SA’s scavenger economy, fighting over a dwindling carcass

Key topics:Political elites prioritising extraction over growthRace quotas as a symptom, not the root problemConfidence collapse fueling lawlessness and mistrust.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Sindile Vabaza*Late one night recently I stumbled on a nature channel that featured hyenas fighting fiercely over a carcass − and I could not help but think of South Africa’s political economy as a whole.Hyenas’ fights over carcasses are often a natural part of their feeding behaviour and social structure. South Africa, in many ways, is a scavenger economy where political elites fight fiercely over an increasingly lean carcass, and where even the bones of the poor are crushed by this feral structure that is our political economy.It is a feeding frenzy of corruption, poor policy choices and weak governance, enabled by a structure of extraction rather than growth and prosperity. As Moeletsi Mbeki often points out, that is the fundamental difference between Asian and African elites. The Asian ones prioritize investment and growth, while African ones prioritize extraction and consumption.It is through this lens of South Africa as a political economy feeding around a carcass that the controversial “race quota” laws of the Employment Equity Amendment Bill of 2020 should be seen. The rationale is that the legislation is part of “new measures to promote diversity and equality in the workplace” i.e. not enough people are getting to feed off the ever-leaner carcass.I won’t dwell much on the specifics of the Bill, as I am certain many others have. The point I am trying to make is that the fundamental problem is the way our political economy is constituted in the first place. If our economy was geared towards investment and growth with the attendant fiscal policies, sound governance and appropriate labour market reforms undergirded by law and order, a tightening labour market (ie: a job rich economy) would render the need for such bills null and void.Much of the seeming growth of racial animus in this country is, in my opinion, tied to our scavenger economy where everyone feels as if they need to get their own bit of carcass. We need an economy where we hunt for abundant sources of sustenance which can then be consumed by everyone, including the poor in this country who have always had a raw deal, whether during apartheid or the current epoch of so-called freedom.Read more:. South Africa needs to take action now to save economy – business leaders.Scavenger political economyPerhaps the most damaging part of our extractive scavenger political economy (of which this bill is a mere symptom) is that it destroys confidence in the future. Even the poor fiscal policy choices that are made by the government, such as unaffordable wage agreements with public servants, are indicative of this mindset of “even I have to eat from the carcass”, come what may. It is not news to anyone that this scavenger economy is a real indictment of the ANC because new forms of criminality have emerged, such as the construction and procurement mafias whose mindsets are indicative of a need to feed on the carcass. It is glaringly obvious that South Africa needs more competent leadership, and reforms that prioritize growth and investment and labour market flexibility. The DA was absolutely right to horse-trade for this, despite some of the more ridiculous criticisms levelled at the party. We will continue to have racially-directed policy as long as confidence in the future is stunted. Our elites prioritize extraction and consumption over investment and growth, and we have lawlessness and criminality reigning in our streets. Racially-animated policy is in my view a symptom of the larger trust deficit in our society. This is deepening because all the solutions are focused on fighting over a carcass rather than hunting for more sustenance.Confidence in the futureHealthier, better-educated (skilled) people in an ever-tightening labour market and a sufficiently growing economy require good governance, sound policy, the rule of law, and secure property rights, which, together, sustain confidence in the future.Social trust between different people is built when everyone believes that they and their children will be able to thrive now and into the future. This kind of hope is what sustains people in a rules-based order even when there are adverse conditions in the political economy, because otherwise people will start to devour each other.In some ways we are all the carcass..*Sindile Vabaza is an avid writer and an aspiring economist..This article was first published by the Dailyfriend and is republished with permission

SA’s scavenger economy, fighting over a dwindling carcass

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