Ashley Green-Thompson runs an organisation that supports social justice action.
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I love morning radio, especially when people who know their stuff get interviewed. The economist Dawie Roodt was on the other day, and he went hammer and tongs at the decision by the South African government to reduce the levies imposed on the price of fuel. This measure is intended to ease the impact on consumers of the oil price hike caused by the orange disorder’s madness in Iran. Roodt opposes the levy decrease because he correctly argues, the country will have to pay for this tax break in the future when the government has to fill the gap in revenue that will have arisen. He called for macro-economic reform that would allow for greater investment, and argues that the relief could have been found elsewhere. What struck me the most in his argument was the almost fervent devotion to the wisdom of an inanimate system called the market to regulate our lives. His position was rooted in the notion of short-term suffering – don’t reduce the levy - for long-term gain – we’ll have a stronger economy at the end. This is at the core of austerity, a policy stance that asks people to tighten their belts as public expenditure, usually on social services or grants or relief to consumers, is reduced. It is much like households would do when there is reduced income, usually when the primary earners lose jobs or take a cut in salary. We spend less because we have less, and we don’t even consider taking loans to tide us over. Instead we eat less, get less medical treatment, cancel Easter eggs as a luxury, and for a while live pretty miserably in the hope that our suffering will pay off sometime in the future.
There’ve been a couple of these interventions by government to relieve the pain of reduced public spending and economic shocks. During Covid there was the Social Relief of Distress Grant of R350 given to people with no income. It continues today and provides a lifeline for many. In 2024 we had the introduction of the two-pot retirement system, which allows withdrawals of a portion of our retirement savings without being heavily penalised by the tax man. Now we have the fuel levy relief in light of the global economic carnage caused by Israeli and USA bloodlust. And of course South Africa has a safety net of social grants for people at the margins, and it is a significant factor in keeping many from starvation. Some argue that there should be more, but the austerity numbers don’t add up.
Another economist who is often on the radio is Duma Gqubule, and he is similarly strident in his opinions. They differ from those of his fellow commentator, though, in that he often argues that government does not do enough to address the vulnerability of poor people. He is a strong proponent of increasing social security spending, and is implacably against austerity.
I don’t know enough about economics to enter the fray with great confidence. My Economics 101 tells me that the market is great at seeking equilibrium where supply and demand keep each other honest, and the government regulates the environment to ensure this balance is good for everyone. It gets tricky, though, when you have to consider shareholding and trading on the stock exchange, or the impact of imperialist aggression and bullying on the ability of governments to manage policy. Add environmental factors to that mix and the consequences of climate change and the concept of balance is thrown out of kilter completely.
My gripe is that we seem to have relinquished our agency as thinking and rational beings, and will happily make decisions based on how ‘the market’ will behave. We designed the market as humans – it is an inanimate concept, and yet it designs how we behave. It seems to have especially little compassion for those at the bottom of the wealth pyramid. The loudest proponents of austerity always seem to be those with a lot, those who stand to benefit via their saved wealth or investments.
Surely as sentient beings we can make the rules that determine how we live? Surely we can find the courage to imagine something beyond what the current situation demands that we accept? Surely now is the time of the dreamers to get stuck in to find a different way to regulate our lives and our ability to survive.
Ashley Green-Thompson runs an organisation that supports social justice action.