Alternative to master plan is not anarchy
Note: This article is about the Department of Trade, Industry & Competition’s master plans as a concept, not about the R-CTFL Master Plan specifically.
Failing to plan is planning to fail, or so the popular expression goes. However, as is true for many of these pithy inverted expressions, to communicate by clever means does not mean you’re communicating something clever.
Since the relaunch of master plan-focused industrial policy in 2019 under the first administration of President Cyril Ramaphosa, there has been an almost complete reliance by many on such centrally managed plans to direct economic activity in a variety of sectors.
To some extent it is little wonder that these initiatives have taken on such a foundational status in the industries where they have been implemented. That is, after all, what they were designed to do.
The trade, industry & competition department describes these projects as the “centrepiece of the national vision, co-ordinated by the presidency” and goes on to say that, “[The strategy] emphasises co-creation, that is, a building and action-oriented partnership between the state, organised labour and the private sector”.
Such a description (one would think) is bound to raise questions from numerous analysts, commentators and advocates across civil society and in the media on the appropriateness of what, at least on the face of it, resembles a form of collusion between ostensibly independent (or even adversarial) parties.
In fact, it is an almost perfect encapsulation of the very practice condemned by Adam Smith in his Wealth of Nations, which has, ironically, been nearly universally misquoted by various competition regulators:
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” (Book I, Chapter X).
If the connection between the two is unclear at this point, the following section from Smith’s seminal tome should clarify matters: “It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice.
“But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”
Given that these initiatives practically necessitate an entanglement of business, labour and government, it is quite bizarre that they should be viewed as inherently “business-friendly”, “favouring private industry over government interference” or even that they promote a “free-market orientation”.
Not free-market capitalism
Such statements could scarcely be further from the truth. Call it corporatism, cronyism or even fascism, but co-opting dominant businesses from various sectors into serving political agendas, having government craft policy to support those businesses at the expense of their competitors and consumers, and undue influence whether of or by organised labour, is certainly not free-market capitalism.
However, these policies should not merely be condemned on ideological grounds. Rather they ought to be rejected, perhaps mainly because they simply do not work. In fact, as my colleague Zakhele Mthembu has shown, such plans always fail (“Freedom of choice,” February 2). And yet it does not necessarily follow that eschewing such attempts to generate co-ordinated plans implies scepticism of all forms of planning.
Frederic Bastiat, the early 19th-century French economist whose work is at home in pro-capitalist libraries, warns against confusing government with society. The upshot of which is that we often fall into the trap of thinking objections to the state’s role in a particular endeavour is tantamount to objecting to it being done at all. Bastiat explains that one may disapprove of state-mandated religion, nationalised healthcare or government-run farms without being against faith, medical care or food. The same holds true for planning.
Whereas master plans are state-led, centrally determined, one-size-fits-all attempts to dictate the behaviour of millions of individuals, the alternative is not anarchy but rather allowing a multitude of unique plans to be developed by the very firms, consumers and employees who will be most directly affected by their outcomes.
It seems only appropriate to conclude with a final pithy platitude, but one that does ring true in a world seemingly driven by co-ordinated master plans: big business loves big government, but what’s good for big business isn’t necessarily good for the market.
Or, as former US consumer journalist John Stossel has argued, “When big government colludes with big business to kill competition, we all pay the price.”
Footwear Industry Articles
- AI is putting an end to counterfeit sneakersOsmo’s AI-powered scent authentication machine in action, revolutionizing the fight against counterfeit sneakers by detecting unique chemical profiles with remarkable precision.As the sneaker resale market continues to boom, counterfeit goods remain a persistent concern for both luxury and mass-market brands. Counterfeiters have bec ...moreNCRF: ‘A very complicated stew’Cape Town, W. Cape, SA – The NCRF has 10 members with very different approaches to all sorts of things, so a forecast is difficult.We’re keeping an eye on factors including reduced interest rates, the two-pot retirement system, and political outcomes, and there is a degree of optimism, but I’m not willing to attach any f ...moreAMSA: ‘Perturbing trend’ in importsDurban, KZN, SA – As the economy still seems to be precariously poised due to various exogenous variables, I remain very cautious about looking into the future.The formal sector of the economy has not fared well in terms of employment as measured by Clothing Industry Bargaining Council figures (see attached chart).It appears that th ...more
Leather Industry Articles
- A cost-effective method of reducing loose grain damage during the bating processIntroductionEnzymatic bating is an important part of the leather making process. Bating enzymes help remove unwanted skin components from the hide structure, as well as any scud present on the grain layer. Good bating leads to clean, soft leather. Under bating results in poor removal of unwanted skin components, and a firmer crust leather ...moreHide demand steady amid growing global supply, gelatine plants absorbing higher number of lower gradesThe picture I get of the leather industry globally is that it is losing share in all its markets for a variety of reasons. In South Africa, the situation is compounded by cash-strapped consumers choosing cheaper alternatives. Cape Produce Company is at the beginning of the leather process, and it supplies all leather markets in SA and internationally. I asked CEO Benjy Lapiner if the picture is as bleak as I’m told. No, he said, but… ...moreRolfes Leather: New owners give it entrée to more African marketsBoksburg, Gauteng, SA – Rolfes Leather and the other 4 divisions which collectively make up the Rolfes Group have been acquired by the Solevo Group, a pan-African distributor of specialty chemicals.In a statement, Solevo said it had bought 100% of Rolfes Group in a deal backed by Solevo’s owner, London-based Development Partne ...more
PPE Industry Articles
- Fostering safety through commitment by empowering workforce development and lifelong dedicationJohannesburg, Gauteng, SA (24 October 2024) – Workplace safety is not merely a regulatory requirement; it is a fundamental aspect of organisational health and success. At its core lies commitment—a steadfast dedication to safeguarding the well-being of employees. When commitment permeates an organisation, it creates a culture ...moreTest methods for breathability of infant products focus of new subcommitteeSubcommittee F15.12 aims to fill the gap on breathing hazards for infant products W. Conshohocken, Pa., U.S. (26 September 2024) – ASTM’s consumer products committee (F15) has begun a new subcommittee on Firmness and Breathability of Juvenile Products (F15.12) on infant breathability test methods. The subcommitt ...moreOffshore wind energy: Mobile test platform for offshore wind turbinesBremerhaven, Germany (02 September 2024) – Public power grids are highly complex systems. Wind turbine manufacturers have to comply with technical guidelines when connecting new turbines to avoid putting grid stability at risk. In the Mobil-Grid-CoP project, researchers at the Fraunhofer Institute for Wind Energy Systems IWES have d ...more