Business Maverick


Understanding – the simple philosophy at the heart of all solutions

Understanding – the simple philosophy at the heart of all solutions

Daily Maverick’s annual discussion showcase, The Gathering, takes place on 24 November 2022 and this year it is taking place under the rubric of ‘solutions’. Speakers and participants have all been asked to put some solutions on the table and what follows is a contribution regarding SA’s economy.

I should say at the outset that journalists are terrible at solutions. People expect journalists, rightly, to highlight the potholes in the road, rather than waste their time talking about where the road is safe. But since problems and solutions are flip sides of the same coin, while in the process of pointing out the potholes, we should at least think about how best to fill them.

In SA’s economy, we are faced with arguably the country’s largest single problem. There is nobody our economy does not touch; it’s fundamental. All other issues of society are contingent to some extent on the state of the economy, whether we are a shack-dweller or a CEO. And to state the absolutely bleeding obvious: SA’s economy is in a poor state.

In the broadest possible measure, the growth of wealth over the past decade, SA has underperformed the world, emerging markets, Africa, middle-income countries, and importantly, our own expectations. For eight out of the past 10 years, the growth anticipated by our various finance ministers at Budget time has not been achieved. 

SA’s economy is not expanding fast enough to produce jobs for new entrants, never mind existing jobseekers; our tax base remains low, limiting public goods and services and therefore we cannot improve our health and wellbeing. Just one measure: only 30% of graduates from tertiary education institutions are finding work, and SA’s enormous pool of unemployed is getting larger. This is a time bomb, people, a time bomb.

The solution to SA’s economic problems, like solutions to most other problems, is not a one-thing thing. There is no single magic bullet, only magic semi-automatic magazines. Getting one thing right is just the start of a long journey of getting multiple things right, and doing so simultaneously. The solution does not vest in individual ideas, like, say, business process outsourcing, or implementing the Fourth Industrial Revolution, or even a single grand philosophy. It’s not even as simple as having a good educational system or a good healthcare system, even though they would make a huge difference. Our lives are component parts of the lives of hundreds of thousands, perhaps millions of other lives: we are dependent on them, as they are on us.

And that, incidentally, is not a weakness or a failing; it is an enormous benefit because it allows each of us to extend our knowledge in a particular slice of life without having to bother with all aspects of life. Specialisation helps everyone because it increases aggregate knowledge. So we should encourage specialisation and discourage grand generic notions that propose broad solutions. The details matter here. 

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But … if you force me to isolate the root of it all, the one grand idea, it would be this: we all need to develop a broad and multifaceted philosophy of understanding. We need a way to mesh individual ideas into a workable system that can help us make sense of the world and improve it. And I suspect this simplicity is a utility, not a failing. For me, and I’m sure for most of us, that philosophy of understanding comes down to four key components: be sensible, be confident, be kind, and cherish life.

Being sensible means being aware of what works and what doesn’t; absorbing lessons learned and embarking on corrective action, quickly; being aware of studying and advancing knowledge; being conscious and curious not only of what we ourselves think or feel but what others experience, even when we disagree with them. It means allowing our decisions to be guided by facts and truth, and not suspicion and hatred or even bald hope. It means concentrating on what the data show, not what we think they ought to show.

Being confident means surmounting fear. Although it doesn’t seem like it, fear is our happy place; it’s the place we go to when we feel overwhelmed. It’s the place where we expect everyone else to be, so we imagine we’ll be in good company, like Mark Twain’s joke about heaven and hell: the first is attractive for the climate, the second for the company we’ll keep.

Obviously, there are things to fear, circumstances to avoid and potholes to drive around. But fear as a general state of being is often more dangerous than what we fear specifically; it numbs us from taking action; makes us search for immediate, desperate solutions and drives us to extremes. People often ask, why is it that the population of the world seems in our age to be attracted to authoritarian leaders of dubious morals and erratic ideas: is it a weakness that vests in humans, or some genetic hand-down, some intellectual failing? My answer is simple: it’s fear.

Being kind is not only morally virtuous, it’s the underpinning of a world of mutual reinforcement. It allows us to specialise, cooperate and progress. It wasn’t until the philosophical Enlightenment that the true and deep utility of cooperation and mutual interdependence began to be understood as an economic concept, as well as a personal virtue. 

The idea is at least notionally embedded in South African culture in the concept of ubuntu: we exist because of each other. Yet, what this concept glosses over is how difficult it is to achieve because in another sense we are all individuals and we should all be individuals. We might exist because of each other, but we progress because of what we do individually. Without making an individual effort, we risk all sinking together.

And finally, cherishing life brings all these notions together. It’s not that we cherish life because it’s so precious or fragile, although it is. We need to cherish life because our demanding circumstances require it. It’s a duty, not a moral conviction or a happy circumstance. Without cherishing life, we risk pulling each other down into the reefs of fear, the whirlwinds of nonsense and the storms of hatred. It’s not about a positive outlook or being happy. It’s about vesting trust in calm, confidence and each other.

And we have every reason to adopt this approach to life because the data support that view. As populations around the world have discovered in the broadest sense, when the central ideas of the Enlightenment are put into effect, human progress jumps forward. In 1996, the first iteration of what became the Millennium Development Goals was established. The central targets of what was then called the “International Development Goals”’ were set out in a report called “Shaping the 21st Century” at a United Nations conference in Copenhagen. The headline target was to halve poverty by 2015. The target was achieved in less than five years, not 15, mostly because China and some other Asian nations adopted the central ideas of the Enlightenment and turned away from communism. 

So what can South Africa do now to improve the economy? Here are some practical ideas, and I would be happy to expand on any or all of them. I would be delighted to hear others. Some focus on government, some on the private sector, some on individuals, and they are, of course, just the start:

  • Spend at least as much time thinking about how money is made as on how to spend it.
  • Don’t double down on failed projects: scrap them.
  • Use incentives to encourage action; avoid arbitrary prohibitions.
  • Default to allowing the market to perform its function except where it explicitly fails.
  • Be demanding of the civil service against realistic, specific targets.
  • Restructure BEE so that it helps everyone rather than helping just a few.
  • Don’t overtax.
  • Find things that people around the world want to buy and then sell them those things, aggressively.
  • Audit all SA’s 700-plus state-owned enterprises and sell or close those where there is no compelling public interest.
  • Go through the tariff book and scrap all tariffs on products not made in SA. That would be about half of them.
  • Scrap the ban on retired or semi-retired business people working in government.
  • Scrap racial set-asides in government contracts; they don’t work, and they make things worse for everyone.
  • Oblige the competition authorities to concentrate on competition issues and scrap their arbitrary interference mandate.
  • Encourage renewables; they are now the cheapest energy source.
  • Understand why nations fail.

There you go; simple. DM/BM


Comments - Please in order to comment.

  • Mark K says:

    1. Have an industrial strategy. States that don’t tend to deindustrialise and this leaves them vulnerable to imported inflation due to supply shocks. Incentivise business in accordance with this strategy and be very clear about the intended industrial development path.
    2. Take advantage of China slowly losing its status as the world’s factory. Identify low-skill manufacturing that can be reshored or onshored and do it aggressively. Subsidise such factories by allowing low wages but providing land on condition that staff dormitories and canteens – free for workers – are built. This follows the model I saw in China.
    3. A population-level skills base is slow to build. Start with simple skills and build from there. 4IR is of no help to the unemployed with no skills.
    4. Actively work on building social trust. Low-trust societies underperform economically.

  • David Liddell says:

    Tim Cohen being serious? I’m shocked! Shocked, I tell you.
    Good article though.

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