Piet le Roux recently said that there is basically only one difference between a good economist and a poor economist: A good economist thinks twice.
When one is confronted with complicated questions surrounding poverty, the cost, language and quality of education, racism or corruption, the easy answer is unfortunately often the wrong answer. The reason for this is because people are not taking the law of unintended consequences into account.
And when it comes to simple solutions for complicated problems, South Africa is a world champion!
- People are poor? Let Government give them money.
- Salaries are low? Increase the minimum wage.
- Too few job opportunities? Let the state create work.
- Education is expensive? Make it free.
- Language of instruction is a problem? Let everyone study in English.
- Corruption is a problem? Get another ANC President.
- Too many matriculants fail? Lower the pass rate.
- Some people are racists? Throw them in jail.
The problem with these types of speedy solutions is that they are merely justified in terms of the immediate consequence of this intervention. When the immediate consequence is meaningful, the book is closed and the speedy solution is carried through, often without blinking an eye to consider what the long-term consequences, or the consequences of the consequences will be.
It was recently revealed that almost a fifth of graduate doctors in 2017 cannot start working because Government doesn’t have money to make enough jobs available in state hospitals. This means that 307 doctors who are obtaining their degrees in 2017 cannot start working in a medical field because they first have to work for the state for two years before they can be registered at the Health Professions Council of South Africa (HPCSA).
This crisis is what they like to call a double whammy: The budget deficit is of course a consequence of Government’s speedy solution with regards to the grievances of the #FeesMustFall movement that education is too expensive. Certain state institutions were simply forced to cut their budgets to the bone … and some even a little bit deeper. At the same time, the state is interfering in the market to such an extent that qualified people may not practise before they are registered with the HPCSA and that they may not register with the HPCSA if they haven’t worked for the state for at least two years. If people work for the state they must of course be paid by the state, but if the state is unable to pay, no one can work for them … and subsequently the system crashes!
The cruellest example of the law of unintended consequences is most probably the ruthless manner in which black empowerment is applied. The problem is defined as inequality (which is by the way not South Africa’s biggest crisis). What is the state’s solution to inequality? Upliftment? No way, that’s too difficult. Which democratic elected party will in any case tell its voters to work harder if you can rather tell them that you will take the properties of other people and distribute it among your supporters? This is of course the unintended consequence of democracy in the Third World. The state’s short-sighted answer to inequality is representativeness. Society will be considered “equal” if the national population distribution is represented on all levels of society. In the process the only sustainable solution, namely quality education, is thrown out with the bathwater.
The consequence of this – maybe not in theory, but definitely in practice – is that qualified white people are cast out to make room for unqualified black people. In Bloemhof, for example, the local government lost the ability to maintain the sewage system. The consequence of this was that people drank contaminated water. At least three children died as a result of this.
Don’t be bluffed by politicians seeking to hold up speedy solutions for complicated problems. It is because of this short-sighted speedy solutions that South Africa dropped 14 places on the World Happiness Index and is standing on the verge of junk status.
Ernst is Deputy CEO of AfriForum
Follow Ernst on Twitter at @ErnstRoets