Grievance economies breed faulty forces
In October, I was invited to give a talk at the annual meeting of the African Economic History Network held in Stellenbosch. One of the talks I attended, by Felicitas Becker, was entitled Rural Innovation and Institutional Amnesia in Lindi, Tanzania. This research illustrated the importance of economic history, especially in the context of developing countries, where the same flawed ideas about externally driven development persist generation after generation. Becker examines some of the reasons for this in her study.
Democratic SA is only 23 years old, so expectations and aspirations must be tempered by a dose of realism. However, it is never too early to ask if the country is on the right path, as my talk did.
I am reminded of a conversation I had with a friend about postapartheid economic regulation. The competition authorities have developed a good track record for busting cartels. Yet this friend was concerned that the postapartheid government was destroying the food value chain with its emphasis on market competition. He questioned the end of centralised marketing of agricultural produce through the various industry boards.
Until the early 1990s, the apartheid government ran a robust, interventionist and centralised agriculturaldevelopment programme.
My friend’s message was simple: remember how the Afrikaners did it. Why was the new government not doing the same for black farmers and food producers?
This is a very powerful theme that emerges in discussions on economic development and empowerment. Afrikaner capitalism is held up as a model for how a group of people used the state to advance their economic interests.
Let’s take the idea of the black bank. For some time, there have been advocates for the creation of a bank that would be sensitive to the needs, and the constraints, facing black people who would like to have access to financial services, especially credit. The incumbent banks face criticism not only for their fee structures, but also for the perception that they are not willing to advance credit to black entrepreneurs.
The conservatism of financial enterprises is seen as a reflection of the biases of decision makers who are not sensitive to the economic circumstances of the typical black entrepreneur. Would a black-owned financial services entity not do for black people what Sanlam or Volkskas did for the Afrikaner community?
These arguments are informed by an idealised understanding of the country’s recent economic history. Attempts to draw lessons from volkskapitalisme run the risk of reproducing old habits.
There is some debate about the nature of volkskapitalisme. Indeed, elements of it were about co-operatives and selfhelp. Yet the economic demands of Afrikanerdom, infused with grievance after wars, underpinned the creation of a violent and extractive economy.
This is the cautionary tale that should come to the fore — how woundedness can be marshalled in the service of elite advancement. Could this happen again in SA?
What postapartheid SA demands – economic mobility based on open, inclusive institutions and equal opportunity – is something South Africans have never witnessed. There is scepticism at the idea of a society that frees the potential of each citizen as the Constitution demands.
A history of racial capitalism has taught us that identitybased, state-centred economic strategies deliver results. Exploiting this experience, a network of interests has captured the state at the expense of broad-based economic development. We need economic historians to help us interrogate the past and warn us when it threatens to defeat us.