-Nov 1, 2021

Daily Friend

The marginalisation of most of our young adults is neither economically viable nor morally defensible. It reflects two forms of elitism. 

The same evidence which justifies BIG programmes on humanitarian grounds also signals a nation destabilising. When reaching thirty without ever having been employed becomes routine, much of the damage to lives, and the country’s growth trajectory, becomes irreparable.

Borrowing money to feed desperately poor people will not spur growth or employment. A multiplier effect is wishful thinking as grants for the poor don’t address the policies which block growth. 

That we are now considering having government provide ongoing subsistence payments to millions of working-age adults traces to our economic policies and practices having long been dismissive of globally determined success factors and performance standards. In today’s highly integrated, intensely competitive global economy, a nation’s prospects are determined by the productivity of its workforce.  

‘Give a man a fish, feed him for a day. Teach him to fish and you feed him for a lifetime.’ This pithy saying suggests that subsistence living is an acceptable outcome. 

For the ANC to believe that a necessarily small monthly grant will be a godsend to poor people, enabling them to live a subsistence existence for which they will show their gratefulness at the polls, is to suggest that subsistence living is an acceptable policy goal.

Nearly all countries in all other regions aspire to, and achieve, significantly superior outcomes. People who fish, farm or code must create a prosperous business or be employed by one. 

Having the masses live subsistence existences dependent on the government, or nature, suits the ANC elites – who live lavishly. Our BIG debates must therefore examine why the state can’t feed, educate or spur job growth for the millions of South Africans who are food-stressed. 

Sweeping shifts

Rising global living standards trace to productivity gains from combining scientific and commercial advances. Among other sweeping shifts, the relevance of borders and distances has evaporated. Conversely, the ANC wants to run South Africa as an isolated fiefdom.

Our ruling party’s leaders take on the pretence of nobility. Loyalty from members of the party and their alliance partners is then purchased using government largesse and growth-retarding regulations. Such dependency on the ‘benevolence’ of political elites is now to be extended to economically sidelined young adults whose ‘unrealised’ productivity gains should be propelling the nation’s economic progress.

SA’s obscenely high, and perilously persistent, youth unemployment can be traced to prioritising redistribution at growth’s expense. Exploiting ‘inequality’ has provided cover for the rollout of a massive patronage machine which has undermined competitiveness, growth and accountability, while exacerbating inequality between blacks and whites – and between blacks and blacks.

The BIG debates now offer an ideal forum to highlight how the ANC’s exploitation of inequality is as elitist as it is destructive. South Africa’s unemployment, poverty and economic trajectory are all dire because our policies are irreconcilable with today’s global growth drivers. 

As globalisation gathered its initial momentum, our prior political regime sought to counter sanctions by expanding their constituency’s broad array of skills. Sanctions and an ability to pay for imports via commodity exports discouraged an emphasis on competitiveness and global integration. That phase of South Africa’s history is associated with legislated racism, but it also bred elitist attitudes regarding skills and education. The post-1994 government has been similarly isolationist and elitist.

Best growth prospects 

The earlier era’s legacy of education-linked elitism mixes with today’s horrific education outcomes and BEE distortions to block pursuit of our best growth prospects: accelerating economic and employment growth through adding value within global supply chains. 

There are no paths for South Africa to achieve minimally acceptable workforce participation without integrating far more intensely within the global economy. This key consideration is refuted by misconceptions such as the belief that education outcomes must be meaningfully improved before job growth can accelerate. Such views epitomise elitist attitudes blocking growth.

The binding constraint prohibiting South Africa’s economy from achieving a normal level of employment is lack of sufficient domestic purchasing power. But such a seemingly ‘technical’ consideration doesn’t gain traction within the country’s values-centric, national discourse which benefits, and is encouraged by, the ANC. 

There ought to be less inequality and there ought to be much better education outcomes.

While both are important goals, the urgent priority is to increase growth and jobs. Thus the BIG debates must now address how the ‘politics of what ought to be’ precludes high growth. 

Our national discourse indulges values-based arguments to an extraordinary extent. It is routinely presumed that only our well-educated workers are globally competitive. Such presumptions ignore the most basic of economic fundamentals: supply and demand. 

Productivity

Our meagre supply of highly productive workers are mostly employed and reasonably well-paid. Conversely, many millions of low-skilled South Africans are unemployed or under-employed. The rise of Asia was heavily reliant upon attracting young peasants to cities to add value to exports. Both employers and employees are then motivated to advance productivity through expanding skills.

The primary growth blockage is the ANC’s policies which seek to make voters dependent on government largesse. It has become clear in recent months that the ANC is incapable of dismantling its massive patronage network and the destructive economic policies which feed it, such as BEE. BIG debates must address this while recognising that the portion of SA’s workforce which is most globally competitive is the lower-skilled portion.

Elitist thinking also blocks acknowledgement of how profoundly the global economy has changed. The importance of resource extraction and traditional manufacturing is in long-term decline. Unlike in the ‘70s or ‘80s, the Middle East is an afterthought to today’s intense supply-chain tensions. The pulsating geopolitical flashpoint is Taiwan, which largely reflects its leadership in producing silicon chips.

The need to debate income grants for healthy adults stems from elitist policies and attitudes which preclude the adoption of a workable growth plan. On the plus side, such debates offer a much-needed forum to unpack why our nation’s growth blockages are self-imposed.