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No straitjacket please

Feb 18 2013 07:30 * Mandi Smallhorne

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JOBS, jobs, jobs...

As I write this, the radio is awash with predictions of what President Jacob Zuma will say in his state of the nation speech.

I for one won’t be listening – if anything truly radical is said, I’ll hear about it soon enough. But we can confidently expect yet more talk about how to create jobs. The number of the poor and their rising anger is, quite rightly, terrifying.

And the only solution to poverty and inequality is creating jobs... so they say.

But how?

“Both the ANC and DA assume that an increase in the GDP or GDP per capita will result in more jobs being created.

"South Africa’s first decade of democracy is salutary in this respect. The GDP growth averaged 3% and reached a high of 4.9% at the end of this period – the highest it  had reached in over a quarter of a century.
"
Yet unemployment remained persistently high during this period - between 26% and 38%, depending on how you measure unemployment. Whilst some economists have characterized this decade as a period of 'jobless growth', this may have been over-stating the case.

"It is, however, widely acknowledged that the absolute numbers of the unemployed did in fact increase. To justify the need for an even higher ‘growth rate’ [...] both the DA and ANC have maintained that the growth rate has been too low to provide the necessary jobs for the growing labour force.

"Yet, no evidence has been supplied to support their positions...” (Sidney Luckett).

I’ve only done a couple of courses on economics and on statistics so I’m hardly a fundi, but I’ve been listening to the blather about economics all my adult life.

And since my adult life embraces the Reagan/Thatcher era, the end of the Cold War and the triumphalism associated with unfettered, idolised free-marketry, the economics I’ve heard trumpeted has been very much a toe-the-line field. The line being drawn through Hayek, von Mises and Friedman, of course.

Last night I watched (for the second time) Tom Hanks’ excellent film, Charlie Wilson’s War.

It reminded me how the Cold War placed a straitjacket on our thinking, on either side of the fence: for the US-dominated West, killing Commies was just simply good, and socialism (which got intertwined with communism as practised by the Soviet Union, which was not much like any kind of socialism I’ve ever read about) was Evil, capital E.

So when the Soviet Union fell, the polar opposites became enshrined forever as Evil and the triumphant Good (you could even knock one "o" out of that and not be far off the truth). Good was a package deal: democracy-freemarkety.

On September 7 2011, speaking on Democracy Now, one of the less well-known economists, Manfred Max-Neef, put it this way: “When I started economics in the early 1950s, it was totally different.

"We had some fundamental courses like economic history and history of economic thought. Those courses don’t exist in the curricula anymore. You don’t have to know the history. It’s not necessary. [...]

"I mean, that’s stupid arrogance. No, now we know for sure this is it forever, you know? Then it ceases to be a discipline, it ceases to be a science, and it becomes a religion. And that is what economics, neo-liberal economics, is today.”

The result has been that those who guide our economies have hewn closer and closer to certain tenets – such as the one Sid Luckett mentions above, “Growth is the Jobs-maker” –  which in my view have strangled creativity and radical thinking in the field.

If we can’t – as Luckett suggests above – create jobs in the prescribed manner, by growing the economy and attracting foreign direct investment, then we have to do some serious rethinking.

Because, as Oxfam’s January 2012 document, Left Behind By the G20, tells us, we are one of the most unequal societies on earth. And “Inequality leads to instability, prevents productive investment and undermines the institutions of government. [...]

"In South Africa, our model predicts that more than a million additional people will be pushed into poverty between 2010 and 2020 unless rapidly growing inequality is addressed...”

But countries like Brazil and Korea have managed to address inequality. How? Well, in my understanding, they didn’t allow themselves to be wrapped up in the straitjacket.

They got creative. They weren’t afraid of using tools like government intervention or purposeful steering of the economy – tools that generally send any religious disciple of the Received Wisdom stark, staring mad.

So for goodness’ sake, let’s take off our religious hats and open our minds. Let’s talk about what we can do to create jobs AND address inequality – not necessarily one and the same thing.

Social grants have meant a first step out of inequality for many – so instead of making formal jobs, why not think of creative ways of using tax funds to remunerate people who contribute to their communities, for example?

After all, we have to acknowledge that round the world, the rate of job creation simply doesn’t meet the need for jobs, and that’s especially true here. We have to find other ways of relieving poverty and stimulating the economy through releasing funds into communities.

Let’s abandon all old mythologies and beliefs, let’s talk as if there are no rules – and see what exciting and useful ideas emerge!

- Fin24

*Mandi Smallhorne is a versatile journalist and editor. Views expressed are her own. Follow her on twitter.



 

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