Structural obstacles to poverty relief

Last week I argued that state policies which are aimed at poverty relief should be driven by respect for the agency of the poor. Poor people should not be seen as mere recipients of handouts. That would be both fiscally and ethically imprudent. The policy implication is that creative mechanisms must be found to develop self-sufficiency among the poor so as to end undignified dependency. Despite the obvious short-term political unattractiveness of this position it is surely the correct philosophical foundation from which to derive more specific practical solutions.

However, there are important structural realities that I had deliberately set aside so that the principled point could be stated baldly. A person’s agency cannot come alive if the structural impediments they face are insurmountable. Inequality represents the single most important structural injustice in SA today. If we do not address inequality then we can forget about a society in which self-sufficiency and self-actualisation are on glorious display next to glorious soccer stadiums. The more complete goal of our social policies must therefore be to activate the agency of the poor but to recognise that doing so also requires structural impediments to be dismantled. Our social policies should therefore include measures that address these structural obstacles effectively.

Don’t get me wrong. This is not a complicated way of contradicting my stated conviction that the poor should not be treated as subjects but as agents. We must resist framing debate on poverty alleviation as a choice between callous ‘tough love’ approaches (“Fend for yourself, wena!”) and disrespectful ‘hand out’ approaches (“If you need anything, Mavis, I’m right here!”)

The topic of entrepreneurship provides an excellent case in point. One obvious strategy for activating someone’s agency and in the process boosting their self-esteem is to provide them with a job. It is therefore deeply troubling that in the past year or so we have been showing signs of not just jobless growth but job-shedding growth according to recent Statistics SA data. Both the problem of dependency and the need for incentivising self-sufficiency, however, are intimately connected to these economic developments.

South Africans go into instant panic mode if they are unable to secure a job from some private company or a state department. Why? Because the confidence it takes to be an entrepreneur is lacking in the psyche of a people who internalised the apartheid state’s propaganda that blacks are useless creatures. It is little wonder that our most successful self-made business persons are mostly white. Whites are less self-deprecating about their capabilities. A culture of dependency reinforces such low self-esteem. Low self-esteem, in turn, means that creative solutions to job creation such as encouraging a much needed culture of entrepreneurship get overlooked. This lack of focus on how to activate our people’s agency clearly goes beyond welfare matters and even seeps into our related macro economic thinking. Respect for agency and self-sufficiency could serve as a catalyst for fresh debate on job creation solutions. Entrepreneurship would then stand a better chance.

Still, if the state recognised that it must incentivise economic self-sufficiency through encouraging entrepreneurship, such a policy would fail if structural obstacles faced by the poor are not addressed. Even if some kid from rural KwaZulu-Natal had the most unexpected levels of Verwoerd defying self-confidence as well as an enviable natural knack for business, she would stand a great chance of failing without access to social capital, financial capital and business mentoring. Things like social capital, financial capital and business mentoring are goodies that do not compete with uncollected litter for space in the streets of our townships. You therefore cannot blame someone for being poor in circumstances where the fundamental explanation for their poverty is the absence of these goods. And therein lies the complicated reality of agency struggling to emerge in the face of crippling structural obstacles.

The government is not totally unaware of these truths. But it fails to put concepts such as agency, self-sufficiency and entrepreneurship at the heart of policy design. Sure, government does use this kind of language from time to time, but that hardly counts as progress. Failure is both the result of these viewpoints not being fore grounded and the result of failed implementation where these ideas are tried out.

For example, institutions like the Industrial Development Corporation, the Development Bank of Southern Africa and the National Youth Development Agency exist in part to help the poor overcome structural impediments to business success. But often these institutions simply hand out cash without realising that psychology is as important as money in determining business success. Mentoring young businesspersons to be in the right headspace, helping them negotiate institutional norms in corporate SA that are often career cripplingly alien, offering them practical help in respect of operational and organisational design challenges, etc. are all overlooked in practise. Equally, we could write a treatise on private sector impediments such as the difficult of accessing commercial bank loans. The existence of these structural impediments is not the fault of the poor. And the poor cannot be expected to singlehandedly dismantle these impediments. Government must take the lead.

It remains correct to insist that welfare policies should not breed dependency but aim to activate the agency of the poor. That, however, requires the removal of structural impediments. Time is no longer on our side.