Saturday, April 4, 2020

A rejoinder to Botsalo Ntuane on ‘Masire’s welfare state’

I read with considerable interest Botsalo Ntunane’s article, ‘New narrative threatens Masire’s welfare state’ (Mmegi Monitor May 28, 2007). In the past, the BNF simplistically dismissed vocal BDP backbenchers as no more than a bunch of opportunists indulging in radical posturing geared towards coaxing the President to give them ministerial posts. I think this view may have been overtaken by events.

It is increasingly becoming clear that there are growing ideological differences within the BDP which must be taken seriously. Recently four BDP MPs, namely Botsalo Ntuane, Duke Lefhoko, Boyce Sebetlela and Keletso Rakhudu, defied the President and their Central Committee by delaying the Judges Pension Bill, the vexed privatization of Air Botswana and the passing of the budget by questioning its PPP policy. This defiance was unprecedented in the history of the Botswana parliament which has always been a talking shop or a powerless institution which simply rubberstamps the decisions of the all-powerful executive. Hence anger and frustration of the President and his executive. One foreign researcher recently asked me if there was a possibility of these MPs breaking ranks with the BDP and joining the opposition. My response was that that possibility would be unprecedented and seems unlikely, at least for now. However, of the four radical BDP MPs perhaps Ntuane increasingly stands out as the most radical. Recently before the landmark judgment on the CKGR indaba he defiantly told the government to accept defeat in the battle with Survival International. His views on the shrinking rudimentary welfare state clearly place him further to the left of the mainstream BDP regime.

I share Ntuane’s concerns about the attack on the rudimentary welfare state but I am worried about his misleading ideology of the welfare state and, of course, his contradictory position of embracing the neo-liberal economic policies while at the same time rejecting its corollary ÔÇô the attack on the welfare state. Having jumped onto the bandwagon of neo-liberal globalization the BDP regime cannot be expected at the same time to defend the welfare state. Ntuane seems to subscribe to views broadly consistent with those of ‘the reluctant collectivists’ whose leading proponent was none other than the British economist John Maynard Keynes. The reluctant collectivists did not have faith in an unregulated free market system which they saw as wasteful, inefficient and misallocating resources and hence incapable of abolishing poverty and injustice. Keynes was a fierce critic of laisser-faire capitalism and therefore embraced limited state intervention in the economy.

From the 1940s to the 1970s British bourgeois economist Keynes had a major influence on the state provision of basic services throughout the world. The influence of Keynes’ economic doctrine in Botswana was evidenced, among other things, by the development of parastatals in the 1970s and the state provision of basic services like education and health or what Ntuane calls ‘Masire’s welfare state’. To justify its policy of nationalization in 1965, the BDP regime at that time correctly argued that the ‘beef industry is too important to be left in private hands’ and state intervention in that sector put an end to its dependence on the South African market, even though this was replaced by dependence on advanced capitalist countries.

Obviously socialist governments by their very nature were more interventionist than capitalist governments but even in the latter there were strong elements of state intervention. The Conservative or Tory leader Joseph Chamberlain referred to state provision of social services as ‘gas and water socialism’ but now, in the era of neo-liberal globalization, everything must be privatized and so-called ‘user-fees’ levied on social services.

This global perception of a strong state involvement in development explains the huge state investment in education in the 1960s and 1970s, especially in the ‘third world’. Because of the windfall from diamonds, state provision of education in Botswana continued well into the 1980s without anybody raising the dubious argument of ‘cost-sharing’ or so-called ‘parental accountability’ in education. Barely 6 months since the introduction of school fees with false arguments and false promises by the state that no child will be denied access to school because their parents have not paid school fees, thousands of children are already languishing at their homes.

Botswana, just like Malawi in 1993, is now a victim of the ‘The Thobani rule’.
Mateen Thobani’s study for the World Bank recommended school fees in primary education for the first time in an African country with devastating consequences. Thobani argued that parents needed to pay school fees otherwise there was a danger that educational services would not be available or its quality would become unacceptably too low because the government could not, on its own, pay for this service. He further argued that additional funds had to be raised for purposes of ‘efficiency’ to reduce average class sizes from 66 to 50 and provide more books and supplies. The equity argument was also used because of the claim that, if additional funds were not found, it was the poorest pupils who were going to suffer most. The World Bank’s other dubious argument was that of parental ‘accountability’ – the idea that the importance parents attach to education is linked to their willingness to pay fees for their children. The BDP regime regurgitated basically the same World Bank arguments to try and justify the introduction of school fees.

Thobani’s argument that ‘to increase school fees would not decrease enrolments and that the poorest would not drop out of school was proved wrong’. After the collapse of Banda’s dictatorship the new government abolished school fees in 1994 and this ‘led to the immediate doubling of enrolments.’

If this time-bomb in Botswana is not defused sooner rather that later the children and their families and, indeed, the country face a bleak future. The BNF’s verbal condemnation not backed by any action did not translate into pressure that a progressive organization is supposed to bring to bear on a neo-colonial regime. The much promised anti-school fees mass actions never materialized.

What is missing from Ntuane’s article is the recognition of fact that the advent of the neo-liberal doctrine has had a disastrous effect on the welfare state. The global capitalist crisis of 1974ÔÇô76 shattered the Keynesian economic doctrine prompting new bourgeois economists to emerge to try and offer alternative theories. The Keynesian welfare system came under attack and that marked the beginning of the current neo-liberal economic fundamentalism; the ‘anti-collectivists’ driven by imperialist countries.

Among the leading bourgeois economists who challenged the Keynesian doctrine were the American Noble Peace Prize Winner, Professor Milton Friedman, Professor FA Hayek and the Institute of Economic Affairs which were the main proponents of neo-liberal globalization.
I was amazed to learn that Dichaba Molobe in his column shed tears over the death recently of Milton Friedman ÔÇô a bourgeois economist whose policies have ruined the lives of millions of people across the globe.

On the whole, owing to their faith in the spontaneous order of the market system and their suspicion of government activity the anti-collectivists were hostile to welfare state. In their view, the welfare state is damaging to the central social values and institutions – the family, work incentives, economic development and individual freedom. They claimed that the welfare state threatens freedom by imposing certain minimum standards on people thus creating equality by coercion. This gives immense power to bureaucrats and professionals who decide what is good for other people thus instilling in one group of people a feeling of almost god-like power and on others a feeling of child-like dependence. Governments cease to be so-called umpires in the spontaneous order of the market system and become instruments of the powerful groups in society. Anti-collectivists claim that state provision is fundamentally inefficient because it lacks competition thus leading to ossification and lack of experiment and innovation.

Freidman and his colleagues further argued that public service was inherently inefficient because it lacked two basic disciplines of the market namely, concern with costs and sensitivity to consumer preferences.
It was also claimed that the welfare state undermined other so-called ‘natural’ sources of welfare such as the family, the voluntary sector and the market hence Margaret Thatcher, a staunch proponent of the anti-collectivist school, argued that we must first try and put responsibility back where it belongs ÔÇô the family and the people themselves.

Other related charges by the anti-collectivists are that public provision induces dependency, demoralization, irresponsibility and saps initiative, self-reliance and other desirable Victorian virtues and values. If some anti-collectivists embrace some form of state provision then it is the barest minimum benefits based on means tests.

This is the dominant language of neo-liberalism which is the real cause of the collapse of the welfare state not just in Botswana but globally.
Of course, these arguments have been challenged and found wanting in many respects.

Friedman claimed that a winding down of the public social security provision ‘would eliminate its present effect of discouraging employment and so would mean a larger national income currently. It would add to the personal saving and so lead to a higher rate of capital formation and more rapid rate of growth of income. It would stimulate the development and expansion of the private pension schemes and so add to the security of many workers’.

Friedman’s economic doctrine basically returned in some ways to the old neo-classical school of bourgeois economics arguing that the ‘invisible hand’ of the market always guides the efficient allocation of resources.

Friedman claimed that the capitalist crisis stemmed from state interference in the economy thus stifling the ‘creative and liberating potential of the market’. The bourgeois economic argument had turned full circle as governments were now being bludgeoned into submission – to roll back the frontiers of the state and give the market a free reign or face collapse.

Besides the fundamental contradiction in Ntuane’s argument, there are certain flawed arguments in his article. Ntuane claims that ‘the welfare state refers to a system whereby the government, out of humanitarian, compassionate and socio-economic considerations, assumes the primary responsibility for the care of its citizens’.

This view is consistent with the ‘order theories’ i.e. consensus theories and functionalist theories and does not necessarily square with the facts. In our view, the growth of the welfare services is explained by three factors ÔÇô namely the contradictions between the dominant classes in capitalist society, the needs of the capitalist system and the Machiavellianism of the capitalist class. Karl Marx argued that the factory legislation in Britain and the creation of the normal working day were products of the industrial and political power of the working class. To assure conditions for capital accumulation (which has nothing to do with Ntuane’s so-called ‘humanitarian, compassionate and socio-economic considerations”) the state had to invest in the overhead social and physical infrastructure ÔÇô roads, health care and minimal general social welfare. But times have now changed.

Yes, as Ntuane correctly acknowledges, ‘many challenges such as poverty and unemployment are still facing the nation’ despite the fact that this country is endowed with so much wealth. This structural poverty and unemployment can never be eliminated by the capitalist system that breeds it, however comprehensive its welfare provision may be. Poverty is a direct consequence of the capitalist system which divorces the majority of the people from the means of the production and therefore a permanent feature of capitalism. Anybody who embraces capitalism and claims to be concerned about poverty is only trying to deceive the masses. Anybody who embraces the capitalist neo-liberal economic system and claims to be against its assault on the welfare state is equally deceiving the masses.

Within the Marxist school of thought there have always been two views on social reforms within capitalism. Either social reforms are squeezed out of the capitalist class by militant workers or they appear to be granted freely the ruling class but with ulterior motives.

Though social reforms may be squeezed out of the capitalist governments by working class pressure, the ultimate major beneficiaries are always the capitalist classes themselves.

Perhaps it is more accurate to say the welfare state is the result of interplay of these two factors in specific historical contexts.

The point we wish to underscore is that Masire’s so-called ‘welfare state’ was not driven by any humanitarian needs but rather the needs of capitalist society. Capitalism has never been a humanitarian system. The notion of a ‘compassionate and caring’ capitalism is the ideology of the BDP regime, ironically trumpeted by the Mogae’s government which Ntuane sees as uncompassionate.

The policy shift is not about the alleged compassionate Masire regime and the alleged uncompassionate Mogae regime implied in Ntuane’s article. It is simply about the changing needs of the capitalist system. Masire’s presidency coincided with the welfare state informed by Keynesian economic orthodoxy while Mogae’s presidency coincides with Friedman’s neo-liberal globalization which is hostile to the welfare state.
In Botswana the welfare system is also notoriously geared towards political manipulation of the poor by the BDP regime. It is their favourite strategy of buying votes hence many deserving members of the BNF and other opposition parties are denied access to some of the services. The most powerful groups in society always benefit more from welfare measures. Universal and free services often benefit the middle and upper middle income groups more than the weaker and poorer members of the society.

Indeed the main beneficiaries of the welfare state are the bureaucrats, professionals and administrators of the system rather than the poor and weak members of society they purport to serve. Money and wealth in capitalist society tend to gravitate towards those who are already privileged or own the means of production. Of course left to its own devices the capitalist system of production and distribution has an inherent tendency towards stagnation and under-consumption ÔÇô the historic tendency of the rate of profit to fall. Hence a certain measure of Keynesian state intervention in the form of public and social expenditure is necessary for its own continued survival and efficiency.

Botswana only had a minimum welfare state which fell far short of a universal social security system. For instance, despite the existence of a very high unemployment rate of 40 percent, there are no unemployment benefits. The BNF calls for a much wider security system which also still falls short of a socialist security system. Lenin’s speech in 1912 still provides the most comprehensive statement on the socialist security system:

It should provide assistance in all cases of incapacity including old age, accidents, illness, death of the breadwinner, as well as maternity and birth benefits.

It should cover all wage earners and their families
The benefits should equal earnings and all costs should be borne by the employers and the state
There should be uniform insurance organizations, (rather than organizations by risk) of a territorial type and under the full management of the insured workers.

In other words, the socialist security system should be universal and financed out of general taxation. Both the insurance and means-testing are antithetical to the socialist security system because the first excludes many people from receiving benefits while the latter creates second class citizens.

The socialist security system must be preventive and based on democratic participation with the power of professionals and administrators curtailed.