South Africa's Economy After Political Monopoly

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Questions and Answers

What is the current trend in economics regarding the role of markets?

There is no change in the view of markets and their role in the economy

Markets are seen as being able to deliver good outcomes for all

Markets are seen as the only way to achieve economic growth

The belief in markets has been discredited and a shift towards regulating them is occurring (correct)

What is the view of Angus Deaton, a Nobel Prize-winning economist, on trade unions?

He has no view on trade unions

He now views unions as a necessary counter to corporate power (correct)

He views unions as a nuisance that interferes with economic efficiency

He views unions as a necessary part of a functioning economy

What has been the outcome of economic policies implemented since the early 1970s?

Growing inequality across the world (correct)

Reduced corporate power

Growing equality across the world

No change in economic outcomes

What is a key characteristic of the civil society in the country?

Strong and capable Signup and view all the answers

What is a reason for cautious optimism in addressing current challenges?

The new pluralism in the country Signup and view all the answers

What is the aim of regulating markets according to the article?

To ensure that economic power is not concentrated and that outcomes are good for all Signup and view all the answers

What is a consequence of a monopoly of political power?

A monopoly of economic policy formulation Signup and view all the answers

Who is the author of the quote about practical men being influenced by defunct economists?

John Maynard Keynes Signup and view all the answers

What has been shown by David Card and his colleagues?

That minimum wages do not lead to job losses Signup and view all the answers

What is a key factor in determining whether the country can address current challenges?

The ability of institutions outside the state to use the political space Signup and view all the answers

What is implied by the quote about madmen in authority?

Leaders are influenced by the ideas of academic thinkers Signup and view all the answers

What is the current state of South Africa's political economy?

There is a monopoly of political power Signup and view all the answers

What is a characteristic of the business community in the country?

Adept and capable Signup and view all the answers

What is the result of a monopoly of economic policy formulation?

Poor economic outcomes Signup and view all the answers

What event has raised optimism for the future of South Africa's economic policies?

The loss of majority by the African National Congress in recent elections Signup and view all the answers

What has been the pattern of South Africa's economy over the past 30 years?

High inequality, excessive corporate power, and concentration of wealth in a small elite Signup and view all the answers

What is the primary effect of South Africa's high levels of inequality?

Reduced economic growth Signup and view all the answers

What is the primary goal of economic growth in South Africa, according to the passage?

To benefit the lower-income groups and marginalised communities Signup and view all the answers

What is the potential benefit of a unity government in South Africa?

To skew the benefits of growth to lower-income groups and marginalised communities Signup and view all the answers

What is the view of the Democratic Alliance on policies like minimum wages?

Against policies like minimum wages Signup and view all the answers

What is the importance of uncertainty and contestability in politics, according to Adam Habib?

To ensure that economic growth is not skewed to benefit the political and economic elite Signup and view all the answers

What is the example of a costly policy error mentioned in the passage?

The adoption of free higher education Signup and view all the answers

What is the potential benefit of a more plural political space in South Africa?

To place more pressure on political actors to base their decisions on evidence Signup and view all the answers

What is the importance of evidence-based policy decisions in South Africa's future?

It is very important for South Africa's future Signup and view all the answers

Study Notes

Economic Policy Shift

The traditional view of unfettered markets delivering good outcomes for all is now widely discredited.
Prominent economists, such as Angus Deaton and David Card, have changed their minds about the efficacy of markets and the importance of power in setting prices and wages.

The Role of Power and Regulation

Markets need to be carefully regulated to ensure economic power is not concentrated, and outcomes are good for all, including those who lack power in market relationships.
Unregulated markets have led to growing inequality, excessive corporate power, and unacceptable concentrations of wealth in a small elite globally.

South Africa's Economic Challenges

South Africa has conformed to the pattern of high inequality, excessive corporate power, and concentration of wealth in a small elite over the past 30 years.
Measures to reduce inequality through social transfers have been effective, but have limited effects on the overall level of inequality.
The country's high levels of inequality reduce economic growth, as too few people are integrated into the economy.

Breaking the Political Monopoly

The African National Congress's loss of its majority in recent elections may lead to a more plural political space, allowing for new voices and better economic policies.
A unity government comprising the African National Congress and the Democratic Alliance might bring about more inclusive economic policies.

Importance of Contestability and Uncertainty

Political scientist Adam Habib emphasizes the need for uncertainty and contestability in politics to ensure economic growth is not skewed to benefit the elite.
When governments are responsive to citizens, the probability of success increases, according to economists Daron Acemoglu and James Robinson.

Policy Errors and the Importance of Evidence

Examples of costly policy errors in South Africa include the decision on free higher education and the denial of HIV-Aids treatment.
A more plural political space will pressure political actors to base their decisions on evidence, rather than unilateral policy actions.

Looking Ahead

South Africa's government will need to make policy choices that evaluate options carefully, based on good research and evidence, in a complex international political space.
The country's strong institutions, including universities, civil society, legal institutions, trade unions, and business communities, can contribute to policy development.
The quote by John Maynard Keynes highlights the importance of considering the intellectual influence of economists on policy decisions.

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Description

The quiz explores the potential impact of South Africa's broken political monopoly on its economy. It discusses the shift in economists' views on unfettered markets and their effectiveness.