Nelson Mandela; economic pragmatist and realist.

Part of what made Nelson Mandela so likable was that he was open minded. This article describes how he abandoned the ANC's policy of wanting to nationalize businesses. Ironically, the Red Chinese urged him to do so! I'm no Republican, but I'm glad Mandela was a thinking man.

http://dealbook.nytimes.com/2013/12/09/how-mandela-shifted-views-on-freedom-of-markets/?_r=0

 

For another viewpoint on post apartheid South African economic policy try John Pilger

http://johnpilger.com/articles/mandelas-greatness-may-be-secured-but-not-his-legacy

 

This is interesting, but do you think history could have happened any other way? The story of the latter 20th Century and first decade of this century is one of the abandonment of state run economies. Everywhere you look they are a failure. The best we can hope for is a mixed economy, in which the poor are not culturally disenfranchised; too poor to participate in their own society, in the manner they freely choose. The notion of economic equality simply fails to perform. It's a pipe dream too many of use chase. Life is short, and the world has a shortage of activists and activist energy. We get 7-9 decades at the most. Why chase pipe dreams?

My humble opinion. Feel free to disagree.

 

Eleven

Again you need to back this up because it doesn’t seem to stand up to scrutiny, to one extent or another all economies have ‘state’ involvement and a majority have been to one degree or another been mixed.

- “Mixed economy is an economic system in which both the private sector and state direct the economy”

I mean that could be said to go back to at least the classical world if not further, so the idea that such economies only came to the fore in the latter half of the 20th Century is just plain silly.

The important question is of balance what level of private or state involvement is best for the society as a whole.

For example when the US was doing well economically and there was a huge increase in the number of the middle class was in the period from the end of WWII to the rise of neoliberal ideas. During that period the top tax rate was much higher (94% in 1945 – 50% in 1982).

But in the thirty odd years of free market/neoliberal ideas there was a huge increase in the wealth of a few while the real term incomes of those below have either stagnated or fallen. While right wing and neo-liberal policies (tax cuts and anti-communist military spending) from the 1980 onward increased cumulating in the profligate spending and tax cuts of the Bush Admin. At the same time the free market ideology (deregulation, hollowing out of manufacturing and a belief that the ‘new’ markets were safe) set up the financial sector for a fall. It has brought about a social and political system where wealth has gained great power and influence which it uses it its advantage to the detriment of everyone else. (see Appendix A)

The problem with South Africa is that the entrenched influence of wealth never went away after the end of Apartheid, and corrupted the system and the ANC to its own interests and so the same problems that are associated with huge inequality remain.

Why “culturally disenfranchised” surly if it’s their poverty that’s the problem they are ‘economically disenfranchised’?

I’ve said many times that absolute equality is impossible but it is possible to bring about more equality than say in the US or UK or South African societies of today.

I think you should read The Spirit Level: Why More Equal Societies Almost Always Do better by Richard Wilkinson and Kate Pickett

“Income inequality, they show beyond any doubt, is not just bad for those at the bottom but for everyone. More unequal societies are socially dysfunctional across the board. There is more teenage pregnancy, mental illness, higher prison populations, more murders, higher obesity and less numeracy and literacy in more unequal societies. Even the rich report more mental ill health and have lower life expectancies than their peers in less unequal societies.” Will Hutton

Government policies can help to give people the chance of realising their potential and giving them the possibility of having a health and fulfilled life.

This has been accomplished in the past with governments bringing in laws and regulations that have improved the lives of many people.

Appendix A
Fall in top rate tax [FONT=&quot]
1945 - 94%
1970 – 70%
1982 - 50%
1990 - 28%
2010 – 33%
The neo-liberal ‘trickle down’ ideas that counselled low taxation of the rich took hold in the Reagan era and have remained throughout the steeper period of decline.

Rise in top levels of pay
In the 1950’s CEO pay was 25-50 times that of an average worker that has risen to 300-500 times by 2007.
A bigger gap than any other developed nation.

Trade deficit
1960 – Trade surplus of 3.5 billion
2008 – Trade deficit of 690 billion
(The last time the US posted a trade surplus was in 1975)

Decline in manufacturing
1965 - Manufacturing accounted for 53% of the US’s economy.
2004 – It accounted for 9%
The Economist (10/1/2005) stated: “For the first time since the industrial revolution, fewer than 10% of American workers are now employed in manufacturing.”

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