Tuesday, June 23, 2015

Empowerment: a misguided obsession

The effects of not fully understanding this central theme of policy.

If you are going to have an obsession, make sure that you fully understand its true nature. Centre stage of much of what we are doing in South Africa is empowerment of the broad masses.

It is constantly on the lips of populist politicians and has become a major driving force in economic policy with billions being spent on empowerment projects from national, provincial and local budgets. It features in much of our legislation with laws prescribing who, what and where people can be employed and who qualifies for tenders. In turn it has fundamentally shifted organisational activities in the private sector.

Yet it is a moot point whether all of these highly costly, restrictive and disruptive efforts over more than twenty years have achieved their undeniably laudable goals. On the contrary, one could argue that in its key remits of economic growth, employment and reducing income disparities it has failed miserably. One could write an academic thesis on its main fractures, but this is beyond the scope of this article.

I believe that at the root of it all is a simple yet powerful force: a flawed understanding of what true empowerment is. True empowerment is having an ability to take charge of your own destiny and make a meaningful contribution to your social and economic environment. It is not simply about owning, but about doing. Yet, we have seen the primary thrust of our empowerment approach focus on ownership. We see it in the large allocation of wealth through BEE to a favoured few; the facile approach to land transformation by simply changing ownership titles and the appalling state of real developmental efforts such as education and training -- the basis of empowerment.

It explains Trade and Industry Minister, Rob Davies misgivings about Employee Share Ownership Programmes. This was further brought home to me in a response to my article on the issue where a clearly informed reader emphasised that these schemes were about “financial empowerment” and not about employee involvement in the destiny of the company. I stand corrected. I clearly fell for the ESOP spin that argued that it was the prime aim of these schemes.

In a world obsessed with possession it may sound counter-intuitive to argue that possession on its own does not represent power. Ownership that exists purely for self-gain and self-gratification becomes barren as an economic factor, especially so when they are productive assets. Responsible major shareholders know this. And private owners of small and medium enterprises even more so.

The ownership-equals-power assumption rests on a shallow understanding of power itself. Authentic and legitimate power is earned by its contribution to others. When it does not do that it is simply control, which relies either on seduction or coercion.

There are a number of reasons why ownership and possession have become paramount in empowerment thinking.


The right to private ownership is a key tenet of free market philosophy. While private ownership has proved its value in economic history, in the past number of decades there has been a marked shift to ownership becoming an end in itself, existing more for self-gratification and the benefit of owners than for the contribution it can make to others. This is a very seductive message for those seeking instant empowerment, and ironically the anti-capitalist argument has adopted this perversion by championing a transfer of assets either directly to private hands among the broad populace or to government. The problems with the latter are well known, particularly when it is inefficient, inward looking and not customer focussed.

Asset inflation

Massive levels of global debt and monetary stimulation may not have led to consumer price inflation, but they have led to asset inflation. This has deviated money from consumer demand and expansion of productive capacity. It has become far easier to make money passively through speculative investment than to work for it or becoming involved in productive enterprises, in turn impeding the empowerment of many through employment.


It is becoming all too clear that far from encouraging employment, technology is starting to replace many jobs (see article here) and even threatening middle class jobs, an essential rung in economic advancement (see Moneyweb article here). Where technology encourages employment, entry levels require much higher skills and have raised the barrier for empowering large numbers of unemployed.

Socio-economic theory

There has been a popular interpretation among human resource practitioners of Maslow’s hierarchy of needs that assumes that each step from the physiological to self-actualisation have to be met before advancing to the other. It’s a convenient assumption for governments in expanding control and discouraging individuals from empowering themselves. The assumption that one cannot be or even feel empowered in poor circumstances is contradicted by psychology doyen, Viktor Frankl’s work Man’s Search for Meaning.

Commoditisation of labour

The essence of empowerment is in having a sense of purpose beyond simply “earning a living”. We have largely lost that in the workplace, a vacuum that most try to fill by wanting more either in pay or possessions. It is a key to understanding why most ESOP’s fail to harness support for a common externally focussed purpose and encouraging involvement.

Our approach to empowerment is missing a critical point. Empowerment is for the most part a self-defined, self-help and self-developed state which clearly will be encouraged by education, employment and entrepreneurship, and creating the appropriate circumstances and opportunities. Empowerment comes from having something meaningful to do which in turn comes from individual aspirations.

Far from encouraging this spirit, current efforts are most likely doing the opposite. For empowerment will never come from simply transferring assets and ownership, nor from handouts and dependence on others.

It is the old story of being given a fish or learning how to fish. Of course, then there is access to fishing waters and having a rod. But above all, there is the need for wanting to fish.

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