Criticism of the party Nelson Mandela personified had been restrained until Jacob Zuma appointed, briefly, a lackey as finance minister. So how can it be that, despite whirlwinds of corruption and incompetence, five years later our ruling party can still deflect or ignore the fallout from its destructive policies and practices?
The disturbing answer is that, whereas high-growth emerging nations harness inequality to pummel poverty, here it is exploited to blur accountability.
South Africa’s redistribution-focused policies reflect our political discourse being overwhelmed by today’s most formidable social justice issue, racial inequality. Our ruling party’s incessant economic mismanagement can be traced to South Africa’s topping the charts for both racial inequality and opportunistic politicians.
Our ruling party counts on the majority of voters believing that its policies will overcome inequality, thus triggering broad prosperity.
However, over-prioritising inequality has triggered debt and poverty traps, thus exacerbating inequality while entrenching unemployment and poverty.
High-growth countries invariably compete with, and thus learn from, regional rivals. Such constantly updated realism through peer group referencing is conspicuously absent from our national dialogue. Rather, our economic debates never escape inequality’s gravitational pull. None of our leaders can offer a workable growth plan, as our politics send us drifting ever further from the orbit of today’s intensely integrated global economy.
South Africa was this region’s presumptive role model, yet our inequality-framed policies and politics aren’t reconcilable with the world’s twin growth drivers: innovation and global integration. Importing the policies common to high-growth countries is the opposite of what is done here. Our political elites use historical injustices, referenced as inequality, to justify growth-defeating policies.
A broader historical perspective must inform our policy-making. This is required in order for us to appreciate how, and why, the interplay between political influence and economic growth is once again being reshaped globally.
The agriculture era lasted thousands of years, with nearly everyone being a peasant. Political and economic power was concentrated in families that controlled large landholdings. This was a stable system, but poverty was the norm; opportunities for advancement were rare and usually bloody.
Machines upended life. Controlling them and controlling below-ground resources became more lucrative than controlling land, while peasants could become skilled workers and democracies could politically empower the masses.
Technology-driven progress requires continual reshaping of how political and economic powers are structured. If an aristocrat or tribal chief had owned all the land where Silicon Valley resides and insisted on maintaining political and economic control, that jurisdiction’s scientists, inventors, investors and creative business people would have needed to gather elsewhere.
Can’t follow suit
Today’s most prominent political leaders have reluctantly accepted that they are reliant on private sector pioneers to drive growth. Our elected leaders can’t follow suit until they accept that redistribution-focused policies are self-defeating. This is at least as difficult for our ruling party as rooting out corruption. The politicising of inequality is the kernel of its liberation movement DNA, which it has retained.
Competing globally through carving out niches is incompatible with our politics which mix the majority’s having been oppressed with the presumption that wealth is still determined by land and natural resources. Phrased differently, chanting ‘inequality’ perpetuates the myth that redistribution is an alternative to sustained high growth. This provokes a perspective which faces inward and backward amid an integrated global economy where competitiveness and innovativeness drive growth.
The Covid-exacerbated economic crisis has diluted the delusion that South Africa’s resource endowments render it a wealthy nation. Without sweeping policy shifts, a sovereign debt crisis will induce more realism.
Our ruling party wants to send peasants to the well-paid factory jobs that swelled the middle classes in the West and then in Asia. Yet such jobs are declining globally.
Pioneers being ahead of the politicians is not new, but the chasm is widening. Scientists, inventors, and creative business people are only marginally constrained by politicians. Investors, however, are quite vulnerable to politicians indulging themselves.
South Africa’s relations with investors are breaking down. Debt restructurings will become increasingly common, as continuing to emphasise redistribution will ensure costs are compounded amid a stagnating economy. Cleaning up corruption and incompetence is necessary but insufficient.
As the global economy becomes increasingly digitised, the scope of national governments must be adjusted accordingly. This is great news for poorer countries with pro-business leaders. Distance and education-determined barriers to employing the least employable are being rapidly eroded by scientific breakthroughs.
We really are surging into a new era. YouTube videos and machine learning can counter dire education outcomes. Seemingly awkward combinations of people and technologies will become increasingly commonplace. Unemployment could be pummelled if our elected leaders weren’t trying to replay the last century. The global pace of change is increasing..
In barely a year, the shifts toward digitalisation and away from traditional industrial models have spurted. Services had already superseded manufacturing in driving global growth and now we know that many information workers can operate remotely.
Equating tech billionaires’ shareholdings with material wealth obscures a critical insight. The pandemic has highlighted how politicians play important roles, but solutions are mostly developed by science-led pioneers. Humans are getting ahead of the virus because scientists, working with or within large corporations, are making great leaps forward. The same is generally true regarding our environmental challenges.
Dozens of steps ahead
Very few people are capable of driving such processes. Commercially minded nerds who can code at a high level are accustomed to thinking dozens of steps ahead while objectively considering a multitude of factors and scenarios. The ones with the most impact amass large piles of ‘investment tokens’. The private sector supports this structure, as – while it leads to many false starts – overall it vastly outperforms having politicians, or their minions, attempting to pick winners.
Previously, inequality was shaped by the chiefs and barons owning the best land and everyone else being peasants. Today’s tech billionaires are, in effect, elected by many millions, or billions, of customers choosing services which they creatively invented – literally out of thin air. Bullies and propagandists are losing ground as the global economy becomes increasingly moulded by great ideas being unceremoniously displaced by even better ideas. Today’s free and prosperous societies are adjusting accordingly.
Today’s innovators don’t get rich by controlling and exploiting large swathes of physical assets. If they are fabulously successful then almost all their wealth is represented by investment tokens that they can’t realistically convert for personal consumption purposes. Successful societies have consumers ‘voting’ through purchases to identify the best innovative business teams, and those people are then afforded disproportionate voting rights to identify and fund the next waves of innovation. This isn’t a perfect system but it is vastly superior to alternatives.
Steve Jobs-types are the inverse of the mining magnate and oil sheiks who manipulated political power to control natural resources. Today’s tech billionaires are builders. To them, natural resource exploitation and industrial assets are things to minimise. That’s in keeping with today’s surging global emphasis on green and digital themes.
If someone entertains millions of people by singing or playing football, we are pleased that they become rich. Yet our conditioning from earlier eras has made us associate tech billionaires with land barons or colonialists. Such thinking is outdated and dangerous.
To hold our politicians accountable we must update the national dialogue.
The views of the writer are not necessarily the views of the Daily Friend or the IRR
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