The Red Queen said to Alice: “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” 1 This advice also seems to hold for the Cigarettes and Whisky Conundrum of South African communities.
Nel and Rogerson (2016) reviewed Local Economic Development (LED) policy and practice in South Africa. They reported that results have been modest despite the significant support for nearly 20 years put into applied local economic development. They suggested that a potential over-focus on pro-poor local economic development at the expense of simultaneously working with the private sector on pro-market interventions, could be a stumbling block to the potential success of LED.
Mason (2018) stated that poverty is a multifaceted phenomenon and the condition of poverty often entails one or more of these realities: a lack of income (joblessness); a lack of preparedness (education); and a dependency on government services (welfare).
I asked if our research on enterprise dynamics that reported a wide range of regularities in the enterprise structures and dynamics of South African towns and municipalities (some of which have already been discussed here) could help to shed light on a question whether a pro-poor LED stance might be justified.
Will the honeymoon breathing space of optimism that the worst corruption is over and that more business-friendly policies and better public spending behaviour be utilised or wasted? With new reports of the ANC’s national executive committee setting wheels in motion to recall Zuma as president, it is important to note that acting against Zuma would still not set enterprise friendly policies in place.
South Africa’s post-apartheid ANC policies and strategies dealing with enterprise development have been largely driven by an increasingly unfriendly framework for established businesses as well as an anti-growth premise. In the final gasps of December 2017, the ANC Conference even took unanimously policy positions that makes mockery of Ramaphosa’s utterances of making growth the priority.
The decisions to endorse Zuma’s announcement on free tertiary education and to change the Constitution to enable expropriation without compensation, provide ample proof the ANC doesn’t understand what is required to ensure growth and to step back from the fiscal cliff.
500 Years after Martin Luther hammered his 95 theses to a church door in Wittenburg, Davide Cantoni, Jeremiah Dittmar and Noam Yuchtman saved their theses to the internet: Beliefs have economic consequences.
Old news, one might say, recalling Weber. But Weber’s thesis was always contested: assumptions of cultural traits based on unreliable statistics from the 19th C. Cantoni, Dittmar and Yuchtman (further-on Cantoni and co.) offer hard micro-statistical evidence from the century when Luther protested against Papal authority : 1517 was a watershed year in how people viewed the world and those (world)views had economic consequences.
In a National Bureau of Economic Research Working Paper of October 2017 they state: “the pre-Reformation era can be understood as an equilibrium in which a monopolist religious producer (the Catholic Church) provided political legitimacy to secular authorities at a high price—charged in the form of control over resources, tax exemptions, and some degree of political power. The Reformation represented a competitive shock in the market for salvation. Protestant reformers offered a popular, lower-cost alternative to the Catholic Church… This had implications for the allocation of resources between secular and religious uses…” Continue reading “The economic consequences of Luther: Ideas have legs, but some come with leg-irons”
When Nkosazana Dlamini-Zuma announced her Manifesto for Change, she reminded me somewhat of the stern Mother Abbess singing “Climb every Mountain” for Maria (Julie Andrews) in The Sound of Music.
Definitely not her voice, but her words… Dlamini-Zuma summoned support for Radical Economic Transformation (RET): “We must know which hills to tackle next. …(t)hese are the mountain of economic transformation, the highland of land redistribution and the summit that must see us educating and skilling our people. If not, the negatives will swallow the gains we have made.”
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…