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Food for thought: Will thee pandemic teach South Africans the basic laws of business?

29 Apr 2020

Food for thought:

WILL THE PANDEMIC TEACH SOUTH AFRICANS THE BASIC LAWS OF BUSINESS?

It is amazing how a crisis focusses the mind on issues past and present. Covid-19 has brought into perspective some of the most fundamental truths and, hopefully, appreciation of the essential and basic objectives of a business enterprise:  

  • To make profits.
  • To safeguard some of the profits to create reserves.

I have heard many comments on business and profits, ranging from the basic “the reason managers have briefcases is for taking money home”, to sublime statements by Government officials that “businessmen are more interested in profits than the lives of people”.

A popular theme followed by many trade union members is that the annual profit of a company should be divided equally among all the employees.  Arguments regarding the profits being kept in reserve for future Capital Expenditure for expansion, equipment breakdowns, or funding wages during unforeseen crises such as pandemic lockdowns, fall on deaf ears. Counter-arguments, asking that if profits were indeed to be shared among the labour force annually, would the workers then dig into their windfall earnings to contribute to deal with the above-mentioned crises conditions? This kind of question falls on even deafer ears.

 Money, Capital, retained earnings, business strategy and know-how do not grow on trees, and must be earned to sustain profitable and growing businesses. Businesses that make profit and employ workers and - most importantly - pay tax to keep the fiscus ticking over.

The fiscus is a Latin term which means “the basket” or “moneybag.” In Roman law, “fiscus” meant the emperor's treasury. Later, the term also included treasury of the state. This is the very same fiscus that pays millions of social grants, child allowances and pensions. Oh, and I almost forgot, the very same basket or moneybag that our Government has plundered through greed and corruption over the past 20 years

Maybe, just maybe, during this period of lockdown and introspection, when our thoughts stay on concerns such as “how do we sustain and maintain our companies, how do we pay our staff and workers, how do I pay my rent or mortgage, and how do I keep my family fed” South Africans may see the light. Maybe, after this pandemic is over -  and it will be in time - we will appreciate our jobs, our companies and the benefits that we derive from them.

Maybe also, trade unions will remember the rationale for their existence: “not to function as labour market monopolies, nor raise wages above competitive levels set by the market, nor create inefficiencies resulting in the loss of jobs and greater income inequality in the workforce”.

And maybe, with lessons duly learnt, we can all then rekindle the tried and tested principles that make countries and people successful and great: integrity, honesty and the feeling of contentment that comes from a hard day’s work and enjoyment of the fruits that follow.

It makes you think… doesn’t it? 

DERYCK SPENCE

Executive Director, SAPMA
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