Fix the economy stupid and provide free education (part 4)

SOUTH AFRICA is an astonishing country. Not only are we home to more millionaires than any other African country, (40% of all African millionaires live in South Africa) but this wealth coincides with extremes of poverty and unemployment. Some 25.5 percent of the population is unemployed and this figure is worse when the youth and first-time job-seekers are concerned, rising to 63%.

The reason why this picture is so, is not all that difficult to understand.

Let’s talk about the welfare disconnect. Although the country is one of the few nations on the continent to have implemented a social security programme, this programme is geared towards the elderly, disabled and child care grants. Thus the youth of today, are born into social security — their parents are recipients of state welfare not because they are citizens, but because they have children.

Once a child is over the age of 18, this grant falls away. The double-whammy of unemployment and poverty kicks in.

Today’s student unrest is a direct result of the situation where a pupil, having generated income for his or her family, simply by being a child, turns into a liability on becoming a young adult and tertiary student. In most cases, such a person is forced to fend for him or herself.

This is an enormous shock to both the youth and the family.

So far as social security in South Africa is concerned, we are a nation which has the cart before the horse.

The Focus on Labour at the expense of the Market

Command economies have failed wherever they have been attempted. Creating industries, whatever the cost, in order to create jobs, instead of producing efficiency, achieves the exact opposite. Labour for the sake of labour, is tremendously wasteful. Wherever it has been a state policy, communism has resulted in economic distortions and failure to deliver goods. Shifting the goal of humankind towards labour is therefore an exercise in futility.

Instead of paying families to have children, we should be paying people to stop working.

A social wage, comprising an unconditional basic income grant, health care and free education, would be the means by which the worst ravages of poverty and last vestiges of coercive labour was removed from our society.

The coervice labour market is a legacy of the apartheid system, which was dependent upon a labour pool, where workers were treated as nothing more than a resource to exploit. This situation has not improved under the ruling party, in fact it has gotten far, far worse. BRICS under Gwede Mantashe, has birthed South African sweatshops producing goods for Russia, low-wages and a shrinking Rand have become a factor of life.

Instead of forcing people into employment (or joblessness as the case may be). A social wage would redistribute income to each and every citizen, not by virtue of being a child, but by virtue of ones ability to vote.

Leisure should be our goal, not labour.

Labour should only be a means of achieving other goals.

Making goods should go hand in hand with Buying Goods. While Henry Ford may have had his faults, he produced cars for the workers who worked in his factories, not for the wealthy elite.

Citizens should thus be more than simply workers, they should be treated as adults and consumers.

While labour has certainly contributed to better work conditions — the invention of the long weekend, and other public holidays — it would be even better if labour were to permanently depose itself, by creating a 360-day-Vacation. Allowing robots to self-assemble and produce the goods, which we buy with our wages, which are in turn given to us, via a more efficient means of production and redistribution of wealth, This is an alluring proposition. Holland for instance had moved to end labour in mining. Machines are replacing humans wherever they are found, and the full automation of society is only a matter of time.

See Part 5

Fix the economy stupid and provide free education (part 2)

SOUTH AFRICA’S YOUTH are experiencing an economic disconnect. A generation faced with a world without jobs,  a massive debt burden, and an economy that has failed miserably to gear itself up for the third wave technologies that Asia and the West have embraced decades previously.

While you were out striking, marching or simply shopping, the world evolved, from a bipolar economy, dependent upon China and the USA, to a multipolar universe —  an economy without a centre.  The rise of the Information Economy — based as it is on information freedom, has been coupled with successive innovations. The Third Industrial Revolution has produced a ‘post-scarcity economy’, where having a ‘China on ones Desktop’, a 3D printer capable of printing anything, is considered de rigeur.

Successive waves of innovation have seen — the virtualisation of the economy, the dematerialisation of assets and the Internet’s proverbial death-of-distance. Pop-up factories, makerspaces, friction-free digital copies and the Internet of Things are all buzzwords and terms which the youth are invariably going to meet on their journey. In the future, your neighbour will hand you a copy of an open source motorcycle, just so the two of you can go for drive. When you return, you will recycle the vehicle into any number of other open source devices.

South Africa’s youth can work and play, just about anywhere there is an Internet connection or icafe, but getting connected to the Net is not sufficient to enable jobs and education. There are other necessities, common to first world economies which we lack as a nation, and without them, being merely connected, is simply not good enough. In fact, a job, as an end in itself, may not necessarily be all that desirable, the same way that owning anything in an economy based upon abundance, is not the alpha and omega.

How did we get here? Let’s take another look at our economy and the problem of state expenditure already covered in part 1.

Instead of taking heed of the lessons learnt via the unbundling of state enterprises, during the very first decade of democracy, the ruling party, hamstrung by labour and its SACP partners, took an anti-liberalisation view of government, and its role in the economy. Preserving the ‘dirigiste economy’ at all costs and accumulating wealth for the state, come what may. Could the money gained from taxation and investment by the Public Investment Corporation (PIC) have been better spent on education, health, and social welfare?

The terrible twins of big government and rampant state expenditure (on dubious projects) has all contributed to the nation-wide malaise,  a combination of student protest and declining fortunes.

Increasingly the grand state under Jacob Zuma, brokered in response to anti-market opposition groups such as the Economic Freedom Front*  has loomed large on the agenda. Big government has in turn placed a massive weight on the public purse.  The slow-motion train crash, in which an increasingly belligerent left, places the brakes on growth, calling for an end to Neoliberalism (and even the marketplace), in order to accommodate a National Development Plan (NDP), better suited to a nineteenth-century economy — one based upon resource exploitation — has meant that there are very few options open to the central bank and Minister of Finance.

Like oil-rich nations such as the United Arab Emirates (UAE), South Africa’s mineral wealth was not going to last forever. Strikes in the platinum sector have proven, that even a reduction in output is not enough to push up prices. Instead of squandering the nation’s wealth, it would have been better invested in a sovereign wealth fund. Like Zambia which suddenly woke up to an end in the commodity boom, and without any cash left in the bank — do we really need to diversify into religion, in order to pray for a time machine to take our economy back to the days when there was a boom? Luckily South Africa has a few other options up its sleeve.

These are explored in part three

  • * Let’s call the EFF what they are, a front for their ultra-left ideological partner, North Korean president Kim Jong-un whose policies are remarkably similar to those advocated by Julius Malema.