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For whose benefit?

Apr 17 2017 05:00
Mandi Smallhorne*

ALL THIS babble about radical economic transformation…shew, mense, the same-old same-old.

It sounds so progressive, ahead of the curve, really into politics for the people, but then in the same breath – I mean that literally; in the very same speech – the politicians say, now moenie worrie nie, our policies remain the same.
 
What is radical?

The first meaning given in the Oxford Dictionary is “relating to or affecting the fundamental nature of something”.

You wanna be radical? Okay then, try reaching deep enough to change “the fundamental nature” of how we understand our economy.

Let’s start with asking what the economy is for. Is a healthy economy one in which the gross domestic product (GDP) just keeps rising and rising? Or is it one in which the most important requirements of the people – all of the people, not just the 1% – are met satisfactorily within the constraints of the natural environment?

Or is it as Kate Raworth puts it in her best-selling book, Doughnut Economics: Seven Ways to Think like a 21st Century Economist, “meeting the needs of all, within the means of the planet”?

GDP

GDP is not the ideal metric to highlight how a nation is actually faring, how its people are experiencing their lives.

In fact, the man who came up with the concept in the first place, Simon Kuznets, “understood that GDP is not a welfare measure, it is not a measure of how well we are all doing. It counts the things that we’re buying and selling, but it’s quite possible for GDP to go in the opposite direction of welfare,” said MIT professor Erik Brynjolfsson at Davos last year.

Yes, because GDP doesn’t even begin to tell you how the wealth in an economy is distributed. It’s a total of all goods and service produced within a country – but what does that mean in terms of equality? How can we have wellbeing for all in a society in which 42% of the wealth is in the hands of 1% of the people? (Oxfam’s An economy for the 99%, January 2017.)

How do we understand the wellbeing of a country where the 8% contribution of an industry like mining must be weighed against its human cost – migrant labour, for example, silicosis and other health impacts?

GDP does not measure the destruction caused in the quest for growth. The eastern Highveld, for example, is contributing to GDP through its output of mined products, especially coal; but this region is the source of a number of important rivers such as the Olifants, the Nkomati, the Vaal, all now severely threatened by mine pollutants.

Really radical

Perhaps being really radical would mean turning our metrics – and how we make decisions and steer our economy – inside out and upside down.

Ayabonga Cawe, economic justice manager at Oxfam South Africa, has said that policy makers must shift their focus from achieving higher GDP to creating growth that brings shared wealth. We need a shift in focus from top-down to bottom-up. It should be required that every policy decision be taken, not with its impact on GDP in mind, but its benefit for people – primarily those who are still excluded, the "economically inactive" in GDP terms, those who can’t find work or do unpaid work.

So, for example: how does a nuclear build programme benefit ordinary people, instead of those already sitting on the top of the heap? We’d be reliant on external expertise (and important components which have to be cast in forges that we don’t have in South Africa).

Paying money

So we’d be paying money, over a very long period, to people and interests outside of South Africa. And it will take forever to get the build programme going. Whereas renewables have been shown to create a slew of jobs immediately (and we have the skills here in South Africa to fill the need), they take work to far-flung regions of the country where jobs are badly needed, and they create long-term demands for ongoing maintenance.

To make renewables workable as part of the energy mix, they have to be spread out all over the place, wind power all along the Eastern Cape coast, solar power dotted around the Northern Cape – jobs to benefit those who really, really need them. According to bottom-up metrics, this is all good.

How do our policy decisions around mining rights benefit the people?

“… a 2012 report estimated that mining or prospecting licences covered 765 999 out of 993 301 hectares of cultivated land in three districts in Mpumalanga. It is estimated...that, between 1994 and 2009, increased mining was largely responsible for a 30% decline in the overall land area in South Africa under food production.”

Sure, people get jobs from mining and it contributes to GDP – but mense, we only have 12% arable land! (And I won’t even begin to talk about water.) How does this help anyone other than a small group of already well-off people?

If we can reinvent the way we think about what matters in an economy, we have a shot at something really radical, instead of an eternal babble that ultimately – like trickle-down economics – does nothing for those who’ve been excluded.

And a radical shake-up might be scary for those sitting comfortably now, but believe me, a country in which everyone feels they have a stake, in which everyone matters, is almost unimaginably better. So…imagine. You may say I’m a dreamer…

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

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