This post is in response to UCT professor Harro von Blotnitz who replied to my comment on a recent The Conversation article "South Africa won't create jobs unless it settles on a new social compact". Von Blotnitz asked how we can use South Africa's history to create jobs. I wrote:
I’m loathe to give advice about what should be done to get things “back on track” (was it ever on?) because the ANC government and big business who have the power to make the necessary changes have consistently refused to do so despite possible, likely solutions to growth, development and employment been well-known.
Further, beyond whatever ideology – Minerals Energy Complex/pure capitalist, socialist, National Democratic Revolution and now state capture – is prevalent at any one time, there’s a mindset, a conditioning, to accept things as they’ve been as the normal way of doing business. I’m pessimistic because I believe it’s hard to undo – a form of brainwashing, I suppose.
This is proven by yet another Jobs Summit. Since 1994 there’ve been more than a dozen economic, poverty and job strategies (I’ve not counted but Alan says four jobs summits) which did nothing to change the structural defects of the economy that started in 1994 with MEC v2.0, i.e., the post-apartheid economic model.
They failed to significantly shift modest 20-year economic growth of around 3.5% and stop the decline to below 1% since 2011, and reduce the high unemployment, now 27.2%, the 14th highest in the world. This is nowhere near the 6%-plus the NDP said was sufficient to grow the economy and peer-nations achieved before the 2008 financial bust and east African countries (and other) are presently meeting.
But time and again the ANC government et al choose this anodyne talk, talk approach rather than the difficult measures that have a good likelihood of bringing desired results within 10 but realistically 20 years.
Over the last two years I’ve written a number of articles (Politicsweb) that discusses these matters in a general way. I indicated necessary, hypothetical macroeconomic measures. But there’s no magic bullet as the ANC and liberal-left including many academics think, e.g., more strategies, jobs fund, social grants, wage subsidies, public work programmes and minimum wages that don’t and won’t have the desired effect. I’ve cited people like Greg Mills who suggest sure-fire ways that have worked in equally or more difficult circumstances than this country. And I’ve eschewed politically correct thinking that inhibits many of South Africa’s intellectuals and decision-makers who are part of the problem to finding workable solutions.
Perhaps it’s a cop-out and waffle to avoid answering the question on how to use SA’s history to create jobs. But believing a magical solution exists for SA’s 10 million unemployed is a non-starter. Ann Bernstein wrote about this recently (and here) in relation to the Jobs Summit. She said inter alia the minimum wage was an obstacle to creating entry level jobs that may absorb some of these people.
We must face facts that at this stage of the country’s economic development, it has the right number of economically productive people and the unemployed – most of the 10 million people – are surplus to requirement.
Those who are long-term unemployed and have never worked or are elderly unemployed (50 years and over) may never find a permanent job. We should not waste time with deluded make-believe jobs that aren’t there. I’d include the wage subsidy and public works programmes.
That public admission would be untenable for the ANC government – an election loss, which anyway, the cosmetic Jobs Summit is solely designed to help avert. But I think the unemployed will shrug it off; they know they’ve been forgotten and were always marginalised.
Hypothetically, and assuming the ANC would listen, a number of steps must be taken stretching over a number of years, but the sooner the better; immediately in fact. These have been frequently spoken and written about including by Mills et al so I won’t repeat it except to say the worst, most inhibiting sections of labour legislation including BEE and affirmative action and regulatory barriers to entry across all economic sectors must be removed or moderated.
There must be a commitment – not just talk – to private sector competition and if necessary, government must threaten firm action against high prices and anti-competitive practices, the latter which technically is already in law but which they often appear reluctant to wield.
The incestuous relationship between government, unions and business, especially cadres and big business, must end immediately – as I said, no more BEE which Terreblanche and Mbeki spoke of with particular revulsion.
Which brings me back to the MEC. I think Terreblanche meant MEC in a broader sense than only mining. Remember, prior 1994 mining was South Africa’s predominant industry and the mining oligarchs controlled most of the economy.
I’m not overstating it to say that at the dawn of democracy the MEC was a significant factor in and to the economy. It was the model, the apartheid monster reborn if you will, that moulded the nascent post-apartheid model in its image, with BEE and the concentrated high-cost, high-profit economy being its little monster offspring, the new generation spawned.
But SA’s leaders seemed to be repeating history, refusing to learn from it a bit like the character in the book “All You Need is Kill” by Hiroshi Sakurazaka aka film “Edge of Tomorrow”.
I’m loathe to give advice about what should be done to get things “back on track” (was it ever on?) because the ANC government and big business who have the power to make the necessary changes have consistently refused to do so despite possible, likely solutions to growth, development and employment been well-known.
Further, beyond whatever ideology – Minerals Energy Complex/pure capitalist, socialist, National Democratic Revolution and now state capture – is prevalent at any one time, there’s a mindset, a conditioning, to accept things as they’ve been as the normal way of doing business. I’m pessimistic because I believe it’s hard to undo – a form of brainwashing, I suppose.
This is proven by yet another Jobs Summit. Since 1994 there’ve been more than a dozen economic, poverty and job strategies (I’ve not counted but Alan says four jobs summits) which did nothing to change the structural defects of the economy that started in 1994 with MEC v2.0, i.e., the post-apartheid economic model.
They failed to significantly shift modest 20-year economic growth of around 3.5% and stop the decline to below 1% since 2011, and reduce the high unemployment, now 27.2%, the 14th highest in the world. This is nowhere near the 6%-plus the NDP said was sufficient to grow the economy and peer-nations achieved before the 2008 financial bust and east African countries (and other) are presently meeting.
But time and again the ANC government et al choose this anodyne talk, talk approach rather than the difficult measures that have a good likelihood of bringing desired results within 10 but realistically 20 years.
Over the last two years I’ve written a number of articles (Politicsweb) that discusses these matters in a general way. I indicated necessary, hypothetical macroeconomic measures. But there’s no magic bullet as the ANC and liberal-left including many academics think, e.g., more strategies, jobs fund, social grants, wage subsidies, public work programmes and minimum wages that don’t and won’t have the desired effect. I’ve cited people like Greg Mills who suggest sure-fire ways that have worked in equally or more difficult circumstances than this country. And I’ve eschewed politically correct thinking that inhibits many of South Africa’s intellectuals and decision-makers who are part of the problem to finding workable solutions.
Perhaps it’s a cop-out and waffle to avoid answering the question on how to use SA’s history to create jobs. But believing a magical solution exists for SA’s 10 million unemployed is a non-starter. Ann Bernstein wrote about this recently (and here) in relation to the Jobs Summit. She said inter alia the minimum wage was an obstacle to creating entry level jobs that may absorb some of these people.
We must face facts that at this stage of the country’s economic development, it has the right number of economically productive people and the unemployed – most of the 10 million people – are surplus to requirement.
Those who are long-term unemployed and have never worked or are elderly unemployed (50 years and over) may never find a permanent job. We should not waste time with deluded make-believe jobs that aren’t there. I’d include the wage subsidy and public works programmes.
That public admission would be untenable for the ANC government – an election loss, which anyway, the cosmetic Jobs Summit is solely designed to help avert. But I think the unemployed will shrug it off; they know they’ve been forgotten and were always marginalised.
Hypothetically, and assuming the ANC would listen, a number of steps must be taken stretching over a number of years, but the sooner the better; immediately in fact. These have been frequently spoken and written about including by Mills et al so I won’t repeat it except to say the worst, most inhibiting sections of labour legislation including BEE and affirmative action and regulatory barriers to entry across all economic sectors must be removed or moderated.
There must be a commitment – not just talk – to private sector competition and if necessary, government must threaten firm action against high prices and anti-competitive practices, the latter which technically is already in law but which they often appear reluctant to wield.
The incestuous relationship between government, unions and business, especially cadres and big business, must end immediately – as I said, no more BEE which Terreblanche and Mbeki spoke of with particular revulsion.
Which brings me back to the MEC. I think Terreblanche meant MEC in a broader sense than only mining. Remember, prior 1994 mining was South Africa’s predominant industry and the mining oligarchs controlled most of the economy.
I’m not overstating it to say that at the dawn of democracy the MEC was a significant factor in and to the economy. It was the model, the apartheid monster reborn if you will, that moulded the nascent post-apartheid model in its image, with BEE and the concentrated high-cost, high-profit economy being its little monster offspring, the new generation spawned.
But SA’s leaders seemed to be repeating history, refusing to learn from it a bit like the character in the book “All You Need is Kill” by Hiroshi Sakurazaka aka film “Edge of Tomorrow”.
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