Fallacy of radical economic change
It never ceases to amaze me that those calling for radical economic transformation focus on what is working — the free market economy — and find fault with it, wishing to replace it with greater state (ANC) control.
That includes nationalisation of the Reserve Bank, expropriation of land without compensation and changing from a neoliberal market economy to something else — socialist, communist? I am not sure, as there is so much talk.
Considering how badly the very people criticising the free market economy, or white monopoly capitalism as many call it, are managing state owned enterprises (SOEs) such as Eskom, SAA, SABC, to name a few, how will they ever ensure a well-oiled alternative to what we now have?
Our economy was in a mess before we were hit with the coronavirus pandemic and subsequent lockdown, but now is in an even worse state.
The government, as a result of borrowing huge amounts to survive the economic crisis created by the pandemic, now has the twin problems of having to service (pay back) the debt, which takes up a large portion of the budget, plus having to assist the vast number of needy citizens.
Where the greedy politicians like the former state president Jacob Zuma and many others once seemed to think there is no end to this country’s wealth, which they could squander, it is now dawning on them that there is not much left for them to commandeer on the one hand, but worst of all to provide services with.
Some are saying that the solution is what economists call quantitative easing or printing money for the government to buy its way out of the crisis.
Fortunately, the Reserve Bank is the source of money supply in SA and it uses intricate formulas to determine how much money to place in circulation to sustain the economy and to remain within the inflation parameters set for the country.
That is why “they” want to nationalise the Reserve Bank and change its mandate from controlling inflation to increasing employment.
The danger with printing money like they did in failed Zimbabwe is that the money loses its value and inflation runs wild.
So uncontrolled printing of money for the government to buy its way out of the crisis is a precarious way to go.
Quantitative easing has worked in well-controlled economies but the warning is loud and clear that it will not work in countries where corruption abounds.
You can decide for yourself if it will work here.
One would think that those calling for radical (sometimes called revolutionary) economic transformation would see the irony of the mess being made of SOEs by their deployees, and their demand for more control of private enterprises that are successful, by the very people who are not succeeding in running SOEs.
It defies all logic. Put differently, it is absurd.
Does it not embarrass them and their followers?
According to Tom Eaton, “Embarrass the ANC? Come off it!” (The Herald 8 July), nothing embarrasses the ANC, and he may have a point.
He mentions the billions allegedly stolen by the Zupta regime, the collapse of municipalities and the beating to death of civilians by the
SANDF, which appear not to have caused an iota of embarrassment for the ANC.
Where there is no embarrassment, there is no pride. Where there is no pride there is no quality of output and is that not evident in all that falls under ANC control — the public service (central, provincial and local government) plus SOEs?
Shoddy is good enough. The result is big-time non-service delivery followed by denials and lies. It is shocking, but where there is no pride, there is no concern.
Where there is no concern one finds complete indifference, and with indifference comes a failed state, but all that will be denied as the face mask is pulled over the eyes to be a blindfold.