Legal discrimination in apartheid and equity

As South Africa and most countries of the West attempt to enforce a state-led program of resource allocation based on race under the aegis of “equity,” it is timely to reevaluate the lessons to be learned from Walter Williams’ account of “South Africa’s War Against Capitalism.” In this book, Williams studies the economic effects of enforcing “a pervasive system of legalized racial discrimination.”

His main aim is to counter the widespread view that racial discrimination is inherent in capitalism. Capitalists are said to pursue profit maximization above all else, are said to lack a moral conscience, and are said to oppress downtrodden races with the aim of squeezing every cent of profit from them. This is the reasoning of those who regard “capitalism” as a synonym for any form of exploitation or injustice and therefore assume that racial exploitation is a form of capitalism.

Williams describes capitalism as “the unfettered operation of the market in the allocation of society’s scarce resources.” Based on that definition, he argues that “apartheid is the antithesis of capitalism” as it attempts to allocate resources based on race rather than allowing free market exchange. He shows that whatever else might be the goals of apartheid, it could not be said to be in any way motivated by capitalism. On the contrary, its leaders and enforcers openly declared their conviction that the penalty of economic stagnation was a price worth paying to pursue their policy of legalized racial discrimination. Williams therefore argued that apartheid is better understood as “a struggle against capitalism.”

One striking feature of Williams’ analysis is his apprehension that the end of apartheid could be followed by a new and potentially worse set of problems. He calls this “apartheid in camouflage.” He sees averting this outcome as one aim of his analysis, observing: “Hopefully, by fully understanding what apartheid is, we can fully eliminate it in such a way that it does not reemerge in other guise.” What eventually transpired, as is now clear, is that apartheid was not eliminated but merely transformed into a new form of legalized racial discrimination known as “broad-based black economic empowerment.”

While the old form of legalized racial discrimination conferred a layered set of legal rights and privileges on all racial groups with blacks having the fewest rights, this new form of legal discrimination confers a defined set of legal rights and privileges on all racial groups except whites. This legal racism is enshrined in section 9 of the South African Constitution, which provides that (1) everyone is equal before the law and has the right to equal protection and benefit of the law and that (2) equality includes the full and equal enjoyment of all rights and freedoms. This includes full and equal enjoyment of the right to housing (section 26); healthcare, food, water and social security (section 27); children’s rights to basic nutrition, shelter, basic healthcare services and social services (section 28); and the right to education (section 29).

Two important elements relevant to understanding the enforcement of “full and equal enjoyment” of equality, often styled as “equity,” are worth highlighting.

First, the motivations and impact of legal discrimination cannot fully be understood without an account of the people subjected to it. Williams observes that “there is just as much diversity among South African’s blacks as there is among its European population,” along with an “Asian (mostly Indian) population who have stood in periodic conflict with the black ethnic groups and with the Europeans, too.”

Further, to say that apartheid is wrong because it is “racist” in itself does not reveal the nature of the problem; after all, “equity” is racist too, yet many people support it because they think it is racist in the right direction, namely that it favors those they see as oppressed groups in preference to those they see as oppressor groups. Under equity, the benefit conferred on South Africa’s minority white population under apartheid is now readily transmuted into a benefit to the majority black population.

The second point to highlight is the role of the state. It is not the racial element of apartheid, in itself, that causes problems but the attempt by the state to enforce racial segregation and redistribute resources from one race to another. In fact, there is no method of state control of the economy that could work, which explains why communism does not work. It is clear in Williams’ account that state enforcement of legalized racial discrimination is of crucial significance:

“In any government policy — including legal discrimination — to create special privileges for one group, those special privileges show up as special disadvantages to some other group. In South Africa, those disadvantages were felt mostly by its nonwhite population. But part of the disadvantage was felt by members of its white population. This produced widespread tension leading to resistance, evasion, and contravention of racially discriminatory laws. ... That kind of opposition to apartheid continues today [1989] and has become more open, pervasive and effective.”

For that reason, the apartheid system was under considerable internal pressure long before it was officially ended in 1994. Hence, Williams observes:

“But long before the international climate made apartheid an untenable proposition, South African’s legalized system of racial discrimination was under attack from within. A small part of the internal battle against apartheid was waged on moral grounds by South Africa’s decent people, both white and nonwhite. A much larger part of the battle was waged not for decency or the brotherhood of man, but on economic grounds where the stakes were profits and losses.”

It would therefore be mistaken to suppose that what is wrong with legal discrimination is simply its “racist” nature. Williams regarded racial discrimination as “morally offensive,” a view shared by many people. He hoped that his study of apartheid in South Africa would “contribute to a greater understanding of racial issues elsewhere.” Beyond that, an important lesson that emerges from his study is that state command and control is always wrong, and it does not become objectionable only when it is morally offensive. On the contrary, it must be opposed on the basis that it goes against individual liberty, private property, free exchange and peace. That it purports to do so on racial grounds adds insult to injury, but the injury is fatal in itself.

That is the main reason why Williams warned about “apartheid in camouflage.” He wanted to emphasize that his study was not simply a moral critique of racism but an economic inquiry into the destructive effects of “restrictions that are achieved when one class of individuals acquires privilege through the use of state violence to deny another class of individuals the right to engage in voluntary and mutually agreeable exchanges.” Williams therefore called for an end to the war against capitalism as well as for a declaration of a “war against centralized government power.” That warning applies in the same way to contemporary racial “equity” as it did to historical apartheid.

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