GAUTENG
COMMENT, by Pete Bower
MAGAZINE
HOW TO MAKE YOUR PLOT PROFITABLE
Vol 18 No 5
May 2017
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FRONT COVER
A neat alternative to a trailer, and you
can load it at ground level before
lifting. Tractor mounted platform for
moving bales, feed, manure, sand etc.
Scary sloganeering
P
erhaps because of our previous education system which,
concentrating as it did on learning by rote, does not encourage
critical thought, ordinary South Africans are far too unquestioning
when politicians come up with catchy slogans or “clever” ideas.
Two such examples, that have been much in the news recently, are “radical
economic transformation” and “white monopoly capital”. That the ruling elite has been
bandying these phrases about unchallenged or at best with so little ridicule says much
about our lack of critical thought.
Which is a pity because those who use these phrases, and many more like them,
should be roundly derided … laughed out of court, in fact. For at best such phrases are
totally meaningless. At worst they are downright dangerous.
Take the notion of “radical economic transformation” so beloved by Mr Zuma and his
new finance minister. Any first-year student of economics will tell you that a functioning
economy is like a machine of many parts, all operating interdependently, yet all
achieving different outcomes. Thus, if you fiddle with one part it may well affect
another, seemingly unrelated, part. And all economies function in relation to other
economies, notably those of one's trading partners. As a quick example, if our central
bank raises the interest rate it makes life more expensive for those individuals or
businesses who wish to borrow money. That means they must increase the price at
which they sell whatever goods or services they provide, adding to the possibility of
higher inflation, among other things. On the other hand, a higher interest rate makes it
possible for those who have money to invest to earn more. And if our interest rate is
very much higher than that in other economies foreigners will view us as an attractive
country in which to invest, ratings agency downgrades notwithstanding.
Thus central bankers play a delicate game every day to juggle the numbers they can
control, for example the interest rate, in an effort to positively influence or at least not
harm, those numbers that they can't control.
The point is that doing something drastic, something “radical”, to change the economy
is not in the nature of a sensible economist. Now we know that South Africa is the
most unequal society on earth, and we all pretty much acknowledge that steps must be
taken to uplift the poor and make their lives easier, while not killing the goose that lays
the golden eggs among those at the other end of the spectrum. But doing something
“radical,” whatever that may be, will simply destroy the whole economy, and ruin the
country. Think Zimbabwe.
So when politicians such as Messrs Zuma and Gigaba rattle on about “radical economic
transformation” we should not let them off the hook unchallenged. We should want to
know exactly what it is they have in mind, if they have anything at all in mind, that is.
Of course, if you are a politician, using the phrase “radical economic transformation” in
the same sentence as “white monopoly capital” can conjure up a wonderous bogey-
man in the minds of uneducated voters. For, if you push the notion of “us” versus
“them” in which the “them” are the hated “white monopoly capital” class it is not
difficult to get the downtrodden masses on your side.
So let's look at the notion of white monopoly capital. It is a convenient little racist ploy
to bandy about the idea that South Africa's wealth is in the hands of the white minority.
While outwardly it may appear so, digging deeper, for example into the shareholdings
of public companies listed on the Johannesburg Stock Exchange, shows tha t the
proportion of identifiable black stock ownership is now not much less than that of
identifiable white ownership, and it is a devilishly difficult number to compute because
of the interrelationships between companies. This, of course, is exactly as it should be
even if it has come about through the artifice of black economic empowerment, which
has made a few pigmentally-blessed individuals very wealthy, rather than benefiting the
masses of the poor.
And the notion that the country is being held to ransom by a kind of “monopoly” is
also nonsense. A monopoly exists when one company has total control over its
industry, and is therefore able to set prices, product characteristics, supply quantities
etc, unfettered by the possibility of outside interference. Clearly, this does not happen
in the greater South African scene, if for no other reason than because the Competition
Commission would prevent it.
Radical economic transformation and white monopoly capital take their place along-
side the infinitely more dangerous notion of state capture by Zuma and his acolytes,
and their puppet-masters of the Saxonwold shebeen (Thank you, Brian Molefe, for that
expression).
SAY YOU SAW IT IN THE GAUTENG SMALLHOLDER