How about a new, fearless SA capitalism?

Former president Kgalema Motlanthe was spot on when he told an engineering indaba audience in Sandton on Thursday that South Africa needs a pact for labour reform.

It is the cost of labour, combined with the ideological and emotional obstinacy of business, that explains half of the reason our economy makes no progress.

The other half of the explanation lies squarely with the ANC, where, extraordinarily, absolutely no appetite for reform of our Victorian capitalism exists. We are still much the same economy that people such as Cecil John Rhodes grew wealthy on. Wealth, it was promised, would trickle down from the top.

Well, it doesn’t, but you won’t find many newly wealthy black businessmen doing much to change things. Their reasoning? Why should the rules of capitalism change now that we are making money the easy way whites did?

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Motlanthe has been doing some thinking and consulting about how to change the way we create and distribute wealth here. He now has a foundation to help him with research and it never takes anyone long, if they’re trying, to begin to find new answers to our problems.

The first is almost always Germany, an economic and industrial powerhouse flattened during World War 2 and which miraculously recovered and won the subsequent peace. It managed this partly because the victorious allies, fearful of a revival of German nationalist industry, forced a model of what is called co-determination (mitbestimmung) on German employers. In other words, companies would be forced to invite trade unions onto their boards and to make decisions with them.

It was a forced consensus but it worked. Transparency is key to trust.

The union representatives on the board of Volkswagen get the same board packs as the other directors at the same time. When I worked in Germany in the mid-1980s, a strike in the auto industry used to end up as a protest during lunch-time. People were aligned. They understood what failure looked like and they were never going back.

And, as Motlanthe was trying to say on Thursday, the first objective is to create trust. Once we become a high-trust economy, we could do almost anything. We know what a low-trust economy feels like because we live in one. Next week the price of petrol will rise more than 50c a litre.

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That’s because our currency is weak and that’s because there is no economic consensus among us.

Motlanthe adding his voice to a change in our model is important. He remains highly regarded in the ANC and he needs to find a distinctive message. A new South African capitalism, inclusive and fearless, would not be a bad way to go. Its attractions have certainly escaped the official opposition.

A new pact, where labour and business each leave their most beloved beliefs and fears at the door, could change our country. There is no substitute for profit in an economy, but how you make it and how you distribute it is each nation’s to decide. We have not yet had that privilege.

Even the unions, much as business likes to moan about them, know this.

They need strong companies and, once unions and business team up, they are unbeatable. For instance, the contribution of Irvin Jim, boss of the National Union of Metalworkers of South Africa, during the recent discussions to try to save the steel industry was absolutely critical. It was Jim who put the fear of God into the mandarins at the Department of Trade and Industry as the industry begged for protection from Chinese imports.

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Amazingly, almost right up until the bottom fell out of the steel market, the department had deliberately punished the local steel industry by refusing to include, in its annual iterations of the Industrial Policy Action Plan, many local steel products for preferential procurement by the state.

What that meant at ArcelorMittal (the old Iscor) is, for example, that none of the steel in the new and delayed Eskom power stations, Medupi or Kusile, is local. None of the steel in electricity pylons erected in the last six years is local.

Now that is changing. Garth Strachan, one of the architects of industrial policy at the Department of Trade and Industry, told reporters on Thursday at the same conference that “if we lose our steel production capabilities we may never be able to have it back”. Well, quite. Motlanthe’s pact is critical and it should probably best be left to business and labour to sort out.

Keep the government well away from money.