Ismail Lagardien: Don’t fear transformation

Ismail Lagardien

The word “transformation” has become one of the biggest bogeys of vested interests across the spectrum of society who have traditionally benefited from the status quo.

Resistance to transformation is sometimes loud and overt, and sometimes it is subtle and insidious.

All the while, there is a belief that things are fine as they are, and that there is no need for transformation.

Resistance comes in all types. It is, at times, couched in the most “rational” or “logical” and commonsensical terms. Other times, it is just silly.

At the best of times there is an almost Hobbesian offensiveness to transformation of any kind. We may acknowledge, for instance, that there is a need for transformation, but it would apply only to others and not ourselves.

Thomas Hobbes said, somewhere, that we are perfectly capable of recognising the intellect of others but consider ours to be superior – forgetting that we are closer to our own intellectual capabilities, and rarely are able to question ourselves.

As the great physicist Richard Fyneman once said, don’t fool yourself, for you are the easiest to fool.

The most recent statements on “radical economic transformation” attributed to Professor Chris Malikane have caused a lot of consternation.

I will not address the offensive dismissal of Malikane’s audacity to state an opinion, suffice to say that some of the things he said, especially around economic orthodoxy, seemed desperately disingenuous, when he simply echoed what powerful Europeans have said. This was dealt with in last week’s column.

Also, I think much of what has been attributed to Malikane is ideologically misguided and seriously lacking in evidentiary support. It’s a scorched earth, devil take the hindmost approach to a political economy that is frayed at the edges and worn out in the centre.

One set of anxieties was around the idea of transforming South Africa’s economy. Let’s forget the “radical” part for now, that’s just pandering to the ruling party’s left flank.

Evidence from across a spectrum of sources, from the most right-wing of Austrian economists to the most progressive sources, shows that through deliberative intervention in, say the United States during the 19th century, and China three decades ago, economic transformation bore great success.

Anybody who cares to read news reports and more detailed research may be aware of China’s current power in the global political economy. Most of us will be aware also, of the economic power that the US has wielded since the end of World War 2.

We have to be intellectually honest and accept that both successes, and a host of others, were the result of deliberate transformation.

The outstanding feature of both cases has been the role of the private sector in achieving such a high rate of growth. In China, this was only possible after substantial transformation away from a state-dominated political economy.

While inequality has risen within China, the rate of economic change was sparked by policy – not by “natural” market forces, ideological mysticism or textbook theories.

For the first 25 years of China’s transformative change, economic growth averaged 9.5%, and national income doubled every eight years.

The evidence confirms that this expansion is one of the most sustained and rapid economic transformations in more than 50 years.

China’s new policy objectives include deliberate intervention to make this expansion more inclusive. In the US, deliberate policies from about 1870 transformed that country’s economy to levels of industrial maturity, expansion of business, large-scale agriculture – and food production.

This continued uninterrupted until the US emerged as the greatest economic power at the end of World War 2, and dominated the global political economy for the next 70 years.

We have to make the point that much of this early expansion was built on genocide against indigenous people, and later on slavery.

The point is that none of the economic expansion with its attendant investments and achievements in science, technology, and innovation, in general, was left to markets alone.

In China and the US, and in places like India or Germany, it took courageous (and wise) vision, leadership and deliberative economic transformation.

Success was achieved by building on industrial strength, expanding food production, investing in research and development, preparing successive generations of students for society – and generally building prosperity.

It is worth noting that when China did attempt erasure during the Cultural Revolution, millions of people had to carry the burden.

And when US president Ronald Reagan increasingly surrendered social and public policy to “the market”, inequality and poverty grew to horrendous levels.

What we need, then, is economic transformation based on building our achievements, as a country, spreading opportunities more equality to secure more equal outcomes.

We cannot burn down clinics when a headache won’t go away.

It would also help if we did not become hysterical at the mention of economic transformation.

I’m not sure about the “radical” part, though.

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