Illustrative image | South African bank notes. (Photo: Waldo Swiegers / Bloomberg via Getty Images) | SA Reserve Bank. (Photo: Waldo Swiegers / Bloomberg via Getty Images) 
I’m sure that one of the reasons you read Daily Maverick, and perhaps even After the Bell (thank you!), is not so much that you want to understand the past. Or even what happened yesterday. Or just the past five minutes of testimony at the Madlanga Commission.
I think the real reason you read us is that you are really trying to understand the future.
Like all of us, you want to know what will happen next, and what things will look like in a few years.
I’ve often thought that this is what all business and political reporting really is – an attempt to know whether we are going to be richer or poorer in the future, and to understand how what happened today will affect our prospects.
And humans, being social animals (except on “social” media), like to do things together.
You are less likely to spend a huge amount of money on your house if you know that your neighbours’ homes resemble your average government building inside. But, if your neighbours are all spending money on their properties, you don’t want to be the one left with the worst-looking house on the street.
One of the best ways to work out how everyone else feels, particularly how capital feels, about the future is to see where money is being spent. And one of the big stories over the years has been how money, how capital, has simply not been spent.
The Reserve Bank said this week that it believes there is currently around R1.8-trillion in the bank accounts of companies.
On the face of it, nothing could tell you more about the lack of confidence companies have in the future than that.
They could be investing that money, building new factories or buying more property, or simply trying to expand. And in the process they would be selling more stuff and services to more people and thus making more profit.
But instead, they seem to be keeping the money. They basically think it’s safer there, where it will get no return, than investing in this economy.
Except that this entire issue is massively contested. And has been for a long time.
As long ago as 2013, serious people were saying that the idea that companies were sitting on huge cash piles was more complicated than it sounds, and in fact it is not really the case.
There has been some academic work on the matter, dating back at least 10 years.
And the Reserve Bank, which many might see as the final word on the subject, concludes on the issue that: “The continued rise in deposits shows that companies are not merely stockpiling cash. They are responding to economic conditions and balancing risk with readiness to invest when confidence returns.”
While some might see that as suggesting that companies are not hoarding cash, the fact that it uses the word “confidence” must concede that confidence is a major problem.
Combine that with the fact that governor Lesetja Kganyago has regularly given the government a lecture on the virtues of reform during his interest rate announcements, and it’s pretty clear that confidence is a major issue here.
There are plenty of other ways to use money flows to work out how confident people are.
Cape Town mayor Geordin Hill-Lewis told Daily Maverick’s Kevin Bloom this week that in Sea Point alone he counted “six or seven cranes”. I have a horrible feeling that I could drive across pretty much all of Joburg and I don’t know that I would see a single one.
There is a much stronger example of how capital follows confidence.
Since about 2012 money has flowed into the US, pushing up their markets and strengthening the dollar. Since the start of this year the dollar has weakened by about 10%, while money is no longer flowing there so strongly. This is surely a reflection of the lack of confidence in the policies of the Trump administration.
And I should point out that confidence, and thus investment, are contagious.
As people around you build, whether they’re homeowners or companies, so you feel you must do the same. If you think everyone around is feeling confident about the future, you are likely to feel more confident about the future.
If they invest, you will invest.
It goes the other way too.
Because the City of Joburg has not invested in water, electricity and roads in so many areas for so long, companies are not investing there either.
If you can see the infrastructure in an area deteriorating, would you invest there?
I think what we can say for certain is that confidence is important. And for so many reasons, we just don’t have enough confidence in our future.
And I can think of no greater condemnation of those who lead us than that. DM