The hand is not invisible — it doesn’t exist
Behind every economic, financial or banking crisis are bad political decisions and deliberate actions by actual people. The idea that markets or institutions fail because of some mythical or supernatural force (or invisible hand) has become increasingly weak.
The same applies to policy making. Political actors and agents intervene, deliberately, to make or prevent policies from being made or implemented. The next president of SA will be confronted by this reality.
He will be expected to make political decisions to satisfy every sector of domestic and international society.
A lot will hinge on where he starts (what the state’s priorities are), and what he does afterwards (how policy making and implementation will be sequenced).
At home he will have to address the expectations of the unemployed, the poor, rural and urban dwellers, companies, unions and banks, as well as pressure from political opponents. My sense is that his greatest challenge, in and out of Parliament, will be the almost de rigueur politics of vituperation of the EFF, with the attendant personalised arguments, logical fallacies and the manipulation of minimal truths for maximum effect.
The next president will also have to address the expectations and obligations of the multilateral system that holds together the global political economy, from SA’s standing with credit ratings agencies to the Financial Stability Board. He will have to remain focused, also, on SA’s regional obligations.
One key to meeting at least some of these expectations is to identify, early, a set of priorities and to sequence policy making and implementation confidently. These things cannot be left to a mythical invisible hand. I recall a statement by Joseph Stiglitz, at about the time when he won the Nobel prize for economics, that government had an important part to play in the political economy (he may have said “in the economy”) and that the belief that free markets were necessarily efficient, because of some invisible hand, was largely a myth.
Nonetheless, there are probably as many priorities for the next president as there are people in SA. Most people will share the view that poverty, inequality, unemployment, food insecurity, an irregular or unreliable supply of energy, maladministration and corruption are (all) priorities. Where does one start and what does one do next? Sequencing is as important as prioritisation.
The basic argument for sequencing, apart from what may seem obvious, in practical terms, is that there should be an optimal sequence of policy formulation, reforms and implementation. This sequencing ought to follow a generally applicable set of policy and institutional changes, implemented in a predetermined order to optimise the pace and general direction of reform. Under optimal conditions this should help expand the economy — with as great an emphasis on growth as on distribution — and improve social welfare over the long term. We should probably acknowledge that everybody will not become prosperous within a week of the next president’s swearing-in.
So, one of the biggest obstacles the next president may face is purely political. It lies in the stormy politics the EFF introduced to SA, with attendant filibustering and violent altercations in Parliament and elsewhere. There has rarely been a public action by the EFF that has not resulted in some violence and/or destruction of property.
If the past two years in Parliament are anything to go by, the next president will have very little time to place the state’s priorities before the country without strategic objections or willful obstruction.
We should, of course, not single out the EFF. There are groups like the National Union of Metalworkers of SA, or that pico political party known as Black First Land First (BLF), all or any of whom may make demands they well know are impossible to meet, as part of their masterful weave of logical fallacies.
Actually, the EFF and BLF will probably consider anything but the forceful appropriation of land as less of a priority. The problem with their demands is that they build elaborate arguments and claims on minimal truths. For instance, the idea that all land is stolen is patently false. The contiguous belief that the “return of the land” is a panacea for the myriad problems that beset the country rings hollow. Without traducing the land question, the small parties with the big voices, and arguably the biggest threat to nonviolence and social cohesion, enjoy the privilege of being in opposition.
The next president does not have this privilege. He will be expected to be deliberative, innovative and, above all, restore trust in the state. There is no invisible hand to help him, but there are deliberate actions by actual people who will do their utmost to ensure the bestlaid plans go awry.
POLITICAL ACTORS AND AGENTS INTERVENE, DELIBERATELY, TO MAKE OR PREVENT POLICIES FROM BEING MADE OR IMPLEMENTED