By: Siyanda Pali
I studied Economics at the undergraduate level for various reasons. Among these, was to get an understanding of how the economic machine works, how and why societies make the policy decisions they do, as well as how societies develop.
The curriculum had plenty of meat in it: Classical and neoclassical economic theory. It featured, among others, prominent American Economist Robert Solow, who famously asked, "Why are we so rich, and they so poor?" Robert Solow went on to develop his now world-renowned Solow Growth Model, a theory of economic growth which explains how societies achieve growth rates as a function of different combinations of population growth rates, savings and technological progress in a society. This was further explained by the Augmented Solow Growth Model. Other scholars such as Mankew, Romer and Whiel also featured prominently, and made significant contributions to the understanding of classical and neoclassical economic theory.
It is perhaps common knowledge that Britain was the foremost country to undergo an industrial revolution in the 1700s, doubling its per capita GDP in 58 years. This was followed by the USA, which doubled its per capita GDP in 47 years from the year 1839. Japan was not too far behind, doubling its per capita GDP in 44 years from 1885. China reached a new lexicon, doubling its per capita GDP every 10 years since its reform period under Deng Xiaoping from 1978.
Some of the most famous countries to date which are regarded as 'growth miracles' include Asian nations such as South Korea, Singapore, Taiwan and Japan, among others. There was no explicit "East Asian Model", as these nations adopted varying national strategies. Singapore and South Korea fostered interventionism, while Hong Kong followed a laissez-faire approach. They also prized relatively stable exchange rates and economic environments, and being wary of prolonged periods of high inflation. High savings and investment were promoted. Healthcare and education were bolstered, which improved the strength of the labour force. A technocratic cohort of beaurocrats was also empowered to manage the economy.
One of the most interesting characteristics of the Asian Tigers which may not be given as much attention in neoclassical Economic theory, is the fact that nations such as China, South Korea, Japan and Taiwan all had land reform programs after World War 2. China's land reform program under Mao Zedong was perhaps the most brutal. Wealthy landowners in China were on par with formerly landless peasants. If they were fortunate enough, the former were allowed to farm much smaller plots than they had previously owned. If they weren't so fortunate , they were beaten to death.
The Cultural Revolution also had some disastrous consequences. Intellectuals experienced a baptism of fire under Mao, with many being imprisoned. This repression of the intelligentsia invariably blighted China's ability to make full use of its human capital in that era.
Of South Korea, Tony Michelle, states that "Land reform had been completed and the long-standing problem of rural unrest had been solved. Only unfavorable pricing policies prevented peasants from investing in their own land. There was a rise in demand for education at all levels. Illiteracy dropped from 78% in 1945 to 27.9% in 1960." Land reform in the above nations was a crucial bedrock for the massive increase in economic growth which followed. The relative equality in terms of ownership of assets proved to be an important step in the progress which was to be realised.
High levels of inequality do not augur well for any part of the world. The French, Russians and Americans have all had their own unique experiences in this regard. Sheryl WuDunn captures some of the geist of 19th century USA, noting that "The American dream was marred by appalling inequity, by gross manipulations of the political system, by lynchings, by bank collapses, by brutal repression of labour and leftist activists." According to the World Bank in March of 2022, my homeland, South Africa, has the world's highest levels of inequality, with 10% of the population owning more than 80% of the wealth. In direct proportion to this, the South African Department of Rural Development and Land Reform released a Land Audit report in November 2017, with its contents being a major concern. The report states that 72% of total farm and agricultural holdings by individual landowners were White, Coloureds own 15%, Indians owned 5%, while Africans, which constitute a majority of the population (around 80%) owned a paltry 4%.
Is the latter the reason behind the formation of uncouth elements such as Operation Dudula, a new far-right group which spreads anti-immigrant rhetoric and operates as a pseudo police force in South Africa's informal Settlements and townships, masquerading as an anti- narcotics unit which victimizes foreigners?
Despite however supposedly noble it's intentions for its formation, Operation Dudula's modus operandi is patently unlawful, and makes a mockery of the rights of civilians. Furthermore, as with other far-right and extremist groups such as the Proud Boys in the USA, Pegida in Europe, Generation Identitaire in France, Operation Dudula and or its members completely ignore or misrepresent the facts in pursuit of their agenda. Crime, in its various forms for example, is not solely the preserve of migrants. This fact does not condone any criminal activity by migrants or foreign entities in South Africa. However, it is more plausible to be honest about the fact that social ills such as corruption, petty and organised crime know no gender, colour or creed. As far as this is concerned before the law, what's good for the goose is good for the gander.
To borrow from Robert Solow once again, technology and foreign investment are in fact lubricants for growth and development in a society. To be sure, the natives of a country deserve priority when it comes to talent meeting opportunity. However, migrants also bring their human capital, which benefits society at large. As a result, it is futile to harass innocent people who wish to utilize their skill, talent and intellect to improve their lives. It is also inhumane and a complete misrepresentation of the values of South African society.
The above was more eloquently expressed by former US President Ronald Raegan in his last speech as US President, stating that, "We lead the world, because unique among nations, we draw our people--our strength-- from every country and every corner of the world. And by doing so, we continuously renew and enrich our nation. While other countries cling to the stale past, here in America we breathe life into dreams. We create the future, and the world follows us into tomorrow. Thanks to each wave of new arrivals to this land of opportunity, we're a nation forever young, forever bursting with new energy and new ideas, and always on the cutting edge, always leading the world to the next frontier. This quality is vital to the future of our nation. If we ever closed the door to new Americans, our leadership in the world would soon be lost."
Perhaps Operation Dudula has highlighted a complete lack of confidence in South Africa's state security apparatus, institutions such as the National Prosecuting Authority and the police to uphold their social contract with the citizens of South Africa: to protect the state and her citizens against nefarious elements, and to uphold law and order. The Operation Dudula phenomenon may also be a clear indication that some members of our society are highly dissatisfied with the trajectory of the development of South African society. It is indeed a moment of introspection for the powers that be. Either way, Operation Dudula is a vigilante group, and ought to be dealt with decisively for their vigilantism within the bounds of the law.
It goes without saying that the levels of inequality in South Africa are abnormally high. Perhaps this is a moment for South Africa to ensure that a systematic and just land reform program is realised. This was one of the first steps taken by the Asian Tigers post liberation from colonial rule, and with other reforms, led to a massive and sustained economic boom in those nations. Of China, Nicholas Kristof summarises this succinctly, "China's economic boom seems to have been a chemical reaction of sorts. The first ingredient was the Confucian heritage that emphasised education and savings. Then came the Maoist revolution that unified the country, broke the entrenched interests, divided up the land, and supplied financial and human capital. Third were the quasi-capitalist policies of Deng Xiaoping. None of these factors was enough by itself; in combination, they have been explosive. For all its cruelty, the Communist Revolution laid the groundwork for the economic revolution that came later."
South Africa abolished Apartheid in 1990, and has had a democratic government for 27 years. It is highly unlikely that an 'invisible hand' approach will deliver anything worth writing home about when it comes to South Africa's unacceptable levels of wealth inequality. Not only does South Africa need to urgently address an inequality crisis, it also needs to unlock all its latent potential, and to drive the nation into the future, one where wealth creation, among other things, can take place in an egalitarian society. With such demands, only the best technocrats in the public service and beaurocracy will do. A different country and a different continent is possible.
