Apartheid-one way or another? Rarity of Black-Run Businesses Worries South Africa's Leaders notes an article in The New York Times. They are setting ridiculous targets, and frankly going about it all wrong. One thing that this article leaves out is that government creation of a middle-class in South Africa has a long history-the Afrikaners did it in the early 20th century, pulling themselves into a semi-respectable parity with the English speaking whites. But even after 70 years of proactive promotion of Afrikaners, the English speakers still tended to be more well off and "control the means of production." The Afrikaner's prosperity and income was more likely to come from government service. The blacks are trying to do what the Afrikaners did, but there is a problem in that they are some 75% of the population, so a push toward parity stretches many more resources. And they haven't learned the lessons from the Afrikaners-this attempt to maintain or create wealth through government policy is never temporary, but creates structural incentives that rational actors will take into account. The "New Economic Policy" in Malaysia, designed to increase the wealth of the Malays in exchange for not killing the Chinese out of envy is still in effect-after 30 years! Brahmins still dominate the professions in much of India, even after decades of pro-back-ward caste affirmative action [1]. And after one and a half generations of affirmative action in the United States, there is still no end in sight. Government programs to promote wealth creation undermine the very skills and traits that are necessary for capital accumulation and instead encourage a suite of other tendencies that entrench government parasitism as the road to riches. I do understand that a long term scenario where whites (and to a lesser extent Asians) control the means of production while black, and to a lesser extent colored, masses toil is not tenable for a democracy. And apartheid, the solution for all those decades when such a modus vivendi was the status quo is not an option. So in the end, you will see the whites, and probably Asians, of South Africa leaving the country, as they are doing now, and taking with them their social and economic capital. The irony of it all will be that though there will be less envy and resentment of the few minorities left from the black majority, the latter will probably be less well off than they would be if the capitalist classes and races had stayed. Such is the way of the world.... [1] Just like in the United States-what is "backward" has expanded to the point where most of the beneficiaries are not social or economically marginal. Similarly, the Malays or blacks that take advantage of affirmative action are those already in a position to acquire wealth, it simply serves as an added means to an ends.