BNC#8 - Piet le Roux on SA’s Transformationism: How ideology is threatening business, society and the future

Piet le Roux delivers a fiery critique of South Africa’s transformation agenda, warning it is fueling economic decline, state failure, and social division. Drawing on legal victories and frontline experience, he urges businesses to resist harmful policies and “state-proof” themselves. His message is stark: without decisive action, South Africa risks sacrificing both its prosperity and long-term future..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.Read Piet le Roux's full keynote speech below.Ladies and GentlemenFor three decades now, a fatal idea has spread throughout society and the business community in South Africa.But it has spread insidiously, posing as noble and ethical. So much so, in fact, that this idea has not only been warmly embraced and promoted by many in the business community, but even lauded and boasted about in well-intentioned board rooms across the country.This idea is not just an idea, but an ideology - an entire framework of organising political and economic life. And as this ideology spreads throughout the state departments, businesses, and social institutions of society, it begins to suffocate and destroy all in its path.This ideology is transformationism - the guiding framework for state policy in South Africa.Emerging from the Apartheid era, transformation was (and still is) relentlessly promoted as the unquestionable Good for South Africa and its people, embraced by many wanting the best for the country and its communities.But intentions cannot forever trump hard realities. And the reality is that transformationism is indeed a fatal pursuit.Transformationism is the deep ideological commitment to remaking every part of society - including businesses - in the image of the state. Every business, school, club, church, association, and suburb, and the ownership of all assets and receipt of all income must - according to this ideology - eventually be in perfect proportion to the demographics of the entirety of South Africa.Transformation, ladies and gentlemen, is fundamentally totalitarian. Under this totalitarian framework, Capital is devoured - evident in decayed infrastructure from rail to ports to public utilities to collapsed towns and even cities.Economic progress is throttled, evident in chronically stagnant GDP and relentlessly expanding joblessness. Productive people and financial capital are driven from these shores, evident in the million or two mostly Westerners that left the country, and also the JSE’s structural contraction, with listings today at a historic low of just over 200 from its high of around 750.Discussing the transformationist programme and its catastrophic effects today is much easier than it was even just five or ten years ago. Until fairly recently, the ideology of transformationism was surrounded by a high-voltage electric fence of political correctness. But its harmful results have become too obvious to deny, its architects too forthright in their extremism, and its targeting primarily of the Western subsection of the population too brazen for good people to remain silent and inactive. It is no longer so clear that these policies have noble motives, for nobility of motive would long ago have led to a change of course.DisplacementThe essential principle of transformationism is displacement.White people, and to a lesser but still significant degree other minority groups, are targeted for displacement. White shareholders are to be displaced from ownership. Employees from jobs. Children from schools and sports teams. Farmers from land.The state is not too fussed about where the displaced go. If they leave the country, so be it. The constant waves of skilled emigration have never been seriously lamented by ANC-dominated governments. If they move to build new businesses, these businesses simply become new targets for further rounds of displacement.In the business world, transformationism today is embodied chiefly by two policies: The first is Black Economic Empowerment, or BEE, a programme of race-restrictive ownership and company control, mixed with race-restrictive training, supply chain management, and charitable company spending.The second is Employment Equity, an extreme programme for down-to-the-decimal race-restrictive hiring that only the most hardened ideologues could conceive of.Together, these constitute a deliberate and systematic programme of Targeted Domestic Sanctions.Targeted because they are specifically aimed at white people (and sometimes other minorities).Domestic because these measures are aimed at people inside the country - who live here, call it home, contribute, employ, build and invest here.And Sanctions, because they aim to punish - to dispossess and displace by imposing extreme costs and restrictions upon those targeted.And these targeted attacks are intensifying.Today, even with the failures of transformationism so visible at every corner, its proponents are doubling down. The President of South Africa professes in Parliament that BEE has no negative effect on economic growth. The Minister of Trade, Industry and Competition is launching a so-called transformation fund redirecting billions from private sector businesses - and the whiter the businesses, the higher their required tributes must be. Not to speak of how his department has weaponised competition law to create a choke-point for resource extraction. The Employment Equity Act’s quota system is in its first year of implementation. And around every corner, public officials, politicians, and lobby groups are working to expand business licensing requirements to more and more industries, and then tie those licenses to BEE compliance - consider aviation, financial services, irrigation, agricultural and other imports and exports, property practitioners - I could go on. The goal, ladies and gentlemen, is to make transformationism compulsory for all economic activity.With focused litigation, Sakeliga has successfully contained, prevented, or delayed some of these, but we have not yet turned the tide.Great HarmA South Africa that deliberately or implicitly harms and displaces some of its most productive communities cannot possibly hope to succeed.Indeed, transformationism is the very embodiment of an unsustainable South Africa.If we do not stop, reverse, and ultimately break the hold of transformationist ideology, not only do the Western groups and perhaps other productive minorities in South Africa face an existential threat, but the entire country, and indeed the entire continent anchored by South Africa’s economic sophistication, faces a structural and terrible economic collapse.State failure will compound and spread, creating vacuums of authority that invite further rounds of harmful predation by state and non-state actors.Productive people - white, black, coloured, and Indian - will leave.Ironically, and rather tragically, it will be possible for some of us - even some of you here today - to make very good money in all this chaos. Decline, de-development, and even collapse present the sorts of opportunities that tough, intrepid entrepreneurs - of which we thankfully still have a good supply - know how to capitalise upon to make money on the way down.But to what ultimate good is this if we’re left with a country our children and grandchildren no longer can or want to live in? If we have to leave the place we love?Countering the threat: StateproofingClearly, transformationism is an existential threat bearing both on individual businesses and owners, as well as the business environment. How do we counter it?One theory of change is voting every several years in national and local elections. Historically speaking, this theory of change - as now applied at the level of millions of people, rather than a few thousand in a Greek polis - is a very recent phenomenon. The results are mixed: in some places, mass democracy seems to be supporting the flourishing of communities and societies, but in others, whole countries have collapsed with very democratic, but also very corrupt, vindictive, and foolish governments. Among us today, there are those who will apply their best possible efforts within the framework of the voting-based theory of change. They should continue to do so and where appropriate they deserve support. But clearly, more is required.Consider the exasperation of the ANC Member of the Executive Council for North West Province dealing with local government failure. Mr Oageng Molapisi said last year that the national government should “bring the team, bring the resources, bring everybody” to restore order in Ditsobotla. “Voters would continue to give you the same outcome, [so disbanding the municipal council] is not an option. Intervention [by the National Executive is] the last resort,” he said in his 6 August statement.The MEC realised that Lichtenberg was not voting their way out of this.Therefore, while those best suited to apply the theory of mass democracy for countering transformation as a theory of change should do their best, we need an alternative tailored to those outside the state apparatus, in particular businesses. This alternative strategy is called stateproofing. Stateproofing can be applied at two levels. The first is in the private sphere. The second is in the public or community sphere.Since individual circumstances differ, for stateproofing private concerns I can only offer guidelines, to be applied by you according to your own best judgment. Here are two:Off-ramping: Securing private alternatives to supposed public utilities formerly provided by the state, e.g. electricity, water, refuse, security, etc. MAN-up: Maximum achievable non-co-operation with that which is harmful and unethicalGood people have sometimes suggested that business people are too quiet in the face of harmful public policy and state failure, and that they should speak up much louder. And so to some it might be a curious absence that I do not include this as part of my guidelines. The reason is that this is not inherently part of stateproofing. While it could be admirable for business people to individually take on politically sensitive topics in public, there is also the practical and very real downside that they might endanger their businesses and everyone that relies on them, including employees, shareholders, suppliers, and customers. In most circumstances, directly exposing individual businesses to state ire is perhaps even the opposite of stateproofing, and should normally be undertaken only after careful consideration and as part of a larger and bigger plan. For example, during the 1980s American businesses seeking to signal opposition to the National Party’s apartheid policies publicly subscribed to an alternative set of ethical commitments called the Sullivan Principles. There may well arise a time in the not too distant future when such collective speaking up can again identify ethically distinct businesses that publicly signal their opposition to the transformationist programme – perhaps something to consider. The second level of stateproofing is public - or more accurately as pertaining to the shared or common domains.It is all good and well to stateproof yourself, but that doesn’t scale very well. More importantly, stateproofing only private domains does not address that problem of harmful or failing public authority responsible for a failing business environment. As the American sociologist Robert Nisbet explained shortly after the second world war in the Quest for Community, balancing power in society requires more than brave individuals operating in isolation. It requires independent institutions and self-regulating associations that pool resources and accumulate the strength in numbers to provide real checks and balances on state power in the public interest and for the flourishing of society. This type of organising is every bit as necessary among business communities as it is in other areas of civil society.Without stateproofing our existing (and new) common good institutions, and where necessary establishing them as dedicated and mission-driven vehicles, no degree of private stateproofing will prevent us from ultimately ending up with - at best - lots of money in a place we can no longer call home, and where the voices of our grandchildren, and those that would have come long after them will never be heard.I offer three guidelines for stateproofing our shared domains to address common threats arising from state failure, its targeted attacks, and the vacuums of order these produce: If you are an institution, follow a two fold-strategy of checking harmful state action and its abuse of power where possible (e.g. litigation and public pressure), while setting up alternative structures for governance, order, and security wherever the vacuum left by state-failure invites it.If you are a private concern, funding: Find dedicated, mission-driven vehicles for public problems, and fund them.Build such institutions: Sakeliga is one of several institutions doing good and effective work. But the truth is, state failure is exposing so many areas of life to chaos and disorder. Perhaps it is your task to build the new institutions that will be up to the task of restoring order and stability in these uncertain times.ConclusionLadies and gentlemen, Stateproofing is the appropriate strategy for businesses willing to fulfil their deepest social obligation: restoring economic order in service of flourishing communities and societies.We will face opposition. We will face allegations that we are pursuing injustice. But we must forge ahead, for both the white communities explicitly targeted under the current race-restrictive programme and for the other communities in the region not explicitly targeted but who will be massively prejudiced by the spillover harms of targeting white businesses. There is no sustainable South Africa under transformationism. For businesspeople today, the duty is the same as it would be in any other place and time in history when the dominant political structure fails to produce a favourable business environment or actively undermines it: it is our duty to stateproof our businesses, and to stateproof the economic order which enables us to survive and thrive.

BNC#8 - Piet le Roux on SA’s Transformationism: How ideology is threatening business, society and the future

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