What Prof Piketty doesn't know about South Africa

2015-10-07 16:18

Economist Piketty has stirred up a lot of attention around the world. But he really needs to understand the radical difference between South Africa and, say, Europe.

Firstly, does Prof Piketty know of any European country where 95% of ALL taxes are paid for by just 3.5 million people (out of a total population of about 54 million)? This figure was quoted by economist Schussler in an article about 2 years ago and I doubt the situation has changed much since then. Note - 95% of ALL taxes - income tax, VAT, corporate, CGT, estate duty etc. All paid by about 6% of the total population. 3.5 million people who literally pay for SA to run. They are already carrying a massively heavy load, and taxing them more isn't going to help.

Then on the issue of land reform/distribution, has Prof Piketty looked at what has happened in Zimbabwe? Total economic chaos as farmers' lands were expropriated by the government. Zimbabwe used to be an exporter of food. Now it has its begging bowl out for help from Western nations, and has to import food. Much the same has happened with farms that have been 'redistributed' in South Africa. Approximately 80% have failed.

These are the simple facts of life. Africa is NOT Europe. And Prof Piketty's 'one-size-fits-all' solutions simply do not apply here.

Applying the Gini co-efficient also does not work here in South Africa. The grim truth is that it has been the settlers who have come to SA that have primarily made the country the leading nation in Africa. This is an unpalatable and inconvenient truth, but unfortunately fact. If the settlers had not come, we would have had a much better Gini - all equally poor.

I do not mean to be racist in any way whatsoever, and love to see the success of Black entrepreneurs, who have got where they have on merit. May there be many, many more of them in years to come. But SA's poor standards of education, rotten skills training and high birth rate have condemned millions to a desperate future here.

The bottom line, Prof Piketty: Africa is NOT Europe, and one-size-fits-all theories simply do not apply here. These facts are the elephant in the room that we cannot ignore or merely wish away with economic theories.


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