Fixing SA: ‘Economic justice’ mindset can help us all – serial entrepreneur Patrick Kuwana

The key to economic justice in one of the world’s most unequal societies is a counter-intutive mindset of abundance, argues C3 Capital founder and CEO Patrick Kuwana. For too long, South Africans have been held hostage by a self-limiting mindset of scarcity that, ironically, fuels the very competition and scramble for resources it so fears. To achieve the stubbornly elusive objective goal of economic justice, South Africa must strive to multiply, and not divide, its resources. The quest for abundancy, Kuwana says, equally demands an honest conversation about justice and privilege. – Derek Alberts

How ‘economic justice’ multiplies resources – and achieves true sustainability

By Patrick Kuwana* 

The need for a new approach to business

The Covid-19 pandemic has again revealed the fragility of the global economy (the cracks have been showing through successive financial crises, especially since 2008). For us here in South Africa, the impact of the lockdown and emergence of politically connected Covidpreneurs has exposed how the culture of greed and corruption focused on individual accumulation (rather than serving to build inclusive prosperity) is the number one challenge we face. The challenge is further compounded by the government-led looting that is stealing resources from an already ailing economy that is in desperate need for policy framework and strategy that will bring about a conducive environment for mutual wealth creation rather than aspiring for equal wealth distribution.

The reality is that a nation’s economy cannot grow if resources firstly are being stolen by the very people who are supposed to serve the beneficiaries of the economy (the people). Secondly it can’t grow if resources are forcibly taken from one group and given to another. Likewise, a nation’s economy cannot grow if a large section of the population does not have access to resources and thus cannot participate. We need a new approach to government policy and within the private sector that does not feed the consumption habits of a few elite – an approach that values and incorporates equality, inclusivity and justice in ways that will drive economic growth rapidly and sustainably.

The role of justice in business

Justice is critical for business to be sustainable. Broadly speaking, there are four different types of justice: distributive (determining who gets what), procedural (determining how fairly people are treated), retributive (based on punishment for wrong-doing) and restorative (which tries to restore relationships to ‘rightness’). Retributive justice will always divide resources and erode overall economic value, but we definitely have to intentionally incorporate distributive and procedural justice into South Africa’s economic roadmap by considering every transaction in terms of: “How do correct what needs to be corrected by creating mutual value and mutual benefit through this transaction, instead of extracting value from someone for the benefit of someone else?”

Whenever a transaction brings in an element of disadvantage to another individual or community, it means that that transaction has caused (or sanctioned) an injustice. And this ultimately becomes unsustainable – eventually the pendulum of injustice will swing so far, that something in the socio-economic system will break. Justice in business is all about how we create mutual value that will enable the pendulum to remain stable – so that everyone can bring their value to the table, and be rightly rewarded for the value they bring.

Shifting from a scarcity mindset to an abundance mindset

We sadly operate within a deal making worldview that typically approves the extraction of value for personal or shareholders’ benefit at the expense of those on the other side of the transaction. Sustainability is only achieved when profit is pursued but when the golden principles of “people are more valuable than money and relationships are more valuable than transactions” are never broken.

Read also: The Green March is accelerating – case for a circular economy

As South Africans we need to shift from a mindset of scarcity (there isn’t enough for everyone so I have to take what I can get) to a mindset of abundance (there is more than enough for everyone). At first glance this may seem counter-intuitive. But the irony is that the abundance mindset encourages co-creating and the multiplying of resources so that there is no lack, while the scarcity mindset encourages the very competition and scarcity that it fears. We need to start running our businesses and economies based on the fundamental foundation of multiplication rather than division. We need to change the typical business approach from hoarding resources, to harnessing the vast human, natural and financial resources that are available.

Recognising injustices past and present

In South Africa, we have done so much damage to one another over many generations through economic injustice and exclusion and this has caused our economic pendulum to swing unsustainably to one side. And so we have to first bring our pendulum back to some kind of equilibrium before we can move forward. Sadly, some seem to thinking that this pendulum can be brought to equilibrium by stealing, but we have to be very clear – stealing is one sure way to make everything collapse for everyone.

Unfortunately, our pendulum is racially-charged, and we need courage and honesty on both sides. We need to recognise the legitimate hurt of those who were deprived of opportunities to equally participate in the economy through a system of institutionalised racism. We also have to recognise the legitimate fears of those who benefited from the system, but who were not directly involved in it. Apartheid ended 25 years’ ago, but the process of bringing the pendulum back to equilibrium is emotionally-charged on both sides. As business leaders we have to engage in the difficult conversations necessary to make this happen. Not to defend ourselves, or accuse the other, but to step into each other’s shoes and take constructive steps forward. Let’s not wait for government on this one, least the economy is so ruined that there is nothing to talk about. The most important thing that we can do as business leaders to contribute to the future of our children and grandchildren is to take this discussion out of hands of government and run with this ourselves.

Justice and an inclusive economy

What South Africa desperately needs, is for people from different backgrounds to get together, and to formulate a common vision for the future – not an individual vision for one group. We need to focus on multiplying rather than dividing our resources. Unfortunately, so much of black economic empowerment has been implemented according to division-based principles (how do we take away over here, to give over there), which has caused many in business to feel: “I have lost while you have gained.”

Read also: Cofesa: ‘Please scrap EE race quotas – here’s how this will boost the economy’

Again, whenever a transaction brings disadvantage to another individual or community, it means that that transaction has created an injustice. And as I put forward a few years ago in the article Why robbing Pieter to feed Sizwe will not work, if our deal making culture continues to extract value from someone for the benefit of someone else, true socio-economic sustainability will continue to elude us.

The reality is that the more productive the resources in your business are, the more economic value you can create. Our aim as business leaders is to enable our people and all our other assets to be as productive as possible. So if we look at South Africa in the same terms, we need to recognise that our nation should have as many people as possible, as productive as possible. We need to approach equality and inclusivity from a mindset of abundance – a mindset that enables the stereotypical ‘Pieters and Sizwes’ to collaborate. Not because of any legislative pressure, but by mutual consent and for mutual benefit.

Embracing justice to unlock prosperity

Can we as business leaders recognise the ideas, skills and resources that others have, combine that with the ideas, skills and resources that we have, and start co-creating wealth?

Can we approach our day-to-day operations with the emphasis on creating mutual value for mutual benefit, rather than trying to extract value for ourselves at the expense of others?

Can we create a work environment where every employee can generate economic value by being highly productive, and thereby unlock prosperity for themselves and their community?

In other words, can we embrace justice as an organisational value, and see how fair economic participation and reward in business (distributive and procedural justice) over time naturally leads to reconciliation in relationships (restorative justice) in the wider social landscape?

When our mindset shifts from one of competition (that creates scarcity), to one of co-creation (that releases abundance) we will experience just how powerful justice can be – in multiplying resources and achieving true socio-economic sustainability. When we can all bring what we have, we can build a new future for our children’s children.

I will be addressing this topic in more detail at the 6th annual In Good Company conference –

  • After a successful corporate career in the IT industry, Patrick Kuwana became a serial entrepreneur – co-founding several businesses, and being involved in numerous business incubators and accelerators in Africa and Asia. He is the founder and CEO of C3 Capital, a private equity firm that combines financial capital with a unique business growth blueprint. Their vision is to build local businesses that will positively impact the quality of life of Africa’s current generation and build sustainable prosperity for future generations.
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