Shaping policy less by the cult of personalities, and more by a new common and embedded interest, is really what inspired me to write this book. My time in politics and the state bore witness to the fact that many of the key decisions we take as leaders have less to do with the evidence-based correctness of a particular choice, and more to do with narrow and short- term political expediency. I think this has worsened over the past decade as the intellectual and strategic capacity in both the ANC and the state has withered.
In 2019, in response to his deep concerns about the state of South Africa, Jonas decided to write a book to record his observations and to propose solutions.
He had considered writing a book for some time about the current political and economic moment in South Africa, but he wanted to be absolutely sure that what he wrote would be relevant and useful to the national debate on how to progress our young democracy.
After Dawn is a book about the political economy. It is a book that determines how politics has shaped our economic choices and our fortunes, which now lie at the heart of our growth challenge. There have been many studies of our economy in isolation from our politics. After Dawn acknowledges that the two cannot be delinked and that we need to create a system that is able to move the country from dependence on a political elite to one that promotes innovation and administrative independence.
The book details why the country was ripe for state capture, and what we need to do to prevent a repeat.
The argument is that during the first 15 years of our democracy, our economy was large enough to support excessive politics and interference. Up until the 2008 global financial crash, our economic surplus, driven mainly by the commodities super-cycle and policy stability, kept the imbalances in our society in an uneasy equilibrium.
From about 2009, this began to unravel because the surplus required to balance the interests of the various competing constituencies that make South Africa was no longer present. This system now threatens implosion.
The essence of his argument is that the 1994 consensus – the social contract that enabled us to peacefully transition to democracy and which bound us together in the first two decades of freedom – is unravelling.
He argues that the 1994 consensus was built on four pillars:
- The historic elite or what we could call established wealth. This group was accommodated through macro-policy stabilisation and the political management of expropriation risk through, among other mechanisms, specific constitutional provisions.
- The aspirant black elite. This group was accommodated through a thin albeit powerful layer of boardroom Black Economic Empowerment (BEE), through public sector jobs and access to state-business patron- age networks.
- Organised labour. This group was accommodated through supportive labour legislation, collective bargaining and public sector unions, which have become increasingly larger and more powerful within the labour federations. They were incorporated through above-inflation wage increases with little emphasis on productivity.
- The poor and unemployed. This group was accommodated through fiscal redistribution as a result of a rapidly expanded welfare net. This ensured that the poor and unemployed remained more or less supportive of the transition, accommodative of the market-led policy choices and less susceptible to national or ethnic populism.
According to Jonas, this system is now unravelling (or rather has unravelled) and we are on a path towards major disruption.
The historic elite have grown frustrated with mixed policy signalling, corruption and the rising costs of business. They are withholding investment and investing elsewhere or investing in liquid rather than fixed capital markets where jobs can be created.
The new black elite have grown increasingly frustrated at the limited opportunities for inclusion in the concentrated and stagnant real economy, and more recently at the closing spaces in the patronage economy resulting from reduced fiscal resources, improved governance in state-owned companies and growing anti-corruption sentiments in society.
Lack of growth and consequent fiscal constraints have limited the available resources for buying acquiescence from public sector unions. Continued above-inflation increases for public servants seems highly unlikely in the short to medium term.
And the lack of jobs, coupled with the fact that levels of fiscal redistribution cannot keep pace with cost of living increases, has created heightened levels of grassroots discontent, which is illustrated in growing service delivery protests and populism.
In simple terms, this unravelling is being driven by three things: firstly, the model itself has been anchored on growth, which we have failed to achieve since 2008/9. Secondly, it was based on the assumptions about the effectiveness and efficiency of the state, which have proven misplaced as we have slipped backwards in this respect. Thirdly, the constituent elements to the 1994 agreement – business, labour, government, society and political parties – have become increasingly self-serving and concurrently dislocated from their base.
In essence, Jonas argues that we have a leadership crisis, combined with an existential crisis as a nation. We have no clear identity and no clear vision for where we are going.
This means that the scene is set for disruption. But what remains unclear is the form that this will take, what the likely outcomes are and the strategies we need to adopt to ensure a path to a constructive future.
His book makes a contribution to better understand the nature of the systemic challenges we face. His daily work through the CFC builds on what we need to do to transition to a new kind of politics and economy.
The country is in a crisis, warns Mcebisi Jonas
