ECONOMIC THEORY – Page 7

Buying local, ECONOMIC POLICY AND STRATEGY, Market economy

England’s Norman Kings had a better grasp than the ANC of the importance of export for economic growth

Had the Norman kings of England in the 11th and 12th centuries a better grasp of economics than that displayed this week by Rob Davies, Minister of Trade and Industry?

In briefing Members of Parliament about Government strategy to support local industry now that Government is facing a fiscal cliff, Davies said it was unlikely to receive extra cash to support industrialisation (As the Budget bites the focus shifts to buying local… ) Government would therefore be “more vigorous” in getting value for money out by procurement of local inputs, rather than imported ones.

The strategy Davies proposed was (you guessed it!) more state control and prescriptions: Rather than pursuing growth through the tradeable sector, stimulation is sought through consumer spending with Government as the main consumer…

Continue reading “England’s Norman Kings had a better grasp than the ANC of the importance of export for economic growth” →

Accelerated and Shared Growth Initiative for South Africa (ASGISA), Black economic empowerment (BEE), Black-owned businesses, Developmental state, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, ECONOMIC POLICY AND STRATEGY, Enterprise regularities, Population size, Pro-growth strategies, Urban economy and growth, White monopoly capital theory

A Cyril Swallow does not make a Summer of Growth: How business friendly is Ramaphosa’s New Deal?

“We need to massify the creation, funding and development of black-owned small businesses, township businesses and co-operatives.” Cyril Ramaphosa’s New Deal for South Africa (14 Nov 2017).

This quote from Ramaphosa’s 10 point plan manifesto to get the economy growing forms part of the action steps under Point 5: “we must accelerate the transfer of ownership and control of the economy to black South Africans.“

At first take the creation of an immense number of enterprises sounds like a pro-business approach. But is this objective realistic? Will it render the desired outcome? Even more basic: is it sound economics?

The New Deal is silent on how this enterprise factory that will mass-produce black-owned businesses would work. Whilst the manifesto was announced in the context of the ANC leadership contest, the “we” that Ramaphosa refers to is clearly Government and its administrative institutions. Continue reading “A Cyril Swallow does not make a Summer of Growth: How business friendly is Ramaphosa’s New Deal?” →

Culture and development, Religion and economics/Ideology and economics

A stand against hierarchical tyranny: Luther’s protest has changed the world

Luther 500 A small minority of people will be remembered and known beyond four generations (100 years): mostly by grandchildren and great grandchildren. A significantly smaller number of people will be remembered 100 years after their death for the impact they have had on developments in their countries. The fact that Martin Luther’s protest half a millennium ago against Papal indulgences and Roman Catholic theology and the Emperor was celebrated last week in Germany and most countries with a significant number of Christian believers, testifies to his role in breaking the mould of Medieval society contributing to the dawn of the Modern Era. Continue reading “A stand against hierarchical tyranny: Luther’s protest has changed the world” →

ECONOMIC THEORY, Marxist-Leninist ideology, Religion and economics/Ideology and economics

The Hammer and Sickle 100 years on… A legacy with larger atrocities than achievements (and lessons for SA)

A starving Ukrainian boy 1933

The focus in South Africa is so much on the State Capture saga and the ANC’s forthcoming elective conference that few realise we commemorate over the next three weeks two of the most significant events that have shaped our world: the Reformation triggered by Luther’s stance against Rome 500 years ago (30 October 1517) and the Bolshevik Revolution of 7 November 1917 (known as the Great October Socialist Revolution). Both had far-reaching implications for society as a whole, also for the world of enterprise. (Luther’s legacy will be assessed in a subsequent contribution.) Continue reading “The Hammer and Sickle 100 years on… A legacy with larger atrocities than achievements (and lessons for SA)” →

Enterprise regularities, Enterprise richness

Enterprise regularities are probably universal

Do the regularities in enterprise dynamics observed for South African towns and municipalities also occur elsewhere? The U.S. Census Bureau has publicly available data records that allow a quick examination of this question. The data records of counties in the USA, entities for which a range of different measures are available, were downloaded. These included the number of establishments and the number of employees per establishment. The first ten counties of the first State in the data record, i.e. Alabama, were used for a quick comparison. Continue reading “Enterprise regularities are probably universal” →

CITIES, TOWNS AND SETTLEMENTS, Demographic-entrepreneurial relationships, Enterprise regularities, Enterprise research, data and statistics, Free State, Large towns, Medium sized towns, Orderliness, Population size, Small towns

Zipf’s law and South African towns

An important question has exercised the minds of many economist over time: why are there differences in the sizes of different towns? For instance, why are all towns in a region not of equal size? The answer has to do with power laws.

There is no Hobbesian significance in the word ‘power’ – it is just a mathematical term. If the value of some quantity q depends on the value of another quantity x according to a power-law relationship, this means that each time x is doubled, y increases by some constant factor (Ball, 2005).

Continue reading “Zipf’s law and South African towns” →