South Africans must choose a Third Way to survive and progress

With days to go before the elections, it appears neither a centrist ANC nor the centre-right Democratic Alliance (DA) have the political will to transform our economy using a developmental state model. (Graphic:M&G)

With days to go before the elections, it appears neither a centrist ANC nor the centre-right Democratic Alliance (DA) have the political will to transform our economy using a developmental state model. (Graphic:M&G)

Looking ahead to the elections, South Africa is in a particularly tight spot: its ailing economy being compressed by increased foreign competition, a shrinking tax base, rent-seeking and currency distortion exacerbated by a status quo that is characterised by under-regulated, financialised capitalism.

Now, with days to go before the elections, it appears neither a centrist ANC nor the centre-right Democratic Alliance (DA) have the political will to transform our economy using a developmental state model. Instead, our country has faced a perpetual energy crisis, witnessed the atrocities of the Marikana massacre, endless student protests, capital and skills flight and bungled local government issues — from Cape Town to Pretoria.

Meanwhile, millions of poor and mostly black South Africans live in precarious informal settlements, a spectre of apartheid’s legacy of oppression, their continued existence representing a national disgrace.

Collectively, these are indicators of a society approaching a breaking point. The ANC and DA both mostly favour market-based solutions and encourage an inveterate faith in the “individual’s” agency as a means of self-determination from poverty. Such a mantra is ill-equipped to solve the country’s systemic and structural problems and explicates the need for an urgent public debate on economic transformation, and a coherent discourse on what real transformation looks like.

Given the above, contemporary South Africa has a maelstrom, not a model, for economic policy. We have been hampered by global trade deals that include trade racketeering, such as the infamous United States chicken-dumping allegations, with our resistance provoking a threat from then president Barack Obama to suspend our membership of Agoa [the African Growth and Opportunity Act].

South African industries facing fervent competition have struggled under a system of rampant financialisation, leaving our banks gorged at the expense of a high household debt burden that has dampened individual growth and enterprise. From artists to small business entrepreneurs looking to rent work space (or seek the necessary capital) to start a company and create jobs, the market remains brutal, and a deterrent to young talent.

Many in our country are drowning in debt, from the extortion of young would-be entrepreneurs paying off lopsided student loans to skyrocketing premiums, rent and credit expansion. The unchecked casino-capitalism of the housing, financial and transportation sectors lays bare the mediocrity of our reliance on a monetary policy that excludes many South Africans from participating in the economy. It is clear the financialisation model has run its course and we urgently need a think about a Third Way.

Market failure, political woes

To be clear, this article is certainly not just a critique of “market-based solutions”. In fact, there are plenty of arguments to be made about liberalising our banking and energy sector (for instance, trisecting Eskom into one state-owned and two private-owned energy companies with a strong regulatory oversight to avoid collusion).

On the other hand, mineral mining and swathes of agriculture could be reined in under nationalisation programmes, with investment redirected from shareholders to communities.

If we are indeed committed to sustainable economic transformation, our economy will require the creation of new sovereign wealth funds, similar to the Norwegian oil funds, as a financial instrument leveraged to capitalise major infrastructure projects amid wider macroeconomic stabilisation.

These components are critical to jumpstart South Africa’s ailing economy and allow for a strengthened foundation to tackle modern threats such as cybercrime, refugee displacement and trade disputes, which have proven increasingly volatile in a contested world arena.

Make no mistake, the DA, whose policies are incubated by the ideologies of the Free Market Foundation, have adamantly rejected public housing, free education and an increase in the minimum wage. This kind of political disconnect from the contemporary political and social landscape appears detached from the party’s manifesto to “build a South Africa for all”. In this context, it is unsurprising that young, particularly black South Africans do not trust the DA to lead.

As the self-styled “poster child” of governance, the DA has been embroiled in turmoil, casting doubt on the party’s stability and ability to form a national government, given its recent leadership purges and infighting.

The ANC also faces uncertainty in the event of a successful election. President Cyril Ramaphosa’s proximity to the miasma of the Zuma era has not been detrimental so far, but factions in the party could lead to a leadership challenge, unless the fight to purge corrupt officials who leech on the current administration continues. Recommended reformations to Eskom and other state-owned enterprises are parochial and indicate an increased hand of the private sector in managing finances.

The Day Zero water crisis was undeniably bungled by the DA government in the Western Cape, leading to one of South Africa’s worst urban planning catastrophes. In a stunning display of passing the buck, Cape Town residents were penalised for water “misuse” and any sense of accountability was shirked in favour of mounting blame on dysfunctions in national government.

Regardless of your political disposition, it casts doubt on the DA’s ability to manage an emergency at a national government level.

This is not surprising when thousands of poor South Africans are living in infamous “temporary relocation areas” such as Blikkiesdorp, a settlement on the fringes of Cape Town and an example of a human tragedy, highlighting the social and political neglect of poor South Africans. We have to organise and reject this vision for our society, and provide a coherent proposal for a Third Way.

Fees never fell

For young South Africans, the #FeesMustFall moment shone a spotlight onto the fragility of the social state. Neither the ANC nor the DA were forward players in the student struggle and begrudgingly supported the “cause” to abolish tuition fees.

Although I won’t be spending time addressing the curriculum reform/decolonisation of the institution, it is important to highlight the lost opportunity for politicians to understand and take action to protect a vulnerable “born-free generation” from economic predation and unlock avenues to wider economic access.

Instead, university fees have remained an ambiguous terrain and thousands of would-be entrepreneurs and innovators are paying banks exorbitant interest monthly, rather than building businesses and creating opportunities. Only the Economic Freedom Fighters were willing to put their ideological beliefs behind the decision to endorse free education and were vocal in their support during the #FeesMustFall protests.

Lessons from Brics

If Brazil, India and Russia are anything to go by, then it is best for South Africa to proceed with caution, as the world increasingly faces the false prophets of right-wing strongmen who capitalise on inequality and promise to battle economic and social decline. The recent election of Jair Bolsonaro, a flagrant chauvinist, homophobe and fossil-fuel fan, to Brazil’s presidency, is a clear warning of the authoritarian factions that haunt modern and young liberal democracies.

Among the members of the Brazil, Russia, India, China, South Africa (Brics) bloc, South Africa remains the strongest of the liberal democracies, but we should not become complacent. South Africa’s angry, disaffected and overburdened youth are feeling pressed by the political spectrum that is a mishmash of neoliberal policies, with the rare concession of an improved social contract, such as the minimum wage Bill.

The status quo will be insufficient to defuse the threat posed by right-wing Afrikaner fringe groups and/or a politicised tide of xenophobic violence, or even the total collapse of civil relations.

The promise of the Rainbow Nation as a country steadfast in creating conditions for equality is losing its appeal as a credible response to the post-1994 moment.

Service delivery protests across the country (mostly centred on issues of land and housing) ahead of the election represent the potential for runaway civil unrest and disruption in the near future.

When communities are politically excluded, the technologisation and atomising of our content consumption will increasingly foster conditions for polarising and even radicalising the public space to unstable levels. Steps will need to be taken to create a political apparatus that protects the public from the nonconsensual extraction and profiteering from our collected data.

Building a green economy

With protests centring on social issues in isolation, the political expression of two decades of destructive neoliberal policies of the post-apartheid state remains an arcane form of protest.

Laying the foundation for a green economy is in fact the fastest way to lift millions of South Africans out of grinding poverty and unify citizens under a common and cogent goal. Green, in the context of an economy, also refers to labour law protections, energy consumption, sustainable agribusiness and mass transportation as well as safety standards for household and business buildings.

So far on the political landscape, the ANC and EFF have committed to land expropriation. The EFF leadership met with the financial sector in November 2018 to discuss mutual expectations under an EFF national government, as part of a wider tour to engage with multiple sectors of our society. This was significant in boosting its appeal as a legitimate party, even if it occurred during its own scandal relating to the VBS Bank heist and Julius Malema’s elite membership of the Inanda Club.

South Africa will need a bold government to leverage its international reputation and form closer ties with allies such as Singapore, Thailand and Uruguay — countries that provide rich clues on how to roll out major housing and transportation programmes, better known as the now ever-elusive “developmental state”.

Intervention measures under developmental state programmes were implemented during poor economic periods in the histories of the abovementioned countries. Claims of chronic deficiencies in the technocratic skills necessary to operate an efficient state bureaucracy that is capable of rolling out a functioning developmental state are valid. Yet our desire to address them should accompany such reports, to deflect political pessimism.

Mobilising against deregulation and reduced public spending requires a solid understanding of how such failing policies proliferated in South Africa. The problem exists in our political will and public imagination, a chicken-and-egg scenario.

Fortunately, this conundrum can be kickstarted, but not without tremendous public shifts in the attitude and utilisation habits of technology towards sharing and discussing community problems. If we cannot mobilise we risk sinking into the lethargy of media content binges while the state slides into the abyss. Social media are technological tools that can be used to organise communities, share stories of crisis and hold leaders accountable to a digital audience.

The recent ascent in the popularity of the Green New Deal in the US elucidates the enormous potential social media has for the formulation of and rallying behind a coherent idea.

Collectively, decisive political action to tackle housing shortages and poverty, end the energy crisis and encourage clean energy initiatives, and invigorate public assets and investment in infrastructure can be characterised as a Third Way political turn.

Despite the chronic issues highlighted here, these challenges are not insurmountable. Climate change and the rupturing of South African society will create conditions where a political appetite for a Third Way politics will proliferate.

Naturally, policies directed at social development are denounced, using the popular political mantra of “Who is going to pay for it?” This is a red herring, especially when the economic cost has been externalised. As it stands, we already are paying the price, both in the figurative and literal sense, for our national stalemate. Fuel hikes, securitising against violent crime and an escalation of mental and physical ailments are only a handful of the costs of not having a robust developmental state in a social democracy.

The private sector also has a crucial stake in the deployment of a Third Way political framework, with the public continuing to hold it accountable to its actions. Too often we have ignored the private sector’s violation of the public trust, whether it be the Steinhoff fiasco or KPMG’s fraudulent business ventures linked to state capture.

Pushing for a Third Way politically is not an easy task, but its success relies on the electorate placing formidable pressure on our major political parties to commit to a manifesto that outlines a plan for developing a green economy and broadening the operations of a developmental state.

A lot hangs in the balance with this election. Climate change, social instability and automation present challenges that will see the collapse in the contemporary consumption-driven capitalism model, and South Africa will need to be prepared to meet the challenges of product and market forces in a new system.

Delaying change heightens the risk of an authoritarian slide as frustrations with the glacial pace of change under a digital liberal democracy fester.

A Third Way and a new social contract is critical to avoid the implosion of our society. It is not a matter of selecting the ostensibly strong political party, but rather those that commit to the betterment of our society. Who will we hold our future accountable to in the 2019 election?

Luke Cadden works as a talent specialist in the tech industry He holds a master’s of arts degree in history from Rutgers University – Newark and was awarded a Fulbright scholarship in 2015

Luke Cadden

Luke Cadden

Luke Cadden works as a talent specialist in the tech industry He holds a master’s of arts degree in history from Rutgers University – Newark and was awarded a Fulbright scholarship in 2015 Read more from Luke Cadden

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