Despite its promises, broad-based Black Economic Empowerment (BEE) has not delivered the same benefits post 1994 as racist Afrikaner Economic Empowerment (AEE) did after the Great Depression of 1930 even though both programmes relied on job creation, skills development and welfare services.
Unlike BBBEE, however, AEE went beyond this by relying on the Helpmekaar Vereeniging (mutual aid association) tradition of mobilising capital that triggered volkskapitalisme (people’s capitalism). Since 1994, broad-based BEE has used similar strategies — within a different political and economic environment and with a large, diverse population as its target — but it has failed to deliver the benefits to blacks because of various macro and micro factors.
In my recent doctoral study, to compare broad-based BEE and AEE, I focused on how the four dimensions of empowerment, namely economic, political, social and cultural operated at the macro-level and how they were applied at a micro-level. I used Iscor, now ArcelorMittal South Africa (Amsa), in Vanderbijlpark as a case study by analysing relevant documents, conducting in-depth interviews and having focus group discussions with current and former workers and managers as well as union officials.
When comparing these two programmes, we have to understand the nature and the role of the welfare state. Under AEE the National Party (NP) established a welfare state with the support of Afrikaner nationalists who rolled out social services. This was maintained through legislation, fiscal steps and a large network of parastatals to empower poor whites.
Modelled on Keynesian economics, these parastatals, including Iscor, were used to support a developmental agenda of the state that consisted of the provision of protected employment, housing, education and medical services to white employees and their families.
In Vanderbijlpark, the Iscor Housing Utility and the Vanderbijlpark Estate Company (Vesco) carried out these functions.
Under broad-based BEE, the ANC formed a developmental state based on a liberal model that combined market-based, private, contributory schemes with minimum government support for social services. Compared to AEE, the effect has been very small.
A closer look at the four dimensions of empowerment mentioned above revealed that political empowerment involves a collective struggle to increase control of the poor over resources and regulative institutions and the transformation of existing power relations.
Afrikaner nationalists adopted a political-legal framework to mobilise white Afrikaners and provide the basis for AEE. The Afrikaner Broederbond (Afrikaner Brotherhood) used patronage to systematically appoint Afrikaners in positions of control and ownership in government and parastatals to reduce power and control of white English-speakers and moderate Afrikaners not affiliated with the NP. After 1948, Afrikaner nationalism remained a powerful political force that determined employment and skills development within the public sector and civil service.
The ANC adopted affirmative action and broad-based BEE as redress for demographic misrepresentation in appointments and promotions within parastatals. Its cadre deployment strategy was used to appoint blacks and women in senior management positions and as non-executive directors of the Iscor board. Deep racial divisions, however, overshadowed this policy as white employees at Amsa continued to enjoy more power. Additionally, senior management, middle management, supervisory and skilled positions were still dominated by whites, whereas blacks constituted between 83 and 96% of unskilled and semi-skilled positions.
Economic empowerment seeks to ensure that people have the appropriate skills and access to secure sustainable incomes and livelihoods. Since the depression, macroeconomic policy has focused on public redistributive policies such as taxes, transfers and government spending. To this day, economic empowerment has been reduced to scorecards, graphs, and indices.
From 1924 onwards, with the support of white trade unions, AEE became a project of the nationalist government to roll out welfare benefits, to provide standard employment with regular hours, pensions and service benefits to poor whites. This combination of racist labour market policies, social welfare, and favourable credit arrangement allowed the white elite to become professionals and supervisors, and steadily increased their real pay. This resulted in social mobility for many whites as many benefited from career advancement both inside and outside Iscor.
From the 1970s onwards, state-owned enterprises (SOEs) were criticised as being too large and inefficient to deal with growing debt. The NP government responded to the crisis by adopting a nationwide programme of privatisation of the SOEs, including Iscor in 1989. In 1994, the ANC applied the same strategy by adopting the Reconstruction and Development Programme (RDP) to increase spending on social development, but later reversed this when it implemented the Growth, Employment and Redistribution (Gear) strategy.
Gear focused on accelerating fiscal reform, furthering tariff reform, public sector restructuring, and continuing the reorientation of expenditure towards service delivery to the poor. Following the liberalisation of trade, the steel tariffs declined from 30% to 5%, causing major flooding of the South African market by cheap Chinese steel products. This resulted in a reduction in sales volumes and production, as well as capacity utilisation.
Under the new economic policy and new management, Amsa’s number of full-time workers declined from 14 000 in 1990 to 8 500 in 1998 and 6 000 in 2016. Additionally, Amsa adopted a labour market flexibility strategy in which 50% of its workforce were casuals, part-time workers and subcontractors supplied by Monyetla Labour Broking, a subsidiary of Vesco. Further, Amsa outsourced non-core functions and services, such as fire detection, catering, security, facilities management and cleaning services that have benefited white employees and generated precarious work for the majority of African workers.
The role of culture in enabling empowerment has long been debated by social scientists. French sociologist Pierre Bourdieu recognised culture as a form of capital, having material benefits and convertible to a wide range of assets such as linguistic services, scientific knowledge and educational qualifications. In recent debates, social scientists applied social capital to explain how poor people develop bonding, bridging and linking capital through social networks to foster moral responsibilities and norms, and social values to promote social empowerment.
My study found that under AEE, civil society organisations (CSOs) such as the Broederbond, the Helpmekaar Vereeniging, and the Afrikaanse Christelike Vroue Vereeniging (Afrikaans Christian Women’s Association) played an important role in organising white Afrikaners and articulating their various interests in society, as well as building capacity and awareness of resources mobilisation. This highlights the role of people, civil society organisations and networks as levers to promote empowerment. Leaders of AEE in Vanderbijlpark used the Helpmekaar tradition to provide poor whites with some form of training, bursaries and support to establish Afrikaner-owned enterprises.
The Broederbond established the Sakekamer (Chamber of Commerce) to facilitate social networks, co-operation among white businessmen, and to discover mutual benefits between Afrikaners and those in business and government. The Iscor Club, with membership restricted to whites only, aimed to foster the development of “community” and promote the development of social capital.
The Dutch Reformed Church (DRC) contributed to Afrikaner social empowerment in Vanderbijlpark by preaching and applying the late 18th century Calvinist doctrines of the Protestants. The DRC organised the Afrikaner community into a cultural fabric and encouraged principles of hard work, respect for the authorities, and an intolerant attitude towards dishonesty or corruption.
White Afrikaners believed that the Anglicisation policies of the British Empire had destroyed their language. Through its Federasie van Afrikaanse-Kultuurvereniginge (Federation of Afrikaans Cultural Organisations), the Broederbond used Afrikaans to develop a homogenous group identity, build nationalism and foster group cohesion among white Afrikaners.
Under broad-based BEE, social empowerment was obliterated because of the lack of alignment between politics, the economy and CSOs. Compounding this problem was the fact that before 1994, CSOs had been at the forefront of social change, fighting for democratic rights and social justice but post-1994, they were sidelined by the government.
Despite the culture of ubuntu and stokvels in African communities, few organisations besides workplace forums existed in the black townships to promote social empowerment. African languages were suppressed at Amsa with English and Afrikaans acting as dominant languages. Religion in Vanderbijlpark was undergoing secularisation with old denominations disintegrating and new charismatic churches rising.
It’s clear that AEE was more effective than broad-based BEE because firstly, even though economic empowerment was the ultimate goal, AEE was supported by political-legal and sociocultural dimensions. Secondly, the AEE macroeconomic policy was underpinned by a Keynesian philosophy where the state, business, and white trade unions formed a social contract to uplift the poor. Lastly, CSOs played a major role in supporting AEE and the development of social capital using language, religion, and nationalism; whereas under broad-based BEE, CSOs were alienated from the state and, as a result, could not continue playing a key role in bringing about social change and social justice.
Dr Jantjie Xaba is a lecturer in the department of sociology and social anthropology at Stellenbosch University. This article is based on his recent doctorate in sociology at the university