Business Maverick


The meagre pickings of trickle-down economics are the new opiate of SA’s masses


Dr Michael Kahn is an independent policy adviser and honorary research fellow in the Centre for Research on Evaluation, Science and Technology at Stellenbosch University, and a member of the DST-NRF Centre of Excellence in Scientometrics and Science Policy.

What 10 words best describe our South Africa? I have played with the idea for a month or so. I shall not make false claims to shared pain, but shall do my best to connect the dots. Trickle-down is today’s word.

The established Chinese writer Yu Hua gained acclaim with his 2011 book China in Ten Words. His 10 words translate as People, Leader, Reading, Writing, (Lu) Xun, Revolution, Disparity, Grassroots, Copycat and Bamboozle.

Each word serves as the title for a chapter in which Hua teases out the realities, harshness and subtleties of life in China. He explains that “it is when the suffering of others becomes part of my experience that I truly know what it is to live and what it is to write”.

Writing of China’s pain, Hua writes of his own pain as he seeks to understand cause and effect.

So here’s a thought. What 10 words best describe our South Africa? I have played with the idea for a month or so, and have come up with various lists. For fun, I asked my dinnertime family and friends to do the same. The results are varied, show some overlaps, and all are strongly conditioned by mood.

I shall not make false claims to shared pain, but shall do my best to connect the dots.

In no special order, my words are Korruptsiya, Sport, Power, Trickle-down, Security, Literacy, Voice, Mandela, Creativity, and People. My task is now to write 10 Opinionistas each under one of these headings.


The Budget’s in the air, so trickle-down is as good a place to start as any. The finance minister’s speech will be delivered in the Cape Town City Hall, as the National Assembly remains a charred hulk. Funds for rebuilding are tight. Sorry.

Who can forget that it was from the Cape Town City Hall balcony that Nelson Mandela addressed the nation upon his release from prison? This followed President FW de Klerk’s 2 February 1990 speech declaring the normalisation of politics.

Mention of that day evokes one thought in memory — freedom. But De Klerk’s speech was more than that as he doubled down on Pretoria’s economic orthodoxy of prior decades, well before Williamson coined the term “Washington Consensus”. It would be freedom in a mixed economy with property rights assured, fiscal discipline, and the rule of law. (Take bows, Milton Friedman, Friedrich Hayek and Francis Fukuyama).

The idea of the Washington Consensus is captured in the artwork at the International Monetary Fund entrance, featuring water trickling down its corrugated façade.

And our man walked free, fist held high, holding Winnie by the hand. Heady day, that. Late afternoon, Mandela reiterated ANC commitment to the Freedom Charter and its agenda of state ownership. Government and government-to-be were poles apart.

Then in January 1992, Mandela attended the World Economic Forum where he met Chinese Premier Deng Xiaoping, who reputedly advised him to work with, not against South Africa’s private sector.

Mandela subsequently toned down talk of the nationalisation of banks, mines and major companies. The top echelon of the government-in-waiting engaged in study tours and executive courses in the leading universities, economic institutions and think tanks of the United States and Europe, absorbing best practices.

Neo-liberalism was a fact on the ground that continued under the Government of National Unity, and then the ANC regime through the Mbeki years and into the present.

Its clearest statement was the Growth, Employment and Redistribution strategy. And the economy grew, and it was seen to be good, as the rising tide of the commodities supercycle raised all ships.

Read more in Daily Maverick: Forget the deckchairs – flush the deck of the policies sinking Eskom

But the spoils became unevenly distributed, and the Tripartite Alliance began to fray, and philosopher-king Mbeki lost the plot, figuratively and literally, and his “class project” was derailed, and he was evicted and the SACP/Cosatu sub-alliance began to eat the state, and uneven distribution swelled with the indicators of poverty, unemployment and inequality becoming boils on the conscience of everyday life. How so?

The first democratic elections replaced colonialism of a special type (government/labour = apartheid) with State Capture of a special type (government/labour = corporatism).

The corporatist house has many mansions. One is jobs for pals; another is contracts for pals; another is votes for pals. All else pales into insignificance. But the deal is inherently unstable, and for the centre to hold, the poor, the déclassé, must be bought off, and this is what trickle-down does. Free education, free healthcare, the social safety net. Basic stuff, of variable quality.

On the one hand, sweat trickles down the backs of blue-collar workers, and those working in the fields of agribusiness, smallholdings or in gardens scattered across the peripheries of tribal lands.

Sweat may also trickle down the shirts and blouses of white-collar workers, especially when the aircon dies as another blackout descends. Here’s the thing — alongside some of the highest average wages in the world, and crazy unemployment, a collapsed rural economy, mafia-controlled informal settlements, and a high dependency ratio, trickle-down through what some term “black tax”, is necessary.

Read more in Daily Maverick: Black tax is not so much about money as it is about boundaries

We are in it together through multiple layers of co-dependency. Trickle-down in the form of an average tax on workers of maybe 25% provided the hand-outs for the survival of the many.

Trickle-down of a special type requires organised labour to pressure its government partner to maintain addiction to CPI+ salary awards. Everyone knows this fix is unsustainable, and the evidence is there in plain sight.

Electricity blackouts occur because of the trickle-out of skills, and the trickle-up of procurement costs. Polluted water occurs through the trickle-in of raw sewage that results from the trickle of inadequate maintenance.

Rural-urban migration into corrugated dwellings trickles on to the extent that we are now 70% urbanised. Trickle-down ensures that the roofs of the homes of Eastern Cape gogos are now corrugated, rather than thatched and that their 15A electricity cables are neatly clamped in place.

Trickle-down ensures that sub-standard education persists in the lower grades. Injury to the minds of thousands of young ones is preferred to actions against those in sheltered employment. Tears of frustration trickle down in abundance. Gravy trickles down for others.

Strange word this, trickle. Bafana Bafana trickled many a ball past the opposing goalkeepers during the Afcon tournament. What an achievement. A capable team at work. We on the other hand have scored numerous political own goals.

Now to trickle forward to the capable state. DM


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