When elites block growth

Why did nearly all societies stumble badly when confronting Covid? Why did the virus swiftly mutate in isolated South Africa whereas this country’s stand-offish economy continues to lag adoption of major global developments? 

In the recently ended three-decade post-Cold War period, global integration ignited an unprecedented surge in prosperity. While worries of a third world war were pummelled, poverty plunged, particularly in Asia. 

The era also witnessed the internet devastating revenue models of traditional media houses while forcing them to compete with a multitude of online options. Across the West and beyond, news reporting fragmented at the expense of centrist, non-partisan coverage. 

Audiences and news providers reconfigured themselves such that the reporting and interpreting of news routinely validates insiders by judging outsiders. Provoking, and then feeding, partisan expectations spurred a habit-forming loop favourable to media company revenues. 

Ubiquitous social media further reinforces such judging by conditioning us not to seek knowledge and understanding to advance solutions, but rather to consider clicking a thumbs-up or thumbs-down icon. Perhaps those are the twin icons which symbolise this highly judgemental era.

This shift was well received as, for most people, it is prohibitively burdensome to develop an astute and up-to-date worldview. Yet, amid increasingly rapid and highly disruptive economic shifts, democracies require such efforts for voters to assess competing solution paths and their complex trade-offs. 

Pandemic

Societies’ many ineffective responses to the pandemic did not trace to inadequate information gathering. AI technology is rapidly approaching the point where it will be able to look back and tell us when individual countries had sufficient information to guide well-informed policy decisions. 

What AI won’t soon answer is how societies should have balanced the severe threats to their older citizens with the harm of lockdowns to mental health generally and the costs to children’s social development and educational progress. There was nothing new about a pandemic creating intergenerational trade-offs. What the Covid pandemic demonstrated is the modest ability of today’s societies to assess and manage complex trade-offs.

As today’s news flows so often follow a format where a vantage point is created to criticise outsiders, instead of the pandemic engendering a sense of shared purpose, societies split between ‘vaxxers’ and ‘anti-vaxxers’. Media’s reduced commitment to objectivity made it that much harder to know who and what to believe.

Isolated

Irrespective of how virologists might explain the virus’s rapid evolution in South Africa, it highlighted how this country is a largely isolated, yet strategically located, laboratory ideal for testing and advancing solutions. It is similarly useful to see South Africa as being home to millions of unemployed young adults who resemble isolated, underutilised production centres. 

Our 1994 transition from apartheid always needed to progress toward intense global integration depicted by a high portion of our young adults adding value within global supply chains. Instead, as the East and West benefited immensely from weaving their economies together, our new-era political aristocracy entrenched its power as today’s Western media and university elites do, through self-servingly shaping how people frame issues.

The ANC didn’t have to create insider and outsider groups or stoke outrage about the oppression of long-deceased people. The stark black-white divides were obvious and many of the previously oppressed were present. Moreover, the party was led through the transition by someone who had earned immense global respect as a genuine social justice warrior.

The ANC’s ascension led to its sudden, and dangerous, domination of both our parliament and how our social justice lenses are calibrated. These conditions led to South Africa serving as a real-life laboratory to test the policy indulgences favoured by the left.

After auditioning various words and phrases, the ANC found that ‘racial inequality’ offered exceptional political purchase. The insiders’ incomes and assets were far less than those of the outsiders. This politically pulsating fact could justify many policies. But was it useful for setting goals or informing solutions?

As South Africa now has more high-income blacks than whites, the term has been abbreviated to ‘inequality’. Meanwhile, ANC policies have provoked a youth unemployment crisis so severe that only those of failed states are comparable. 

The political elites who seek to frame our values sit atop a massive patronage network while a majority of twentysomething South Africans have been permanently marginalised. Prospects for the next waves of school leavers will be no better. We live amid a highly globalised economy where segregation precludes adequate growth. 

AI

Whether battling pandemics or economic hardships, we need objective reporting to inform solutions and balance trade-offs – while prioritising our young people.

Perhaps AI will soon increase access to, and the prevalence of, accurate, objective journalism. AI and other technological advances are poised to disrupt many sectors while reconfiguring demand for labour.

The number of hours worked to achieve an attractive living standard is likely to decline sharply due to AI and other productivity-enhancing developments. Many affluent workers have shown a preference to work fewer hours or retire earlier. Conversely, youth unemployment in low-income households should drop sharply.

Young workers

During the post-Cold War period, declines in communication and transport costs encouraged the arbitraging of lower labour cost and regulatory burdens leading to phenomenal East-West economic integration. Today’s disruptive technologies favour young workers, and most affluent countries have old populations.

Demographic, technological and even geopolitical trends point toward this cold war integrating African and Western economies. This however doesn’t suit the power play of media and university elites – or the autocrats that their biases end up favouring. They shape debates and policies by insisting that the under-performance of some groups be attributed to historical injustices. 

Today’s Western discourse about slavery has been made more contentious. Legislators debate reparations. Here in South Africa, social justice and economic development have been similarly conflated. This has benefited this era’s elites while condemning a large majority of today’s young South Africans to perpetual poverty.

Reparations don’t work; intercontinental desegregation does. As with the rise of Asia, internationally focused entrepreneurs must overcome geographic mismatches between the largest consumer markets and the largest concentration of underutilised young workers.