Local Economies workshop
Keynote speech: Nic Dawes – Editor Mail & Guardian
I know that anthropology is fascinated with perversities so perhaps I shouldn’t
have been very surprised when Deborah asked a journalist to come and talk to you about
economics and economic policy today. And as you know, journalists are really pretty
much ineluctably caught-up in a set of very unreflected discursive practises, or even
rituals in our engagement with the world and – “If it bleeds it leads” – as Hans Magnus
Enzensberger said in a different context, “human sacrifice is a thoroughly modern
phenomenon”. So there’s a kind of embarrassment structured into this whole engagement
and performance, a threat of exposure in front of you. But I know that you’re well
schooled in the late twentieth-century ethics of your profession and I understand that
those compel upon you a kind of complicated dance of self-undermining and questioning
in respect of the object of your curiosity, so I should be OK, even as a representative of
that tribe “the newspaper people” who allegedly share no such scruples, and ought
therefore to be subject to the scrutiny not just of social scientists but of tribunals and
information commissars.
But we’re not here to talk about media freedom, or at least not directly, although I
think we’ll see that media freedom and freedom of information are concerns right now
for reasons that are closely linked to the broad policy and governance themes that are of
concern to us. Instead of talking directly about that, though, I’ll tell some stories about
South Africa’s recent economic history and in the process try to bring us to what I think
is the rather extraordinary juncture of Spring 2010. In the process I want to advance two
broad, and I think converging, propositions. The first is that the framework we’ve used to
tell the policy story of the last 20 years, useful though it might have been, no longer tells
us much about where we are now. The second is that no conversation about our economic
policy direction makes any sense anymore without a discussion of how democratic
legitimacy is derived and sustained in a single-party dominated system like ours. I won’t
go on for very long, you can treat some of this as a provocation and then we can have a
conversation about it, hopefully in the remaining time.
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So let’s do the time warp for a minute. The story we’ve been telling, certainly in
the press but I think more broadly in society since 1996, is a story about bilateral
symmetry, about left and right and the oscillation, the policy oscillation if you like,
between them. And there are several exhaustingly familiar versions of this tale, I’ll run
through just one of them to try to set some of the context. One version of it goes like this:
the adoption of the Growth Employment And Redistribution strategy in 1996 represented
a fundamental break for the ANC with its progressive and socialist past, and set South
Africa on a neo-liberal course that’s widened income inequality and left the poor worse
off than they were under apartheid. A glance at social development indicators, starting
with the decline in life expectancy from 62 to 48 over the past 16 years, is enough for me
to confirm that charge.
The alternative version of the same story is that Trevor Manuel, backed by the
term of Thabo Mbeki and the best team of civil servants in the government, abandoned
the ideological touchstones of the governing party and replaced them with pragmatism
and some basic economics that dramatically reduced government debt and, with the
assistance of SAAM independent monetary policy, created the fiscal space for expanded
spending on both basic services and infrastructure. The reward is that we were able to
struggle through the 1998 markets’ crisis and the 2001 attack on the Rand, and begin
really ramping-up real government expenditure around 2003, both on the social wage and
on economic infrastructure. As Manuel told me in the last interview I did with him before
he stepped down, his version of this story is “Of course the 1996 project was a class
project”, he said, “it was a working class project”. For the record I’m actually in accord
with the second assessment as far as it goes - it doesn’t necessarily go all that far.
Certainly Manuel’s claim in his October 2008 Mini-Budget Speech, that South Africa
was “well-positioned” as a result of all his work to weather the global financial crisis,
rings pretty hollow in the face of a million job losses.
But the real point I’m trying to make is that this convenient opposition continues
to shape analysis of South Africa’s political economy, to the detriment of both our policy
situation and of that analysis. And it’s in this framework, this binary framework, that
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we’re supposed to understand the “battle for the soul of ANC” and the fractures that
emerged around the succession race between Thabo Mbeki and Jacob Zuma.
The unions and the SACP supported Zuma, we were to understand, because he
would return the party to its leftist roots: no more trade reform, public-private
partnerships, sales of state assets for fiscal prudence. Instead, parastatals would massively
drive job creation, social welfare would expand and so would real wages, the deficit
would grow and the Rand would be pushed weaker, interest rates would be cut and
exploding domestic demand would fuel a virtue of cyclical growth. Take a look at
COSATU’s economic policy statement yesterday, and we’ll see that not much has
changed, except that the financial crisis has created a sort of open out crying in market
ideologies; and nothing now seems quite as crazy as it did two years ago.
But I’m not the first person to point out that Jacob Zuma has never given any
indication that he is supportive of a dramatically leftist economic policy, or indeed of any
economic policy at all. What he’s opted for instead is what comes most naturally to him, I
think, conciliation and the balancing of forces within his cabinet and his party. In Pravin
Gordhan you have a former communist who now believes that efficiency is the royal road
to equity, and that the opposition between the two is false. That is, you need to stick to
your disciplines if you’re going to be delivering improvement in those social
development indicators that I alluded to earlier: tax compliance, anti-corruption initiative,
fiscal prudence, sound monetary policy. This is the toolkit that he brings to it, backed up
very much by a moral vision about equality and development, but also about waste. You
could even allude to his past as a pharmacist and a small businessperson when trying to
understand his attitude to waste and cash flow. So Gordhan believes in rules not just of
governance but of basic accounting and he knows that there are particular limits to what a
state can do with the levers of power at its disposal.
On the other hand, Ebrahim Patel, if you like the union deployee in cabinet, and
Rob Davies, the trade industry minister, have real faith in the capacity of the state to
direct the economy. Their unfortunately named ‘Industrial Policy Action Plan’, or IAP
2,is supposed to lay out the framework for state intervention to steer the development
course of the economy in an equity-enhancing and job-creating direction. And this seems
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to me picking sectors that you think are going to achieve the kind of objectives you want,
creating conditions under which they can grow: tourism, light manufacturing, chemical,
cars. You can then use a mix of policy instruments – tariffs, subsidies, regulatory
measures to protect infant industries from the savagery from global competition and in
the process of self-discovery - which always sounds a bit naughty to me - figure out what
this economy is good at.
I can’t help but think of this as a kind of “play-pen economics”. Outside the big
kids are playing bruising games of global division of labour and comparative advantage,
while inside we have a go at a scale model of the real thing until nanny determines that
we’re ready to emerge. And if you listen to Gordhan’s budget speech in February, with
its stress on openness and competitiveness, and the IAP announcement two days later
with its emphasis on the care and feeding of fragile sectors, you’d be forgiven for
thinking that government had two economic policies being run by three different
departments. And I actually think that is the case.
But the cleavage didn’t really start under Zuma and it’s a mistake to think that it
did. It began under Mbeki and it led a senior treasury official to describe the situation to
me like this: “The thing about industrial policy is that the DTI pretends to have one and
we pretend to fund it.” (That was four years ago, I think.) The fundamental tension in
Mbeki’s cabinet, too, was between those who believed that the South African state had
massive policy and implementation capacity, just waiting for the cash to swing into
action, and those who were handing out that cash and fretting that they weren’t seeing
much performance in return.
The first group was exemplified by Alec Erwin, and also more broadly by the
adoption in 2004 of the term ‘developmental state’ to capture the newly confident stance
of the booming late GEAR years, as austerity began to pay off – and to end in fact – and
state spending began to shoot up. I recorded a 2006 interview with Erwin in which he
invited me to visit Eskom’s grid control centre. He said, “There’s this young woman,”
and his eyes were shining with excitement, and he was waving his hands around, “and
she sits at the control panel pushing these huge amounts of energy across the grid, you
really have to see it.” And I took that as an allegory for his entire approach to policy and
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perhaps to politics. It’s why he backed the man-made boon (unsure of word) of Gogga
and the really expensive (unsure of word) modular reactor. It’s why he could say without
a trace of irony, “the unbundling of Isicatiumba was the most successful industrial policy
intervention in South African history.” Gogga is still more-or-less empty. And, I owe
Erwin a very good bottle of whisky if it ever gets a private sector anchor tenant. He may
try to call in the debt when project Mthombo, the planned R80 billion crude oil refinery
breaks ground there. But that won’t happen without at least 50% funding from the state,
probably more and, Mthombo for all that it’s a new government initiative is very much an
Erwin sort of project: it’s huge, relies on massive state investment and a long view, it’s
motivated by resource nationalism, sort of an idea that there is something called ‘African
oil’ that will somehow flow to us on better terms of trade and more reliably than refined
product from the massive stores of excess global capacity. Frankly I think this kind of
language is like a warm bath for many of our leading politicians. They had to strain to
accommodate themselves to what was seen as the liberalism of Trevor Manuel’s
language. But this kind of stuff is familiar and comfortable. It feels like common sense,
it’s relaxed, and it’s easy, it’s a discourse that lies ready in hand for people who are
trained in the kind of statist approach of the 60’s and 70’s.
The same goes for calls to weaken the Rand in order to boost manufacturing or
for higher deficits in lying with the new latitude that finance ministers have in the
aftermath of the crisis or trade barriers to keep out Chinese T-shirts and New Zealand
lamb. Very few are bothered to think about the fact that the weaker rand and lower
interest rates will probably rapidly fuel inflation, push up wages and interest costs, and
erase any competitive advantage that they may have briefly granted us. I think plain
people forget that the term ‘developmental state’ was coined by Chalmers Johnson for
post-war Japan where egg-heads at the Ministry of Trade and Industry played a central
role in charting that country’s rise as an industrial power. What we share with Japan in
that period is a single-party dominant system, which ought to help in pushing through
programmes with determination, but we don’t share the cadre of very highly trained civil
servants who managed that process. Whether in mega projects or the employment of
complex industrial policy, we simply don’t have the people. A communist who works in
the very senior level of the economic cluster told me six months after the 2000 election
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and his elevation from parliament to government, “I’m starting to believe in God,
because it sure as hell isn’t us that’s running this thing.”
There’s also a difference, along with democracy, between South Africa in 2010
and China, where Thabo Mbeki and his successors turn when they want to talk about
‘developmental states’. In fact, whether in the Mbeki years or now, the caricature of left
and right within government or between government and COSATU, or to step a little bit
outside the charmed circle, between government and social movements like Abahlahli,
has obscured the enormous redistribution of income that has been going on, particularly
over the past decade. The social welfare budget has grown 10% annually in real
economic terms. Grants now account for more than R80 billion of the budget. And it’s
not really surprising, I think, that demands for a basic income grant have faded away;
they’re pretty paltry compared with what is now being paid out. Meanwhile the tax
burden has actually grown, particularly since 2007 from around 24% of GDP to 28 or
29% today, that’s more than a 10% increase in the portion of the economy going to tax,
without any increases being implemented, and the taxpayer base remains especially
narrow. Spending on health, education and housing dominate the budget. So the
immediate and redistributive intent of this government is clearly evident in its fiscal
process, but the outcomes are disappointing and understanding the reason for that
disappointment takes us closer to a realisation that the oscillation between left and right
oughtn’t at present to be our primary focus. What we should be thinking about instead is
the quality of governance and the democratic legitimacy that flows from it or - as is the
case right now - doesn’t flow from it. And inextricably mixed up in that question is the
narrowness, the weakness and I think, the incoherence, of our social contract.
Formally that contract is captured in the NEDLAC arrangement between
government, big business and organised labour, the social partners who are supposed to
work together to guide the transition to democracy by providing the economic conditions
that will keep everyone on side. It’s a pretty narrow deal, and if you’ll forgive me some
violent journalistic short-hand words like this, formal sector workers get decent wage
settlements, business gets a reasonably friendly operating environment, and government
gets empowerment and tax compliance while ensuring that the poor don’t rise up and
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overthrow the whole thing. And that deal is to some degree mirrored in the arrangement
of the tripartite alliance, and I think its breakdown is also reflected in the strain that the
alliance is now under. There’s no clear set of principles underpinning this set-up except
that ‘we could do best if we could all find a way to get along in a more-or-less marketoriented economy with strong labour rights and social protections’. None of the very
specific and detailed mechanisms of Rhineland corporatism, for example, are in evidence.
We don’t have worker or state representatives on board, we don’t have wage or price
restraint packs, we don’t have hard targets; these kind of things just don’t feature. Nor
does a clear statement about a shared economic policy vision. So, what’s the result?
We get pretty steady real wage growth in the formal sector, but also serious
constraints on the growth of formal sector employment, along with a fairly regulatory
business environment, a gradual introduction of competition, etc. We also get sticky
inflation, a frustrated central bank. More recently, though, we’ve seen double-digit wage
increases and massive strikes come hot on the heels of massive job loss and low inflation.
These things can’t be explained in the register of economics or of social partnership.
Workers - whether in the state or private sector - ought to have no pricing power now
when a million people have just been thrown out of work, and yet the promise of an
increase equivalent to twice CPI is enough only to suspend the public sector strike, not to
end it. The public sector wage bill is now around R270 billion, up from around R140
billion three years ago: an extraordinary increase.
A large and growing number of people are left out of this deal, and they’re angry.
Without the massive transfer of funds they get from the state via social grants they would
be angrier still. Dampening that anger, rather than rolling it toward the hospital, school
and education services that they barely use, is what South Africa’s small tax base actually
pays for. But it’s not just those outside the iron triangle of big business, the state and
organised labour who are cross. Government workers, despite the nominal wage increase
of 60% over the past four years, are among the angriest. What’s the point, you might ask
yourself, of a tripartite alliance that cannot find a solution to this impasse and cut a
plausible deal between the workers, the state and citizens? The embarrassing fact is that it
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tried. The union leaders, including Zwelinzima Vavi, helped to come up with the 7.5%
and R800 housing subsidy offer that their members still haven’t accepted.
And for me, a strike poster pictured on the front page of The Sowetan just as
settlement talk around those figures was getting under way, captured the moment we find
ourselves in: it said this: ‘Vavi, if you accept that offer, give it to Zakumi Zuma so he can
use it to build showers and fight HIV.’ I think that really cuts to the heart of the matter.
It’s got nothing to do with whether we adopt a relatively more liberal or more statist path.
Remember Vavi was central to the cutting of this deal, what the poster tells him is that he
no longer has a legitimate basis to represent workers. And, it tells Jacob Zuma that he no
longer has legitimacy either. In this case the remarks, his remarks, around showering, to
prevent HIV, are raised as a question of credibility and his trip to China - where the (2010
FIFA) World Cup mascot Zakumi was of course manufactured - is alluded to. Other
similar posters alluded to Zuma’s polygynous lifestyle. Some said things like ‘Come back
from China and marry me too’, and others alluded to his family’s fast-growing business
empire.
In the negotiations themselves and on public platforms, unions, negotiators and
leaders consistently referred to the flash cars driven by ministers to their expensive hotel
stays, when they wanted to argue that the proposition from the state that its coffers were
empty wouldn’t stand up. So, the question of legitimacy and the position from which you
negotiate has been fundamental to a pretty severe breakdown in the arrangement,
however flawed and partial we’ve had over the past 16 years. And I think the anger of the
social movements isn’t so much about the size of budgetary allocations for housing and
basic services, but about the quality of delivery of those services, which we now know is
seriously affected by corruption, incompetence, deployment, etc.
South African visitors to Beijing are enthralled by the capacity of the Chinese
state to get things done, that’s why the ANC is sending its cadres to political school there.
But the Chinese government can use pure power to achieve these aims, things are
different here. Here we need to use other mechanisms, democratic mechanisms.
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Another anecdote – in 2004 I attended an ANC fundraiser held appropriately enough at
the Grand West Casino in Cape Town. Thabo Mbeki, helped by Trevor Manuel and Iraj
Abedian, one of the architects of GEAR, was entertaining the Cape Town business
worthies for cash. If I recall correctly there was an auction of paintings and memorabilia
and things like that. And Mbeki explained, “You ought to give your support to the ANC,”
he said, “because the people have patience with us. We have enough credibility with
them as a result of the struggle to get them to accept the gradual course that we’ve
adopted.” Not any more.
In democracy you need legitimacy to make the deals stick and a popular mandate
every five years is no longer enough to ensure that, it seems. There is a crisis of
legitimacy on the commanding heights and it flows from government’s failure of all
kinds, from simple incompetence, from stupid statements about showering to prevent
HIV, to outright corruption and cronyism. So to the extent that widespread reporting on
ministerial lifestyles and the enrichment of cronies tends to call into question the
legitimacy of our rulers’ conduct, it’s not surprising that some of them want a Media
Tribunal.
In this environment where almost no one can claim to speak credibly, the
demagogic politics and indeed economics of nationalisation, of super-taxes and of media
restrictions find ready audiences. That’s why the split in government and the government
party that really matters is not between left and right, it’s between the governors and the
looters. It’ll make a difference of a few percentage points of GDP here or there if the
forces of the disciplined left prevail on trade policy for example, against the centrists at
the treasury who’d like to see a more open economy. The survival of the democratic
project, and with it our development trajectory, is at stake if the rentier class is allowed to
sharpen its teeth further and become, as Zwelinzima Vavi suggests, a truly predatory
elite.
So the biggest economic policy question of our time isn’t whether South Africa
has an economic policy (it has several - you can pick your own), but whether it can
credibly implement any kind of policy. And if you needed proof that this question wasn’t
just bugging paranoid investigative journalists, it arrived in the ArcelorMittal deal last
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month. You probably all know the story. Briefly, on all the available evidence, a fiddle
by a few ANC insiders to take advantage of an ill-feeling between Kumba and Arcelor,
filing a dodgy prospecting application on an existing mine, was then aggressively turned
into a massive scheme to enrich the friends and family of President Zuma. His son
Dumisani, his benefactors the Guptas, and Zandile Zungu, a businessman very well
connected in cabinet, are the biggest beneficiaries. And Mittall was all too happy to buy
off this crew in order to keep its access to cheap iron ore. The results cut to the heart of
our industrial economy, and industrial policy in fact, crucially efforts to drive down steel
prices, they also seriously undermine the credibility of our mining regulators.
So this kind of conduct isn’t marginal anymore, it’s a substantive threat right now
to the basis of our constitutional arrangements and even to the narrow social pact that we
currently have. And I could carry on about the independence of the judiciary, or I could
talk about how the free-flow of information is the lifeblood of markets, but perhaps it’s
enough to say that these are actually economic development questions not just political
ones.
So I think our development past needs to sustain a more leftward push or
rightward one, but it needs a government that governs, not a hollowed-out set of
institutions that serve as a feeding-perch for corrupt elites. So I say again, and for the last
time, the most urgent economic question of 2010 is governance and democratic
legitimacy. It’s time that the governors realised that, and united to defy the looters.
Deborah: Thanks very much, Nic, for a very interesting and provocative talk. Your talk
gave a fabulous backdrop to the kinds of complexities that we’ll be exploring in a more
detailed manner today. Being anthropologists, we tend to look at micro-aspects, but many
of the things that you talk about, especially the huge contrast between discourses that
favour the state on one hand, and ideas about South Africa’s classically neo-liberal
character on the other, have been a central conundrum for a range of social scientists, not
least anthropologists.
Just to throw something into the mix: the anthropologist James Ferguson tends to
see the prevalence of social grants in South African society as an example of a classically
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neo-liberal phenomenon, despite the role played by the state. Many anthropologists and
social scientists tend to view this society in that way, and it’s interesting to hear your talk
which suggests there is considerable divergence between those two different angles: state
and market. Perhaps anthropologists have taken an overly simplistic view of it, because
they tend to think of neo-liberalism as a more pervasive phenomenon which forces
people to self-discipline at every level. Even if people are protesting they might still be
subjects of neoliberal governmentality. That is certainly one kind of analysis I’ve come
across.
Ilana van Wyk: I have a question about legitimacy, you seem to identify that as
particularly problematic. But we still find most South Africans voting for the very party
that is totally illegitimate in a sense, how do you explain that?
Nic: Here I’m really at risk of embarrassment in front of anthropologists. But I think that
- and I’ll try and allude to what Deborah said as well - people’s relations to power and the
identities that they perform in those relationships are much more complicated than an
overwhelming interpolation by neo-liberalism, or by anything else. And my sense is that
people go into a voting booth and live out a particular political identity that’s available
within that voting booth. So you stand there in front of your piece of paper, and you’ve
got a set of choices available to you, which constrain the performance of your political
identity, right? And what you do when you make your cross next to the ANC is you live
out the most plausible choice that’s available to you under the circumstances. And then
tomorrow you go and burn down the library and throw the councillor out of town. And
that happens because you are very clear about the fact that that person lacks legitimacy
and that those state agencies with which you interact lack legitimacy. And there’s a
different set of choices and opportunities for you to act out and live a political identity in
relation to action in the street than there is in the voting booth, and I think people are
complicated so I suspect that that’s what’s going on, but that’s a very hand-waving
analysis.
Penny Hawkins: Well, I have to confess that I’m an economist not an anthropologist.
The issue that I really want to address is connected to your cry “let’s have policy of a
sort, let’s have governance of a sort that is better than its been, let’s have more decision11
taking”. My concern is that, because there is this multiple thread of poor governance, a
disconnect with what it means to be democratic, the same democratic movement that led
to the first democracy in South Africa can now say “But we must actually stop the flow
of information, arbitrarily, on an annual basis as and when we choose”. From an
economic perspective, what worries me is that that also undermines any ability to take
decision risks within the government structures. So there are clear options that appear to
be expressed to them all the time, consultants are scrambling over each other to give
opinions and analysis and advice to the state, but the problem is that, I believe, their
ability to make decisions has become more and more moribund, so they are simply cast in
conservativism. I don’t know if the people who are left in the Treasury are neo-liberal. I
think it’s just that they’re too afraid to say anything, just like all the other departments.
Nic: That’s my impression too. When you had a broad-shouldered Trevor Manuel
clearing the path for his bureaucrats, people were prepared to say quite a lot and do quite
a lot. During the recent strike, one statement came out of the Treasury and it was issued
through GCIS, it didn’t come directly from the Treasury. Anecdotally, I have a sense that
there’s a real anxiety in the Treasury right now, a kind of crisis of confidence that wasn’t
there three or four years ago. Now, some other government departments might be
celebrating that because of the resentments that there are of the privileged position that
Treasury took for itself. But I think you’re right. We talk about it crudely in the media as
a leadership crisis.
Let me step back. Jeremy Cronin speaking about ZANU PF, I think in about
2004, said that ZANU PF is no longer confidently fostering a progressive hegemony. I
think that you could say something similar about the ANC right now. And I think that it’s
like a body that’s not in control of itself anymore. It feels, like, this limb twitching and
that leg thrashing around, and you can almost hear the sort of bodily metaphors emerging
in its language of lack of self-control and the overarching principle seems to be “how do
we regain some kind of coherence, political coherence, over that body?” And any policy
statement of any substance is seen by those who might adopt it to be a threat to a certain
coherence because somebody might disagree. I think it’s a very dangerous situation.
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Joe Trapido: I’m probably one of the few people who knows nothing about South
Africa. But you said that corruption was the key problem of the government. My
question is, lots of countries have experienced very fast economic growth while being
quite corrupt. Indonesia or India spring to mind. What’s special about South Africa?
Nic: I thought about that as I was writing and I think that the difference is here. When
Indonesia was experiencing vast economic growth and corruption, it also wasn’t very
democratic, the same goes for Malaysia. And there was a kind of directedness to the
corruption. So, for example, in Malaysia, party bosses who were deployed into business
and had to return a portion of their winnings to the party, did so in quite a disciplined
party structure and with quite clear outcomes in mind - that’s one sort of difference. It’s
less managed here and there are clear views among some jockeying factions within the
party that, for example, you need to build an alternative capital base to your factional
opponents. So people will tell you, and people have told me, that the Kumba deal was
legitimate because it helped build an alternative capital base to Tokyo.
The other thing is that I think we are at a different point, that the sequencing is
different. So those countries to which you refer had a period of primitive accumulation
along with limited democracy and gradually became more open and democratic. We
opened up enormously, and built our experiment on an idea of democratic legitimacy and
on a struggle that was supposed to produce democratic legitimacy. To move back from
that, I think, is a much more difficult and awkward process. South Korea is another good
example. They had their period of primitive accumulation before the democracy became
more fully formed. So I think we’ve got problems with discipline on the one hand and
with management of corruption, and on the other hand with the sequencing in which
cronyism appears in our democratic history.
Gerda Piprek: We need to look at corruption not as the cause of the problem, that is not
necessarily what leads to the demise of a government, it is a symptom. And there could
be different diseases that lead to corruption, so there are underlying currents of which this
is a symptom, and these underlying currents are very concerning. Those differ
dramatically between these various countries.
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Nic: It’s also not just corruption per se, that’s the reason that I referred to the shower
incident. It’s a sense that leadership is credible at a whole set of levels. It also has to do
with competence, has to do with a deployment policy that in some cases has produced
many good civil servants, but in many has resulted in people who may not be corrupt but
who are simply not equipped to do the kind of work that they ought to do.
Deborah: One of the points that’s sometimes made in anthropology is that when people
talk a lot about corruption in any human society, it has the effect, to some degree, of
reinstating the belief in a non-corrupt type of state. It is true in India that everybody
everywhere continues talking about corruption but one effect of this, if not a function of
it, is to increase everyone’s beliefs that there is some type of state out there that is
possible: a reaffirmation of people’s beliefs.
Nic, a lot of what you say is tied into macro-policy: I’m interested in finding out
how people at lower levels experience all of this. And whether people perhaps think of
the state, irrespective of who is in power, as a relatively stable phenomenon, which
allows income to trickle steadily into people’s bank accounts. So whether you’re a civil
servant who gets a regular wage or whether you’re a person who gets a social grant – a
much less amount of money – that wage is coming through, irrespective of who’s in the
government. What I’ve noticed in my research is that vast numbers of people make it
their business to extract that from the people who are getting it as a regular thing. So, in
some instances it seems as if there is a very stable order, despite all these kind of
anxieties and tensions that you describe.
Nic: I think it’s a stabilising order. I do think that the massive impact of the growth in the
social wage is much too readily dismissed by critics of the fiscal policy, particularly of
the last seven years or so. I think it has had a stabilising effect. In fact there is quite good
data to show that although South Africa’s GDP co-efficient has grown, the impact of
state spending has been to reduce it. So I think it is stabilising. The question is whether
it’s stabilising enough for people’s confidence in our current constitutional arrangements
to persist, and whether it is stabilising enough to squeeze out the kind of demagogic
politics that we are hearing more and more of.
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