During the state of the nation address, President Jacob Zuma made this statement: “Only 10% of the top 100 companies on the Johannesburg Stock Exchange are owned by black South Africans, directly achieved principally through the black empowerment (BEE) codes, according to the National Empowerment Fund.”
This issue is something of a perennial debate, and this is not the first time he has mentioned this statistic; he did so in his 2015 address when he put the level at 3%, sparking a national debate.
Subsequent to that, the JSE compiled independent research on the topic, which was published, and that mentioned this 10% number, forcing the fund to treble its figure, which then, in turn, forced Zuma to treble his.
But one of the things I have discovered – and I am not the first person in history to come to this conclusion – is that when it comes to politicians, it is important to notice not only what is said but what is not said.
What Zuma did not do was mention the rest of the statistics.
The JSE’s research found essentially that black direct ownership was 10% as a result of the BEE transactions and roughly 13% via “managed funds”, mainly pension funds, totalling 23%.
White South Africans own a little less, about 22%, and foreigners the rest.
It also found that black ownership was increasing at about a percentage point a year.
It must be said these numbers are estimates.
The research firm was basing its numbers on 2011 totals, and since pension and investment funds do not specifically require investors to state their race, it is all a bit imponderable.
However, my sense is that economists would generally accept that these numbers sound broadly credible.
The statistics, of course, should not be read as evidence that racial inequality does not exist – SA’s benighted history is obviously responsible for that – but they do show dramatic underlying changes.
Two other things irk me about the president’s statement.
The first is the exact phrasing.
Notice how he nods at the fact that there might be a broader debate out there, since he is careful to include the word “directly”.
It suggests he, or at least the fund, is aware that there is an “indirect” aspect to all of it.
But that is not mentioned.
My second irritation is about the interpretation.
He could quite easily have said: isn’t this all fabulous – for the first time, blacks own more of the JSE than whites.
It demonstrates, he could have said, the changing nature of the South African economy, and how the economy is naturally evolving to reflect its true multiracial nature.
This is indeed a day to celebrate.
Instead, he reaches for his inner Donald Trump, citing statistics in an intellectually dishonest way to support an ideology of “us” and “them”.
The problem is not him, or his administration, or his own ideology.
The problem is with the fiction of “white monopoly capital”.
This requires not changing the approach but doubling down on the existing approach.
Rather like Trump, he is trying to generate, and simultaneously feed off, an elemental struggle between grand, supranatural forces.
It is like Star Wars for modern politics; somewhere out there are breathy monsters that control everything with an iron fist – but some resisters are fighting a brave rearguard action in the name of good.
In that vision, reality does not matter and statistics are valuable only to the extent that they can be manipulated.
So, obviously, this is effective politics. It is the default option of the extremes of the left and the right wings.
And like all good propaganda there has to be an element of truth to their arguments, otherwise the falsity can’t gain traction.
In SA, there is more than just some truth to the argument. The fund argues, for example, that “indirect” ownership is not really significant, since it does not involve control over cash flows and other immediate tools of corporate control.
There is something to this, but you would expect an institution rooted in facilitating change in control to make this argument.
The root question is not about the necessity for change, but the methodology and rate of change. Is our society changing fast enough, and what are the levers that create that change faster?
My feeling is that SA is changing in significant ways, and it is important to recognise those changes when they happen.
I don’t think it is changing fast enough, and here is where I differ from Zuma.
I think his notion of a cataclysmic battle between “them” and “us” is retarding rather than advancing that change, and the most obvious evidence for that is the huge difference between the economic performance during the Zuma years compared to the pre-Zuma years.
Zuma’s biggest problem in pinning the responsibility for the economic underperformance of his government on the “them” is that his party has been in power for 22 years.
Each fanciful criticism of the lack of change in SA that he misconstrues can elicit the response, “But you have been in power for more than two decades; why didn’t you do something about it?”
It is almost as though all of his emotive criticisms come round and bite him in the buttocks.
They sound like an evasion of responsibility. Which is, of course, what they are.
Tim Cohen is the editor of Business Day
Zuma’s Trumpesque misuse of statistics
This issue is something of a perennial debate, and this is not the first time he has mentioned this statistic; he did so in his 2015 address when he put the level at 3%, sparking a national debate.
Subsequent to that, the JSE compiled independent research on the topic, which was published, and that mentioned this 10% number, forcing the fund to treble its figure, which then, in turn, forced Zuma to treble his.
But one of the things I have discovered – and I am not the first person in history to come to this conclusion – is that when it comes to politicians, it is important to notice not only what is said but what is not said.
What Zuma did not do was mention the rest of the statistics.
The JSE’s research found essentially that black direct ownership was 10% as a result of the BEE transactions and roughly 13% via “managed funds”, mainly pension funds, totalling 23%.
White South Africans own a little less, about 22%, and foreigners the rest.
It also found that black ownership was increasing at about a percentage point a year.
It must be said these numbers are estimates.
The research firm was basing its numbers on 2011 totals, and since pension and investment funds do not specifically require investors to state their race, it is all a bit imponderable.
However, my sense is that economists would generally accept that these numbers sound broadly credible.
The statistics, of course, should not be read as evidence that racial inequality does not exist – SA’s benighted history is obviously responsible for that – but they do show dramatic underlying changes.
Two other things irk me about the president’s statement.
The first is the exact phrasing.
Notice how he nods at the fact that there might be a broader debate out there, since he is careful to include the word “directly”.
It suggests he, or at least the fund, is aware that there is an “indirect” aspect to all of it.
But that is not mentioned.
My second irritation is about the interpretation.
He could quite easily have said: isn’t this all fabulous – for the first time, blacks own more of the JSE than whites.
It demonstrates, he could have said, the changing nature of the South African economy, and how the economy is naturally evolving to reflect its true multiracial nature.
This is indeed a day to celebrate.
Instead, he reaches for his inner Donald Trump, citing statistics in an intellectually dishonest way to support an ideology of “us” and “them”.
The problem is not him, or his administration, or his own ideology.
The problem is with the fiction of “white monopoly capital”.
This requires not changing the approach but doubling down on the existing approach.
Rather like Trump, he is trying to generate, and simultaneously feed off, an elemental struggle between grand, supranatural forces.
It is like Star Wars for modern politics; somewhere out there are breathy monsters that control everything with an iron fist – but some resisters are fighting a brave rearguard action in the name of good.
In that vision, reality does not matter and statistics are valuable only to the extent that they can be manipulated.
So, obviously, this is effective politics. It is the default option of the extremes of the left and the right wings.
And like all good propaganda there has to be an element of truth to their arguments, otherwise the falsity can’t gain traction.
In SA, there is more than just some truth to the argument. The fund argues, for example, that “indirect” ownership is not really significant, since it does not involve control over cash flows and other immediate tools of corporate control.
There is something to this, but you would expect an institution rooted in facilitating change in control to make this argument.
The root question is not about the necessity for change, but the methodology and rate of change. Is our society changing fast enough, and what are the levers that create that change faster?
My feeling is that SA is changing in significant ways, and it is important to recognise those changes when they happen.
I don’t think it is changing fast enough, and here is where I differ from Zuma.
I think his notion of a cataclysmic battle between “them” and “us” is retarding rather than advancing that change, and the most obvious evidence for that is the huge difference between the economic performance during the Zuma years compared to the pre-Zuma years.
Zuma’s biggest problem in pinning the responsibility for the economic underperformance of his government on the “them” is that his party has been in power for 22 years.
Each fanciful criticism of the lack of change in SA that he misconstrues can elicit the response, “But you have been in power for more than two decades; why didn’t you do something about it?”
It is almost as though all of his emotive criticisms come round and bite him in the buttocks.
They sound like an evasion of responsibility. Which is, of course, what they are.
Tim Cohen is the editor of Business Day
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