I am a coloured South African(an ethnic group that was previously disadvantaged due to apartheid era racial policies) we in South Africa have Affirmative action policies called Black Economic Empower(BEE) (Its open to all previously advantaged racial groups ie Black, Coloured, Indian they just call it BEE) that has led to mass corruption and cronyism.
>Start with crony capitalism, which in South Africa goes by the euphemism “black economic empowerment”. The idea behind it seemed laudable enough—to right a historical wrong. Under apartheid, the country produced white titans of industry such as the Oppenheimer family (owners of DeBeers), while making it hard for black South Africans to own businesses. The ANC(Ruling political party) felt it only fair that there should be black billionaires, too. To give them a leg-up it insisted that mining companies should hand at least 26% of their shares to the “historically disadvantaged”. Mining companies (as well as banks and insurers) did so willingly, diluting existing shareholdings when they transferred stakes to the likes of Cyril Ramaphosa, now the president, along with Patrice Motsepe, his brother-in-law, and Bridgette Radebe, his sister-in-law.[1]
I and alot of South Africans could stomach a one-off payment or one-off percentage equity stake in firms(in South Africa the government instituted a policy that South African Corporate firms would sell shares preferential)to disadvantaged groups but after these shares were sold, the government wanted to continuously repeat it.
>If these handouts had been a one-off tax, their harm would by now have been forgotten. But once the new black shareholders had sold their holdings, the government drafted regulations to repeat the process. And so capital investment in mines fell by 45% between 2010 and 2018, with output falling by 10% and employment by 50,000—a tenth of direct employment in the industry in 2010.[1]
When the government gives support not based on merit and competence but gender, race, religion or ethnicity you undermine industrial policy(Instead of support based on a person's potential ability or ability to do things)With affirmative action you end up institutionalising incompetence.
>Black Economic Empowerment, a policy that incentivises firms to give equity to black investors or business to black-owned suppliers, has created a new generation of Randlords with more political acumen than entrepreneurial talent. “Cadre deployment”, whereby ANC party(Ruling political party) members get jobs on the basis of factional fealty rather than merit, has degraded the state. These appointees steer contracts towards chosen “tenderpreneurs”, who in turn donate to the party. By 2007 Kgalema Motlanthe, a party grandee, said: “This rot is across the board...Almost every project is conceived because it offers opportunities for certain people to make money.”[2]
Many South African feel that our counrty has become "a cappuccino society, A vast, huge, black majority at the bottom with a layer of white cream and a few chocolate sprinklings at the top of it" referring to the small black elite who have gained great riches from the post-apartheid years - from a failed attempt to rebalance the wealth among the many.
Yes, I acknowledge the present-day inequities that racist, sexist, etc policies can cause, but if a Government was serious about addressing historical inequalities then you need to invest in education and skills development. Affirmative action never works in the long term, instead of making people competent and self-reliant,it makes them dependent on handouts.
Industrial policy can sometimes work in South Korea, Taiwan, Certain Industries in China, or it can fail spectacularly and end up being a waste of time and resources Malaysia and South Africa(instead of giving equity stakes and handouts you could have used those same resources to invest in everyone, not just a particular race, ethnicity, gender or religion.)
Affirmative action policies can actually be self-defeating and harm the industrial policies you have.
Contrast Taiwan and Malaysia's Industrial Policies and Outcomes
Taiwan's has currently a healthy semiconductor industry with many successful and impressive firms ie TSMC, etc.
And Malaysia with its affirmative action laws favouring certain ethnicities that ultimately undermined their industrial policies. The corruption and shenanigans that result from affirmative action policies happened in South Africa also happened in Malaysia and undermined their long term industrial goals.
Appropriating a quote from Deng Xiaoping "It doesn't matter whether a cat is black or white, as long as it catches mice." This is taken to mean that as long as the economy works, it is a good economy.
Affirmative action is equality of outcome. Do people think they have godly powers that can guarantee certain outcomes or results? There is an inherent risk of failure in all ventures and endeavours.
A correct criticism of capitalism is when it does not provide equal opportunity and so we should always strive to provide equal opportunity, but people confuse that with the equal outcome when, equal outcome can only be enforced through violence because different people, free people make different choices and when they make different choices they have different outcomes if you don't let them suffer the consequences of bad choices or reap the rewards from good choices then you have to use force or violence to get a prefered outcome
If people are really serious about freedom and equality then you should want not just the freedom to succeed, but also the freedom to fail.
I am a coloured South African(an ethnic group that was previously disadvantaged due to apartheid era racial policies) we in South Africa have Affirmative action policies called Black Economic Empower(BEE) (Its open to all previously advantaged racial groups ie Black, Coloured, Indian they just call it BEE) that has led to mass corruption and cronyism.
>Start with crony capitalism, which in South Africa goes by the euphemism “black economic empowerment”. The idea behind it seemed laudable enough—to right a historical wrong. Under apartheid, the country produced white titans of industry such as the Oppenheimer family (owners of DeBeers), while making it hard for black South Africans to own businesses. The ANC(Ruling political party) felt it only fair that there should be black billionaires, too. To give them a leg-up it insisted that mining companies should hand at least 26% of their shares to the “historically disadvantaged”. Mining companies (as well as banks and insurers) did so willingly, diluting existing shareholdings when they transferred stakes to the likes of Cyril Ramaphosa, now the president, along with Patrice Motsepe, his brother-in-law, and Bridgette Radebe, his sister-in-law.[1]
I and alot of South Africans could stomach a one-off payment or one-off percentage equity stake in firms(in South Africa the government instituted a policy that South African Corporate firms would sell shares preferential)to disadvantaged groups but after these shares were sold, the government wanted to continuously repeat it.
>If these handouts had been a one-off tax, their harm would by now have been forgotten. But once the new black shareholders had sold their holdings, the government drafted regulations to repeat the process. And so capital investment in mines fell by 45% between 2010 and 2018, with output falling by 10% and employment by 50,000—a tenth of direct employment in the industry in 2010.[1]
When the government gives support not based on merit and competence but gender, race, religion or ethnicity you undermine industrial policy(Instead of support based on a person's potential ability or ability to do things)With affirmative action you end up institutionalising incompetence.
>Black Economic Empowerment, a policy that incentivises firms to give equity to black investors or business to black-owned suppliers, has created a new generation of Randlords with more political acumen than entrepreneurial talent. “Cadre deployment”, whereby ANC party(Ruling political party) members get jobs on the basis of factional fealty rather than merit, has degraded the state. These appointees steer contracts towards chosen “tenderpreneurs”, who in turn donate to the party. By 2007 Kgalema Motlanthe, a party grandee, said: “This rot is across the board...Almost every project is conceived because it offers opportunities for certain people to make money.”[2]
Many South African feel that our counrty has become "a cappuccino society, A vast, huge, black majority at the bottom with a layer of white cream and a few chocolate sprinklings at the top of it" referring to the small black elite who have gained great riches from the post-apartheid years - from a failed attempt to rebalance the wealth among the many.
Yes, I acknowledge the present-day inequities that racist, sexist, etc policies can cause, but if a Government was serious about addressing historical inequalities then you need to invest in education and skills development. Affirmative action never works in the long term, instead of making people competent and self-reliant,it makes them dependent on handouts.
Industrial policy can sometimes work in South Korea, Taiwan, Certain Industries in China, or it can fail spectacularly and end up being a waste of time and resources Malaysia and South Africa(instead of giving equity stakes and handouts you could have used those same resources to invest in everyone, not just a particular race, ethnicity, gender or religion.)
Affirmative action policies can actually be self-defeating and harm the industrial policies you have.
Contrast Taiwan and Malaysia's Industrial Policies and Outcomes
Taiwan's has currently a healthy semiconductor industry with many successful and impressive firms ie TSMC, etc.
And Malaysia with its affirmative action laws favouring certain ethnicities that ultimately undermined their industrial policies. The corruption and shenanigans that result from affirmative action policies happened in South Africa also happened in Malaysia and undermined their long term industrial goals.
Appropriating a quote from Deng Xiaoping "It doesn't matter whether a cat is black or white, as long as it catches mice." This is taken to mean that as long as the economy works, it is a good economy.
Affirmative action is equality of outcome. Do people think they have godly powers that can guarantee certain outcomes or results? There is an inherent risk of failure in all ventures and endeavours.
A correct criticism of capitalism is when it does not provide equal opportunity and so we should always strive to provide equal opportunity, but people confuse that with the equal outcome when, equal outcome can only be enforced through violence because different people, free people make different choices and when they make different choices they have different outcomes if you don't let them suffer the consequences of bad choices or reap the rewards from good choices then you have to use force or violence to get a prefered outcome
If people are really serious about freedom and equality then you should want not just the freedom to succeed, but also the freedom to fail.
[1]https://www.economist.com/leaders/2021/07/24/end-of-the-line...
[2]https://www.economist.com/middle-east-and-africa/2021/07/24/...