Picture: Siphiwe Sibeko/REUTERS – The DA constitution says that if it were the governing party, it will ensure “the progressive realisation of access to social security (housing, health services) for all people who are unable to help themselves”. Social security is seen as a fall- back minimalist safety net which is very different to the social democratic idea of social security being a permanent corrective of social and economic functioning, the writer says.
By Isobel Frye
Classic liberalism was forged by people seeking freedom from the shackles of capricious absolute monarchies that could confiscate property and life on a whim. Liberalism has been distilled over time into a concept of negative freedoms. With the twin pillars of freedom from negative intrusive actions by government and equality of opportunity, true liberalism elevates the individual.
Just how useful is this political philosophy in South Africa today, a country in which the ravages of the past continue to determine today’s realities and tomorrow’s possibilities for everybody, the privileged and the dispossessed.
In an ideal liberal country, the role of the state is reduced as much as possible to those big matters that cannot be solved by the intrepid pioneer and his rifle alone against the world. Where social democrats recognise the need for an interventionist state to correct and compensate for the shortcomings of the market on people’s lives, for liberals an unfettered free market is the critical institution.
According to Milton Friedman, one of the best-known fathers of modern neo-liberalism, the only role for private corporations is to make profits. Companies should not be expected to be subject to moral concerns about the well-being of people or the financing of an interventionist government. Profits over people. In true liberal theory, provisions for income security should be left to the individual. Rational choices should be made during a breadwinner’s life to balance spending today and saving for tomorrow.
According to nineteenth century libertarian Alexis de Tocqueville, welfare should be left entirely to the private domain because the giving of assistance creates a ‘moral tie’ between the giver and the recipient which is wiped out when the state intervenes as neutral tax collector and benefit distributor.
The major weakness in applying this theoretical framework to South Africa is the absolute absence of any recognition of then gross inequalities of today born by the obscene policies and actions of the past. How does equality of opportunity work where inter-generational white privilege has been built on the expropriation and extraction of black wealth and labour?
Of course, social security policy is not about atonement for the sins of the father. However the human rights approach to universal social security theory is premised on the need for a benign system to ensure that nobody’s welfare is left entirely up to them, partly because a society is as strong as its weakest, poorest and most destitute person.
The South African Constitution gives a universal guarantee to social security, and social grants for those who cannot provide for themselves. The main actor is the state, not private charities.
What do the DA social security policies offer?
Socio-economic rights are called second generation rights. First generation rights are those that fit more comfortably with the ‘negative freedoms’ of classical liberalism, such as the freedom from arbitrary arrest or torture or the deprivation of any other civil liberties. Second generation rights however create a positive duty on the state to provide something. Not only is the state required in Section 7(2) of the Constitution to ‘respect’ and ‘protect’ people’s rights, but it is equally obliged to ‘promote’ and ‘fulfil’ these rights.
The DA constitution provides a very different version of these guarantees. It says that should the DA become the governing party, it will ensure “the progressive realisation of access to (housing, health services and) social security for all people who are unable to help themselves”. Social security is seen as a fall- back minimalist safety net which is very different to the social democratic idea of social security being a permanent corrective of social and economic functioning.
The DA policy document Building A Resilient Society Social Development Policy sets out greater detail about particular programmes.
The DA policy embraces the need to provide cash grants for poor children and commits to raising these to a permanent indexing to the Food Poverty Line which is currently R663 per month.
The policy also affirms the current Old Age Grant policy under which just under 4 million poor people over 60 receive R2080 per month. Their concern however is that not enough people are saving for their old age. The DA policy they suggest a much stricter mandatory retirement savings regime driven by the private sector. Their Social Development Policy document explains how traditional savings funds like stokvels should migrate their monies to the private sector to fall in line with this.
But while this might be good for the private sector, it is not so good for scheme members. Some of the private funds currently charge fees of up to 2,5% for fund administration. If this was reduced to even 0,5%, members’ income replacement rates at retirement could increase by up to 60%.
The DA is concerned that people are choosing not to save during their working lives. South Africa is a country in which 43% of working age people are not employed. Social grants are the primary source of income for almost the same number of households as wage income, and wage inequality is the greatest driver of income inequality in South Africa. Any policy regime built on the assumption of salaried contributions will repeat the current patterns of privilege and exclusion to a very unsustainable end.
And lastly, on the popular idea of a universal basic income grant, what does the DA say?
Having traversed the arguments for and against a BIG in South Africa in a very progressive manner, the DA’s position is that a Basic Income Grant for the unemployed as part of a minimalist social protection floor would be great in theory. However, the idea is then immediately dismissed. The document says that such a policy would not be possible without raising taxes, unless the introduction of a minimalist unemployment grant could go hand in hand with cutting other state spending on social services.
The devil is indeed in the detail. To cut social services to fund an unemployment grant means that the poor will have to pay for the poor. Tax – financing of social security schemes builds in a redistributive element. In South Africa, the most unequal country in the world, the idea presented here is that taxes cannot be raised, but instead Peter must be robbed to pay Paul.
The 1776 American Declaration of Independence espoused some of the key liberal and libertarian ideas, including the belief in “unalienable rights” of the individual to “life, liberty, and the pursuit of happiness”. Linked to this was a belief that citizens have both a right and a duty to “throw off such government” that fails to guarantee these rights.
This brings us to the next opportunity in South Africa for a peaceful change of government, the 2024 elections. In South Africa’s current realities, how far do these policies go to guarantee the inalienable right of each person to life, liberty and happiness?
Isobel Frye is Executive Director of the Social Policy Initiative
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