Category: Cities

Anti-business, Central planning, Cities, Developmental state, Differentiated products, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Emigration/Immigration, Enterprise density, Enterprise friendly environment, Enterprise regularities, Enterprise richness, Entrepreneurial space, Export-led growth, Free State, Immigration/Emigration, KwaZulu-Natal, Large towns, Municipal efficiency, Population size, Predictive capabilities, Spontaneous order, State Owned Enterprises (SOEs), Trading services, Urban economy and growth

The City of Surreal Ramaphosa on the banks of the Rubicon

Johannes Wessels
@johannesEOSA1

Cyril Ramaphosa’s vision of “a first post-apartheid city with skyscrapers, schools, universities and factories” (if implemented) has all the potential of becoming a disastrous social engineering experiment wasting resources on a massive scale. Not because the idea of a new city is wrong per se, but simply because the president is ideologically wedded to state-led development, holding a very negative view of the role of the private sector.

Ramaphosa doesn’t consider the private sector as efficient or more effective than the public sector, despite the fact that State-owned enterprises are mismanaged, bankrupt and a drag on economic development with Denel and the SABC even struggling to meet salary commitments.

Peas of the same pod

The creation of such a city is, in the Ramaphosa framework, not a vision of dynamic economic growth, but an ideological blinkered perspective of how government can improve society. Ramaphosa and all the social engineers within the ANC are, in that sense, not far from the approach of Hendrik Verwoerd. The National Party was, just like the ANC, a force pursuing transformation through prescription and limitation of choices.

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Anti-poor, Cities, CITIES, TOWNS AND SETTLEMENTS, Construction services, Consumer-led development, Demographic-entrepreneurial relationships, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Enterprise regularities, Enterprise research, data and statistics, ENTERPRISE SECTORS, Entrepreneurial space, Local economic development (LED), Population size, Predictive capabilities, Pro-poor strategies, Trading services, Urban economy and growth

Pro-poor LED fails our cities, towns & the poor: Enterprises of the right kind generate city growth

Johannes Wessels
@johannesEOSA1

There is an intriguing symbiosis between cities and towns on the one hand and enterprises on the other. As the world population urbanise, so are business activities.

Physicist Geoffrey West in his “Scale:  The Universal Laws of Life, Growth and Death in Organisms, Cities and Companies” says based on city growth one can state precisely what will happen with the number of businesses in that city: a doubling of population does not require a doubling of grocery stores or filling stations, economies of scale kick in in a predictable manner. The reverse is also true.

Geoffrey West & Scale

Unfortunately, South Africa’s economic and enterprise development policies and strategies ignore these predictable realities. In addition, LED plans by municipalities in the main demonstrate a lack of understanding of what drives development.

Continue reading “Pro-poor LED fails our cities, towns & the poor: Enterprises of the right kind generate city growth” →