As Keynes explained, in his magisterial analysis of the drivers of private investment, written in the depths of the 1930s great depression.
South Africa’s election season is underway. But current debates are stuck in a time warp. The country needs to look beyond the familiar nostrums that have held sway for much of its first decades of democracy.
There’s no doubt in anybody’s mind that South Africa urgently needs to get its economy moving again. But as two great 20th century economists John Maynard Keynes and Albert Hirschman have taught the world, economic momentum is not created by focusing on the myriad pinpricks about which business continually complains. Rather, the way to reinvigorate the economy is to rekindle hope across society.
The great scholar of 20th century Latin American development, Albert Hirschman, built on Keynes’ insights in a way which speaks directly to South Africa’s challenges. He conceived of the development process as a cycle: Half of the population remained chronically poor, dependent on safety nets for survival. And the quarter in-between – who, in a thriving society, would be carriers of hope from the middle to the bottom of society – struggle, mostly in vain, to stay out of reach of destitution.
The Hirschman development cycle points to the way out of the downward spiral – embrace the "reform function" as the way to revitalise hope.Given this, what might a turnaround look like in South Africa’s current conjuncture? Here are some guideposts.In early 2018, with the recall by the governing African National Congress of President Jacob Zuma and the accession to the presidency of Cyril Ramaphosa, South Africa appeared to be taking a turn for the better.
A genuine, visible – and, crucially, well-financed – commitment needs to be made across society to invest in ladders of opportunity and inclusion. This would offer a tangible basis for hope, especially for young people.
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