Affirmative action: Who wins?

The most athletically challenged club golfers have as much chance as anybody else of winning a competition. They are given a large enough handicap, or upfront allowance, to make it possible for them to catch up with all in the field.

Perhaps our affirmative action programmes could be assisted, the playing fields levelled so to speak, by applying an objective handicapping system. Every black participant in the economy could be given an upfront number of points to assist in employment or business, while every white male could be regarded as the equivalent of the scratch golfer.

In case anybody should think this unlikely or impracticable, a start on these lines has already been made. The State Tender Board and Procurement Agencies are already practising an affirmative action points system for awarding tenders or contracts. The blacker the firm, the higher the place in the queue for work.

Naturally there will be problems to be solved. A firm with a white principal partner, that employs only blacks, scores badly compared to the firm with only black partners that contracts out all its work.

The blackness of a firm, and therefore its entitlement, could be much more accurately calculated if we could apply some suitably weighted average of the upfronts for all its employees, suppliers, and owners. The precise weighting for each could be a subject of intense debate.

A labour-intensive firm might receive more credit, while a service organisation would have to depend more on the upfronts of the firms that supplied it. The upfront for each shareholder would have to be divided by their share of the firm. It would not be good enough to have a large number of black shareholders, each with a minor share. The formula to be applied in determining the upfront number for each individual as worker or owner will be critical.

Nothing, surely, could be more important than establishing a transparent and objective basis for assisting the previously disadvantaged and marginalised. If we are to award affirmative action points at all we should be sure to do it right. The more disadvantaged, the bigger the allowance.

Therefore the handicapping commission would regard it as unacceptably crude to simply give a 100 upfront to every black and a 0 for each white. Clearly, the economic disadvantages of apartheid, as opposed to the psychic damage caused, did not apply equally to the disadvantaged African, coloured or Asian.

Some individuals and groups were more economically disadvantaged than others. It could be argued that Indians, with 40,4% of the per capita incomes of whites, compared to blacks with only 8,5%, should receive an upfront of 21 (8,5/40,4)100. Similarly coloureds, with average incomes only 19,6% of whites, would be entitled to an upfront of 44.

But what, it will be asked, about women? An extra weight for all women of 20% – something like the average gender wage gap – might be thought appropriate. Then the black woman would start with 120 and her white sister 20.

Allowing for foreign nationality will be a vexed question. Are foreign-born blacks to be counted as South Africans? Are "blacks" from the US, China or India to be given the same upfront as blacks from SA, Lesotho or Mozambique?

People of all colours are advantaged or disadvantaged by education and the wealth of their parents. Surely the son of a black township tycoon, or of a former homeland diplomat who, from preschool to postgraduate study, had the advantage of the best education money can buy, cannot fairly claim further advantages. Such rare individuals should lose all or much of the upfront for colour.

It is comparatively easy to measure educational attainments and reduce the upfront consistently. Clearly quality as well as quantity of education would have to be factored in. Points could perhaps be deducted for anything more than a DET matric and more than R200 000 worth of family wealth.

The chances of applying such a logical and objective approach to affirmative action programmes are remote. It will most likely remain a simple black and white issue. All blacks, whatever their economic history and educational achievements, will be given the equivalent of an upfront of 100 and all whites zero, with Asians and coloureds in practice falling roughly between.

This is because affirmative action or unequal opportunity programmes have little to do with making up for the past. They are examples of special interest politics. Their intention is to serve the interests of blacks with professional skills, educational attainments and, often, also wealth. They would not want the important differences between them and the overwhelming majority of blacks emphasised.

Yet the intended beneficiaries have, in large measure and to their enormous credit, overcome the huge challenge of apartheid. By dint of exceptional abilities, energies and perseverance, they have beaten the system that held back so many others. As such they are surely capable of competing successfully in the marketplace with all comers.

It is the genuinely disadvantaged, those many blacks without much skill, education or income, who will be forced to pay for these extra affirmative action benefits. They will be required to pay more for goods and services, including housing, and receive lower wages, because there will be less open and intense competition for their custom or labour.

Affirmative action, that is unequal opportunity, will remain a feature of SA life and a tax on the poor. The best we can hope to do is deny it the moral high ground and reveal who is winning and losing in the process.

(This Briefing Paper was written by Brian Kantor,professor of economics at the University of Cape Town.It was first published in the Financial Mail 22 March 1996)

Help FMF promote the rule of law, personal liberty, and economic freedom become an individual member / donor HERE ... become a corporate member / donor HERE