Patel's image as a revolutionary softens
October 23, 2009
 By Terry Bell
Prejudice and wishful thinking often drive perceptions of reality promoted by interest groups. Unfortunately, perceptions, even when out of step with reality, are acted on or, at best, cause confusion.
A classic case is the perception of Economic Development Minister Ebrahim Patel promoted by the Cosatu leadership, on the one hand, and much of the pro-business lobby on the other. It was a shared perception, lauded by one side, loathed by the other, of Patel as a radical revolutionary bent on destroying the capitalist system.
But Patel has received accolades from both sides of the economic divide. This has caused confusion within the labour movement. The confusion about Patel is understandable as he is hailed by the Cosatu leadership in a way that implies he is part of a drive to socialist change. At the same time, his rejection of tariffs to protect the garment industry and his promotion of a social economy has been praised by business.
There is nothing new in this, and Patel has been consistent in views and approach over recent years that have not been particularly radical. As such, he has been no more an instrument of those advocating revolutionary socialist transformation than he has been a bosses' lackey.
They point to the role he played in pushing for the two-year import quota agreement with China. With union and some employer support, he argued that this bilateral deal, to restrict a range of Chinese imports, would provide a breathing space for local industry "to get to a point where we compete head on head".
The deal, he said, would enable better machinery, more efficient practices and a concentration on niche markets. Properly implemented and coupled with a rand devaluation, it could create up to 50 000 jobs.
But there was widespread cynicism about these claims, especially the two-year timescale for the industry to retool, as well as the fact that cut-price imports could be sourced from countries other than China. In the event, the cynics were proved right.
But in the process, the "twin-track" approach the labour movement as a whole had adopted to the Proudly South African campaign seemed to go by the board. The unions wanted the stress to be on not importing goods from countries that did not adhere to work standards at least on a par with South Africa, which contradicted Patel's call for head-on-head competition.
Cosatu's Patrick Craven noted at the time: "We support 'buy local' campaigns while arguing we should only trade with countries that apply the same standards regarding wages and conditions that we do."
The corollary is that action should be taken against manufacturers and producers in Europe and elsewhere whose governments provide subsidies that help undermine local products. This was an issue that again arose at the World Trade Organisation's Open Forum in Geneva last month.
One of the issues raised there was how dumping (overproduction) harmed weaker economies by forcing down world prices. As one senior trade union official noted this week, it was ironic that this debate occurred at the same time that China made its latest attempt to cut industrial overcapacity.
The official felt these were clear indications at a global level that the main problem confronting the economy was overcapacity. The capitalist system was thus at fault and needed to go.
This is not, apparently, a view shared by Patel. At a conference on Monday he championed the cause of co-operatives and of co-operation between governments, worker and employer organisations. These ideas form the cornerstone of what author David Bornstein calls social entrepreneurship.
In a best-selling book, Bornstein provides what is probably the best definition of this: "What business entrepreneurs are to the economy, social entrepreneurs are to social change. They are the driven, creative individuals who question the status quo, exploit new opportunities, refuse to give up, and remake the world for the better."
Social entrepreneurs are supposed to prioritise greater wellbeing for most; they bewail the move of productive enterprises to regions of lower labour cost. Yet these moves are usually made as the competitive rules of the system make them necessary.
But like Bornstein, Patel seems to argue that alternative business models in the present system are both possible and necessary; social goals should replace maximising profit "at the core of their existence".
Cosatu's Bheki Ntshalintshali agreed, but noted: "This crisis is caused by the inherent unsustainable logic of profit maximisation in the capitalist system.
"What we are experiencing is a basic crisis of capitalism, with collapsing markets and overproduction, leading to mass unemployment and cuts in living standards across the world."
He extolled the advantages of various forms of co-operative enterprise. But as cynics readily point out, these have mostly failed or been incorporated into the existing system, and competition and profit maximisation are needed for the survival of the system and a legal requirement.
Patel, and much of the labour movement, has yet to fully confront this reality.
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