Fr Pierre Goldie: Big Business Must Now Give Back

by Fr Pierre Goldie · Published June 23, 2020 · Updated June 19, 2020

It is surprising to note how many commentators contend that the pandemic, apart from its devastating effect on life and the economy, is heralding a new way of doing things, a new way of thinking, the beginning of a new, and better (?) way of managing world affairs.

Is this a type of sensus fidelium, a sense of the world that something new is called for, in business, politics, and all the realms of society? Or will the world return to “normal”—a norm which is destructive in many of its undertakings?

The world economy discovered that the oil price could actually fall, to the chagrin of oil producers but to the benefit of users of oil in the many ways it is processed and sold.

The business world was freed for a while from the tyranny of high energy costs, of prices that reflect an oligopoly market system, and the many responses this has foisted upon the economies of the world.

Investors normally cheer when the oil price rises because shares prices such as Sasol’s rise. Now there is confusion; now the oil users cheer!

House and property prices have declined, to the vexation of property investors but to the benefit to those who are looking for houses, who need a secure dwelling.

In short, rising prices may be to the benefit of a few but are not always the best for society as a whole.

The gold pundits cheer when the gold price rises, oblivious to the fact that it is a reflection of a malaise in society, a disquiet that is hurting our world.

It is illuminating to observe how pollution levels have decreased as world economies went on hold to retard the spread of Covid-19. At the very least, this should galvanise the business world’s attention to the way in which industry damages our ecology.

Look at long-term wellbeing

Our market system encourages many excesses, and overemphasises short-term solutions which are detrimental to broader society and long-term wellbeing.

I would like to reiterate part of my previous article. The government announced a special R500 billion package to assist the people who have suffered from the immobilising of the larger part of the economy due to the lockdown.

A sacrifice is called for, especially by companies that have ample reserves. Many of the larger businesses in South Africa have benefited substantially from the availability of cheap labour of peoples unfamiliar with the world of mining and industry.

Now is the time to give back, to reciprocate for the substantial benefits enjoyed over the past century, built up by entrepreneurs with a tradition of business, of mercantile flair, and assisted ably by the cheap labour of those to whom industry was a new experience, and who were coerced into the cash economy by the demands of state-imposed taxes and loss of farms.

Can the business sector be motivated to make a life-enhancing sacrifice? The total market value of the top 40 shares is around R12 trillion (or around R15 trillion including the rest of the quoted shares). If the top 40 contributed R500 billion to society, this would amount to some 4% of their combined market value, which could be made in proportion to their respective market capitalisation.

God will not be impressed with how much money we have made; he’ll see how we used our surplus.

There have been some generous responses from charitable foundations; surely the challenge is now with the large concerns, to implement ways which are practical and equitable.

The BEE logic has resulted in some substantial allotments of shares to the formerly disadvantaged. There is no shortage of ingenuity on the part of industry to design a scheme matching in value that of the government. Hopefully, there is no shortage of charitable and moral backbone.

I am confident that big business can make even more substantial contributions to our ailing country.