By Steuart Pennington
I am in the process of reading ‘Why Nations Fail, The Origins of Power, Prosperity and Poverty’. Haven’t finished it yet, but thought my review may encourage some useful Festive Season reading!
There are a number of interesting pointers which I think should influence our lexicon in SA. So, to paraphrase, early on the authors discuss the issue of inequality and state failure and point out that it has little or nothing to do with;
Geography (Africa hot with disease vs Europe temperate);
Culture (African manyana vs Chinese work ethic);
Ignorance (Europe inventors vs Brazilian tribes/African traditions)
They illustrate this by inter alia comparing North Korea and South Korea in 1950, same geography, same culture, same knowledge, same level of ‘inequality’; but in 2025 very different countries, one authoritarian, poor and with extreme inequality, and little in the way of individual liberty and institutional protection; the other an emerging global success with considerably more wealth governed mostly by libertarian institutions (not perfect, but very different countries 75 years down the ‘development’ road). They explain that it’s really, and only, about political and economic ‘institutions’, a purposeful choice between those that are designed to serve the elite, to extract (North Korea); vs those designed to serve the people, to include (by protecting property rights, upholding the rule of law, developing education, enabling security, promoting economic growth (South Korea).
The authors label the institutions that serve the people as being ‘inclusive’ and those that don’t as being ‘extractive’ They give many examples of countries where a regime has been overthrown by dissatisfied people only to have the new ‘political’ regime mimic the previous one, using the migration from ‘colonial’ rule to ‘independent’ rule where the political power elite changed but the political ‘institutions’ largely remained the same as were the economic ‘institutions’, – largely ‘extractive’.
I think in SA’s we are witnessing this; In our 1994 ‘transition’ many of our political institutions were re-designed to be more inclusive through the promulgation of a constitutional democracy, BUT, more recently we have witnessed the wider enforcement of BEE, Equity plans etc designed to roll back the ‘inclusive’ progress and enable a return to ‘extractive’ institutions, designed only to enrich the elite. Likewise, the promulgation of EWC, NHI, BELA, 143 race laws does the same, as does the mismanagement of our 700 SOE’s through the appointment of crony boards. It may be argued that in one form or another State Capture has been going on since 1948. The ANC are doing what the Nats did, manipulating the ‘political’ institutions to create extractive ‘economic’ institutions that enrich the elite and disincentivise, even hobble, the masses from entrepreneurial economic endeavour, security and personal liberties.
Thankfully, as my newsletter argues, there is considerable momentum to reverse this insidious creep.
Worth a read!
Enjoy the Festive Season!
Published by Crown publishers in the US, Profile Books in the UK
ISBN 978 1 84668 430 2
eISBN 978 1 84765 461 8
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There are a number of interesting pointers which I think should influence our lexicon in SA
The post Why Nations Fail, The Origins of Power, Prosperity and Poverty – by Steuart Pennington appeared first on The Home Of Great South African News. Read More
