This is partly a follow-up to my post about wrist issues and partly my thoughts about How Asia Works by Joe Studwell (which is 5-stars fantastic and you should read it if you’re interested in macroeconomics/national development/history).
Note: I recorded and wrote this in July 2021, but it spent a few months sitting around somewhere.
Briefly, before I hand off to the voice version (which you really don’t want to read): It’s a look at why some Asia countries (Korea, Taiwan, Japan) have been so successful, while others (Indonesia, Thailand, Philippines) have not, and basically ascribes it to three things:
The most peculiar part is that nobody seems to be fiercely critical of it. No Jared Diamond-esque panning of Studwell’s grand vision and confidence in his diagnosis. But I’m not here for that. I’ve been thinking about what lessons, if any, this book has for those interested in South Africa’s future.
What follows is the unedited (except for some hyperlinks) output from the iOS voice-to-text engine (I had a go with Dragon as well). It made me realise that speaking fully formed and coherent thoughts is a skill (that I don’t have). Speaking, whether in conversation or presenting, still gives one space to insert pauses and umms and ahhs and add subtle contextual meaning. But the voice engine wants perfectly considered sentences and paragraphs from the get-go.
I’m sharing this not because I think it might impress anyone (it won’t). I just thought it was an interesting record of one attempt to be coherent for seven straight paragraphs. I didn’t have a plan, or a script, or a structure - and it shows! If I ever need to rely on voice-to-text, I’ll need to become much better at this!
Bold title… Scott Alexander beat me to the chase on the How Asia Works review, but so so did Bill Gates and about 20 others so anyway. This isn’t going to be A review of that book that rather some thoughts on South Africa that were prompted by reading it. Very briefly though Joe Sneddon [I think this should be Studwell -ed] posits that successful development in the station was enabled by three things one land redistribution to 2 targeted industrial development with a focus on export and number three a controlled finance financial sector targeted and achieving interest of element goals. He is incredibly confident in these claims in local such books it really just begs for a strong reputation: unfortunately there doesn’t seem to be one go look at Scotts review so I have to take it at face value for now.
Reading the book my thoughts keep coming back to one question how does this apply to South Africa. It seems to be a third section in the explain all of everything genre the first camp is Jared DiamondWhere outcomes are determined by latitude and mountain ranges and nothing else: and although it’s extremely popular to dump on him I think the majority of people he picked up his book in an AirPods would end it much more thoughtful then they started. The second is the greatest books that place is democracy and institutional development above all else they tell us don’t worry about the specific policies and plans are implemented just make sure that you have functional representative democracy and strong institutions and the rest will follow until I read Snowdens [Studwell? -ed] book this is more or less where I stood and then finally they said and who says redistribute land implements export focused industrial development and rain in your financial sector.
So, where does South Africa stand? It was a non-democratic non-functioning pariah state until 27 years ago.The first time that actual development as a country entered the states to do list was in 1994.Of the three competing theories of everything diamonds [that is, the author, not the mineral -ed] is the least useful: it’s at the wrong end of Africa and has a few natural harbours not much we can do about that. So the remaining options are: focus on strengthening democracy or get to work redistributing land, and in the context of southern Africa many would say these are somewhat conflicting ideas.
On the institutions front, despite the best efforts of people like Jacob Zuma I’d say most would agree South Africa is doing surprisingly well notably said Jacob Zuma is currently in prison camp. Compared to China India Russia Brazil and Mexico we have extremely strong institutionsThat seem ready to ensure that the rule of law is ultimately follow. I’m sure smarter people have written about this but maybe 1994 wasn’t a completely blank slate and a functioning judiciary is a tradition that survived even apartheid. Even Mandela had an almost free and sensible trial while the state around it was a complete joke. That’s mostly just the judiciary and a functioning election system unfortunately they are the systems that run the country on a day-to-day basis are by and large bankrupt corrupt and broken so I’m not sure where the spitting in the theories of democracy equals development China for sure has skipped that idea.
On the other hand, is it too late for laundry distribution? Mugabe is bungling of this issue in Zimbabwe has made this in emotional topic in southern Africa. South Africa does do willing buyer willing seller land redistribution to people with valid claims of prior ownership of land that this is done on a purely model this is done with the goal of Writing wrong is rather than kickstarting agricultural development. It’s inefficient because the land must be bought and not particularly productive because the people who get the land don’t know what to do with it. Korea and Taiwan and Japan, during their successful redistribution programs, we are much much more ambitious and limited individual landowners to a few hectares at most. They also provided access to affordable capital training insures that markets worked relatively well to provide ideal conditions for individual and landowners with enough labour to maximise the shit out of their productivity could produce the maximum possible amount of food per hectare. Fascinating comparison I’ve read is that they can probably be about 100 timesMore productive per hectare than a commercial fun.
Could South Africa do this? My gut says definitely not: the East Asian success stories did this at a time when people were still farmers: the only problem is that they were rent fares or feudal. Most South Africans were removed from their farms or otherwise attracted to citiesLong ago and I doubt there is a particular urging to go back to farming no matter how attractive the subsidies a hectare of land in the middle of nowhere isn’t very useful in the hands of the second or third or fourth generation city liver. That said there are thousands and thousands of agricultural labourers labourers: Is there any way they could be more productive than their employers and a projector basis with the right support? With astronomical unemployment and enormous think of highly labour and efficient but highly land efficient firms might not be the worst idea.
What about industrial developments? Intuition suggests this might be a lot harder than Korea Japan et cetera had it; the world is very different then it was 40 years ago and the low hanging fruit of largely been chopped up by Korea Japan et cetera. Not to mention that South Africa is pretty far from any large markets. As for financial markets Jocelyn and advice to control capital flows is largely reaction to the IMF’s bungled programs with Latin America and in Southeast Asia where where fully liberalise capital markets were a complete disaster. However South Africa is way past the stage and has an extremely functional well regulated and liberalise capital markets and I don’t see this as a huge risk although I might be wrong.. however the incredible performance of the Johannesburg stock exchange relative to the absolutely dismal performance of the South African economy might be an indicator that capital allocation in South Africa has been optimised to enhance rents and wealth increase rather than broad economic development of the country.