Sunday, March 6, 2011

A nation of dependents.

With MONEYWEB’S comprehensive coverage of and comment on Pravin Gordhan’s latest budget, I want to focus on the intriguing debate that is gaining momentum – a “welfare state” versus a “developmental state”. The 2011 budget has again placed unemployment and poverty as the key priorities of our time, and in the weeks to come experts, politicians, ideologists, vested interests and the media will feed off the policy meal that the latest budget has placed before us. No doubt the semantics on that menu will include “welfare and development”.

In essence they mean nothing more than “care and growth” – care referring to welfare and growth meaning developmental. This growth or development does not refer to economic or GDP growth. It means the development, empowerment and enablement of people. As our recent economic history has shown, they may be linked in theory but they are not the same. GDP growth is arguably fruitless if does not lead to individual growth.

The attributes of care and growth are present in all relationships of power: between leader and follower, supervisor and subordinate, supplier and customer, teacher and pupil, and parent and child. Parenting is our first exposure to power. It gives us a good insight into what power should do and the appropriate balance between care and growth, or between welfare and development.

A good mother knows exactly what behaviour is appropriate and when the relationship has to switch from care to growth. It is completely inappropriate, for example, for a mother to breast feed an 18 year old offspring. It is just as inappropriate for a mother to force feed solids to a newborn baby.

Good parents do not give in to the whims of childish desires. Discipline and elements of growth or development are always present. We know that parenting mostly goes wrong when there is a lack of appropriate emphasis on either care or growth at the appropriate time. This often happens when parents seek to be “popular” with their offspring and the child ends up being spoilt, with very high expectations and low aspirations: in other words, expecting everything to be done for them and aspiring to do little for themselves. They could take a leaf out of Bill Gates’ or Warren Buffet’s parenting book, in which they have said that their children will inherit very little or nothing from them because they do not want them to be members of the “lucky sperm club”.

In an earlier article, I discussed the critical social flaw of our time of high expectations and low aspirations. The key difference between my father’s generation and my children’s generation has been the switch from an independent, prudent and “self-help” society with low expectations, to an age of dependence, imprudence, immediate self-gratification and high expectations.

The greatest parenting perversion of all is where parents see their children as a means to an end: to be “used” for self gain. This includes crimes such as abuse and child trafficking. It also includes those who deliberately have children “as an investment in the future”, for some or other social grant from which the children themselves seldom benefit, or even sins such as using children as pawns in messy divorces or as emotional crutches. Then parenting loses its legitimacy.

The parenting model is a perfectly appropriate analogy for government. The classic definition of the role of government is to care for those who cannot care for themselves or who have no-one to care for them, and to create the conditions in which the greatest number of citizens have the opportunity to care for themselves. It is as solid a guideline as ever, but over time and probably in line with the shift from high aspirations to high expectations, as well as in response to Enronic behaviour, this ideal has become rather muddied. In the same way as parenting goes wrong when it seeks to be popular, unrealistic expectations in society are inflamed by the political popularity contest which in turn reduces the willingness of even those with means and ability to be fully self reliant. The ideal of minimal government may be gone for all time.

In the same way parents have to establish rules of behaviour for the care and growth of their offspring, so too do governments establish rules, regulations and laws. These have to be subjected to the care and growth test – do they enable and encourage people to be self reliant or to stay breast-fed adults? One set of laws that clearly falls into this category is the proposed labour laws, which many have argued remove choice and opportunities for self reliance.

But the worst perversion of government is the same as that of parenting – where the offspring are seen as a means to material self gain. In principle, there is little difference between people in government seeing their task simply as a means of self enrichment and parents who see their children as a means of self gain.

The budget is the practical expression of intentions. So I decided to examine the 2011 budget to see whether one could align it to a specific category of care or growth: developmental or welfare. Again, this is not GDP growth but individual empowerment. Of course these categories overlap quite a bit, but the publicly stated policy is to have a developmental state rather than a welfare state. I thought it would be a simple matter of calculating the percentage of government spending that can be classified as “care” and the part that could be classified as “growth”. It became an impossible task because the metrics simply don’t clearly define the expenditure and one would have to analyse the detail of each vote to determine not only its form, but also the intention behind it and, most important of all, the likely consequences.

So I gave up and decided to take a hang-glider’s view (which is a bit closer than a bird’s eye view) at the budget in the context of overall fiscal and general economic conditions.

We cannot claim to be a welfare state; although the budget continues to put much emphasis on social security and social grants. The fact is that we do not have adequate social security. There is no national health scheme (yet) and high quality free education for all is still decades away. But more people are relying on social grants than there are taxpayers supporting them. The implication is simply that we are spending like a welfare state without the means to support it, or even the full benefits accruing from it.

With the emphasis on job creation, the specific R150bn measures detailed in the 2011 budget, and against the background of Ebrahim Patel’s NGP we seem to be trying to establish a developmental state. But here there is a critical element missing, and Gordhan alluded to it in his closing remarks. We don’t seem to realise that “growth” requires toughness. We have to be informed, robust, competitive, prudent and dedicated. Unlike care, growth comes with some pain, with determination and a great degree of willingness to help ourselves. While we have to have measures to avoid exploitation, we cannot be pampered in self development. We have to have very low expectations. We have to be focused more on our responsibilities than our rights. We cannot want a job badly enough and then insist that it must meet our own definition of “decency”. We cannot expect inexorable pay increases (whether benchmarked by inflation or not) without having increased our productivity and the tangible value that we have added.

We may be witnessing a conundrum where “care” objectives are in conflict with “growth” objectives.

Perhaps a quote attributed to Abraham Lincoln says it best: “You cannot help men permanently by doing for them what they should be doing for themselves.”

Any good parent knows this.

No comments:

Post a Comment