Writer defends business as engine of development

“The Case for Business in Developing Economies” (Penguin, $34.95), by Ann Bernstein

The rhetoric around the economy in South Africa can be heated, perhaps because unions and the Communist Party work closely with the governing African National Congress.

For instance, working papers the Congress of South African Trade Unions prepared for a recent policymaking session with the ANC declared the source of corruption “is, and has always been, the capitalist system.”

No wonder Ann Bernstein, who heads a conservative Johannesburg think tank, was moved to write “The Case for Business in Developing Economies.”

Bernstein presents herself as a hardheaded realist focused on getting the job of development done. In a style that is forceful, lively and not without humor, she takes on figures like leftist, anti-globalization writer Naomi Klein and the international pressure groups known as non-governmental organizations, or NGOs, that have pushed global business to pursue good along with profits.

Bernstein may spend too much of her 372-page book defining and blasting the enemy rather than developing her thesis. It’s 142 pages before we get to Part 2: “Business is good for society and essential for sustainable development,” and that’s where her work gets most interesting and nuanced.

Success in business, she writes, “generates the profits and growth which enable governments and companies to transform barren landscape into a thriving city, to change the future of a hitherto poor country, to modernize individuals and societies.”

International companies’ hunger for workers means they take on women and minorities, giving those groups opportunities they might not otherwise have, she writes.

“Firms are optimistic by nature, the very opposite of the fatalism that characterizes more traditional societies, or those that have labored for decades under socialist rule or other kinds of ineffective, corrupt and debilitating governments that clamp down on initiative and achievement,” Bernstein writes.

The book is not an argument for deregulation or a defense of the corrupt. Bernstein does not let capitalists completely off the hook. In their quest for the new and for more efficiency, entrepreneurs destroy as well as create, she says, leaving behind workers without the latest skills and competitors without the comparative advantage.

A writer who at one point declares “NGOs hold back development” praises the apartheid-era groups that organized a boycott that forced businesses in their communities to end segregation in their shops.

“Like the majority of South Africans, business people could have done much more to oppose apartheid,” she said. “It is not good enough to apologize profusely and then go back to business as usual, or establish a relationship with the new government which is as uncritical as that with the previous one.”

There are no charts or footnotes to put off readers who might not normally be drawn to the subject, and for those who want to know more, the extensive list of references at the end can serve as a guide to further reading.

And back at the policy conference, the ANC held a moderate line. President Jacob Zuma met with business leaders on the sidelines of the meeting, squelched calls for nationalizing mines, and declared his allegiance to “a mixed economy,” where the state, labor and private capital would work for development together.

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