Let's talk about SA's reality: Hand-outs vs. a hand up

Rhodes>Perspective>2014 Archive

Last week, I came under fire for writing, essentially, that hand-outs were not the answer to our country’s problems. The responses came thick and fast, but I was in the air at the time. I since landed, and think we need to have a proper debate.

Last week, at this cyberspace address, a piece I wrote about politics, initiative, entitlement and our past was published. I believed that the main point of my argument, was that it is better to give people a hand-up, rather than a hand-out. 

I first saw the reaction to the piece on a train, on my way from Zurich to Davos. (Yes, I spotted the irony there too.)

I was extremely surprised. Gobsmacked, in fact.

All in all, the reaction seems to have taken several themes:

  • That I am a white man, and thus simply unable to know what it is like to be poor and black, and homeless.
  • That I somehow accused black people of laziness.
  • That I am wrong on the facts.

The person who perhaps wrote the most powerful response on this was Stuart Wilson, from the Socio-Economic Rights Institute. It is to him that I think it best to respond, because his piece was cogent, well-argued, and contained many facts.

Still, it doesn't mean he's right.

The problem with arguing with Stuart (Mr Wilson, I realise you called me by my title, I think we're the kind of people who can argue over a drink as well as online. So I hope you don't mind me using your first name) is that you can't attack him himself in any way. Anyone with a legal qualification and chooses to work for SERI, and to fight for the poor, is going to win any integrity fight with just about any journalist, particularly a proud capitalist like me. That means if I am to have any hope of escaping this argument alive, I have to debate him on the facts. Hopefully in a bar, and in cyberspace.

One last point before I start. I am, of course, white and male. The evidence on that is pretty solid. I did benefit from Apartheid. I do believe economic Apartheid still exists. I believe that my previous writing will back me up should I be questioned about that belief.

Now, let's move to working out what it is we are arguing about.

The title of Stuart's piece, "Mr Grootes, a welfare state is a just state" seems to indicate he believes I want a complete end to welfare grants, free education, and free housing. Much, if not most, of his response is in fact predicated on that assumption. And that assumption also seems to have been held by most of my correspondents on Twitter.

But that is not what I said.

I didn't say the state should stop helping people, I didn't say the state shouldn't provide water and electricity, and I certainly didn't say the state should stop educating children. What I said was:

"For me, it's clear that promising people free houses was a massive mistake. What should have been promised was free housing material, and direction or supervision to build them. That model would have been cheaper, and faster. It would have meant government would not have had to pay people to build these homes, their owners would have done that themselves. And with not much else to do, they would have been able to give it their full attention. This would also have had the happy benefit of having a class of people who had built their own homes. They would be immensely proud homeowners.

“And once a community was done with homes, then come parks and the recreational facilities. Think of the dignity all of that would have instilled, never mind the communities it would have created."

This, for me, was the main point of the piece. That government should help people build their own homes. Not just simply build them for them. That if government had simply aided, directed, provided the materials for, and perhaps supervised, more South Africans would be living in permanent structures than are currently now.

Somehow, that morphed in to an image of Mr Grootes as a heartless capitalist hack.

What we really want is a working housing rental market, that is able to cater for people who have next to nothing. As I have said on these pages before, again in response to a member of the Socio-Economic Rights Institute, what we really need in this country is a properly functioning rental market, that sees people renting property for time, while they build up the capital to buy their own home. Instead, what we have now is that people with very few means are caught between a broken rental system because of the Prevention of Illegal Eviction Act, and the poor structure that is the RDP house. Or nothing at all.

Stuart talks about the examples of Asia in particular, and how they grew their economies after the Second World War. He suggests also that they are now providing proper welfare states for their citizens. Asian states may well be creating these states, but the money has to come from somewhere. Those states, only now, have the money to do it. Our state is doing what it can with the means that it has, which do not match some of those countries just yet.

I have no problem with that.

But it is important not to put the cart before the horse. The fact is, Stuart, the money has to come from somewhere. It does not grow on trees. Tax is generated by the private sector. And that private sector needs to have space in which to operate. That is what is missing in our environment. You seem to believe that the Asian countries had governments that played a strong role in their economies, almost directed them, so to speak, towards certain industries. Well, maybe, depending on your interpretation of these things.

But some of those countries, such as South Korea, were also virtual dictatorships, while places like Taiwan certainly did not have the kind of human rights culture that we do. In other words, it may be impossible to have it both ways. There was a link between how those governments interfered in their economies, and the lack of freedom in those states more generally at that time.

What is really needed to achieve economic freedom, is in fact economic freedom. In other words, the freedom to hire who you want (notwithstanding affirmative action, which is something I have always supported, and still support) and to set a price for that labour. The worker then has the freedom to either accept that price or not. It's up to them. Yes, capitalists are then in a better position. But this is about jobs, not ideology.

But I have to say that in part, your mention of the Asian economies, and the "right to work" compact you believe occurred within them kind of proves part of my point as well. People had to work to get what they wanted. Things weren't just given to them on a plate. That is really my main point, that when it comes to particularly housing, if someone is able-bodied and able, they should play a role in building their own home, rather than having government do it for them entirely.

What is so evil about believing that?

Stuart also points to the example of the US, where he says much of its prosperity is based on Roosevelt's New Deal, which led to the War on Poverty, and subsidised housing. But the facts here must surely be questioned. Long before the Depression, the US was on track to be the world's biggest economy. It was already a manufacturing powerhouse at the turn of the last century, and had become the world's biggest manufacturer by the 1920s, before the New Deal. As a producer, it had no equal, and that was long before the idea of a welfare state was taken up there.

In India, while there has been much lamentation about the rise of inequality there, incomes in rural areas have grown by 7% a year over the last five years. That has had a huge impact on the lives of millions of people. Their lives are simply much better than they were, and their children's will be much better as a result. In a democracy where the government is unable to direct the economy in the way that Stuart seems to think Asian governments did. But this happened in a place with a human rights culture, where the government didn't try to stop people from making money.

In fact, speaking at Davos, Indian Finance Minister Palaniappan Chidambaram said that of course his government was worried about inequality. But he believes if he taxed the rich more than he does at the moment, they would have less money, less capital, to invest in the economy. In other words, fewer people will have jobs, if he taxes the rich less. It's a conundrum that our government faces too, and seem to have got about right for the moment.

This is also a country that has pioneered the idea of a "right" to a hundred days of work a year for every household, in certain states. In other words, people could work for government, and gain an income. Which is far better than just sitting back and waiting for the money to arrive, because a job is a job is a job. It brings dignity, and self-respect, and a reason to get out of bed in the morning.

The point is, sustainable jobs have been created in places where everyone can just get on with it, the employers and the employed, with the end result that people are employed, which is what we really want.

Again, speaking at Davos, British Prime Minister David Cameron said that what everyone in the developing world wants is "a job, and they want a voice". While I don't expect Stuart to agree with much of what David Cameron says, I can't imagine he can disagree with that.

Stuart, as a lawyer, ends his piece with the thought that:

“Quite apart from all of this, Grootes’ views are anti-Constitutional. Our Constitution guarantees everyone access to housing, food, water, electricity, healthcare and education – even, and especially, when they can’t afford to provide these things for themselves. These are not ‘vote-getters’, as Grootes suggests. They are basic rights – a fundamental part of the post-Apartheid social contract.”

Of course, he is correct, those rights are in the Constitution. But, and I fully intend to belabour this point, Irene Grootboom didn't get her house. She won her case, the Constitutional Court said she had a right to housing, and government must build one for her, but she died, years after the case, without a home. Irene Grootboom didn't get a house. And no minister was sent to jail for contempt of court. The Constitutional Court didn't summon any official to ask why she didn't get her home. No action was taken.

And we see the same with cases that SERI itself has been involved in. That same court ruled that the City of Joburg had to provide housing for people who were evicted from a private property. The city fought at every turn. That judgment could be extended to suggest that everyone living out in the open has to be housed by the municipality in which they are.

Is that happening? No, of course not. Could government, local government that is, provide that kind of service? No, of course not. Because our economy just isn't making enough money for our government to provide all of these services. And while the Constitution does appear to talk about the "progressive realisation" of these rights, the fact is there is still no reason why the people who would benefit from the right to housing should not play a role in building that housing.

As has been said before, you can't eat a Constitution. You can't just have rights. You have to do some of it for yourself. Your life isn't just given to you. You have to grab it. And make what you can out of it, with what you have. Of course, some of us start with more, because of our parents, and, in this country, the colour of our skin. Government should help, where it can, but it is up to you as well. 

By Stephen Grootes

Source: Daily Maverick

Grootes is the author of SA Politics Unspun. He is also the host of the Midday Report on 702 & Cape Talk and political reporter for Eyewitness News.