bill is needed to stamp out money laundering, sale of illegal goods, and other crimes. This is a poor excuse for legislative overkill. It also overlooks a likely perverse consequence - that making lawful enterprise so difficult when unemployment is so high will leave many people little option but to turn to crime.

Apart from eliminating foreign competition among hawkers and other small-scale traders, what could be the real reasons for the new licensing bill?

In part the bill is merely the latest manifestation of the dirigiste mindset in the Government, civil service, and ruling African National Congress (ANC).

From medicine price controls to racial quotas in the police, from proposed mineral beneficiation requirements to curtailment of coal exports, from disciplinary action at schools to mooted optimal sizes of commercial farms, from the Legal Practice Bill to Blade Nzimande's plans to lay down the law to universities, the country is in the steadily tightening grip of people who believe that state control is always desirable and that the liberal concept of a limited state is anathema. 

But there are probably other motivations. One is to increase the dependency of the voting poor upon the ruling party. Labour law prices millions out of the labour market, forcing them to turn to self-employment in "survivalist" enterprises such as hawking. Now even self-employment without permission will be prohibited.

Another possible motivation is to undermine the (limited) proposals in the National Development Plan (NDP) to lighten the regulatory burden on small business.  

The bill will ensure that businesses are so trussed up in red tape that more and more will fail and more and more people will be thrown out of work. Since the creation by small business of millions of jobs is one of the key objectives of the NDP, failure to create them will discredit the NDP itself.

The bill will also give the DTI the power to stifle at birth the very "boost of mass entrepreneurship" envisaged by the NDP.

This is so predictable an outcome it must be deliberate. The reason is simple. The DTI and others who believe in a far more interventionist state will then declare (again) that markets have failed, along with the free enterprise system, and that therefore the State must take unto itself even more power. By this roundabout route does Dr Davies's South African Communist Party (SACP) achieve its objective of introducing socialism.

This Machiavellian game-plan fits in with the ANC's "strategy and tactics" documents aimed at bringing about a "national democratic society" via a national democratic revolution (NDR). The ANC reaffirmed its commitment to these strategies, tactics, and objectives at its national conference at Mangaung in December, but this was obscured by all the media hype over the adoption by that same conference of the NDP.

Trade unionists have excoriated the NDP, but its most dangerous opponents inhabit key line ministries left by President Jacob Zuma to do their own thing. 

 This column was originally published by Business Day on 29th April 2013.

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