08 September 2019 - Jimmy Ramokgopa
“95% of economics is common sense”, these were the words of Ha-Joon Chang, a South Korean institutional economist, who specialises in development economics and has contributed to research in the Political Economy of Development at the University of Cambridge. In other words, you don’t have to be an economist to understand economics, but only if you apply your mind.
After going through the National Treasury's recent document, which highlights a proposed economic strategy for South Africa, I can safely say that a substantial amount of what is in that document sounds right. But, one would wonder, what is “right”? This is a very subjective word, indeed, because what seems to be “right” to a neoliberal such as myself may be completely “wrong” to a communist such as Dr Blade Nzimande. Therefore, from an ideological point of view, the neoliberal will always be “right” in his or her own terms, and similarly, the communist will always be “right” in his or her own terms. But, who is “right-right”? Who do we listen to and why?
Ideology, particularly in South Africa, seems to be the only reference upon which all political arguments are based. It’s as if certain political parties argue in a manner which is exclusively aligned to a particular ideology. They discard anything that contradicts their indoctrinated way of thinking, without questioning whether it makes economic sense or not.
We have seen this many times before. During heated debates about the nationalisation of the land, the arguments are largely based on ideologies from the Freedom Charter and radical socialist regimes. Supporters of nationalisation seldom base their arguments on the actual economics that are relevant to South Africa. We observe similar arguments regarding the NHI - arguments that are based on a particular ideology and reference to Section 27 of the Constitution, which declares access to healthcare services a universal right. This ideology is what drives the political decision, despite having alternative strategies that are based on actual economics.
This is the illness in South African politics - ideology supersedes common sense, and these ideologies prevent us from collaborating to implement great ideas. If an idea is not aligned to the ideology that has captured a particular group of people, to that particular group, the idea is “wrong”, even if it has the potential to improve the economy of the country. The gateless intellectual prison, referred to as “ideology” in this article, has become a hindrance to the progress and prosperity of our country. This is observed in the reasoning behind the critique of Minister Tito Mboweni’s strategy by some.
If we agree to consider economics as “glorified common sense”, why are we unable to engage in discourse related to economic matters on the basis of common sense? Should we not be asking ourselves whether Minister Tito Mboweni’s ideas make sense or not, before lambasting them on an ideological position?
Does it make sense to reduce certain red-tapes in the banking sector and making it less difficult for individuals to establish and operate commercial banks? I think it does. Does it make sense to reduce VISA regulations strategically, in order to boost tourism? Of course! Does it make sense to make rails and ports more accessible to the private sector, to stimulate trade and job opportunities? I think so. And does it make sense to open the power producing sector to more players, creating jobs in the sector, stabilising the supply and dismantling a monopoly? Absolutely!
With the above said, I do accept that we are not a homogenous group and cannot agree completely on all matters relating to the economy, and that is why I am advocating for a “collaborative approach”. Collaboration simply means that we work together towards a common goal, despite our differences. The common goal right now is to save the economy and we must never allow “ideology” to substitute “common sense” in pursuing that goal. Collaboration, guided by logic, reasoning and good ol’ fashioned common sense, is what we need right now.
- Jimmy Ramokgopa (@JimmyRamokgopa)
BSc. Engineering (Civil) - University of the Witwatersrand
Businessman - socio-economic and political commentator
Activist - The Collab Movement