World Needs New Winds of Change
My generation of political activists came to appreciate the role of historical and social forces in shaping change and development through the readings of Karl Marx and other historians such as EH Carr and Eric Hobsbawn. It was through this understanding that we became active in the politics of our liberation movement and the struggle for freedom in our country.
It was also through these perspectives that we theorised the role of the state in the political economy of SA. Whether we mastered the imponderables of the surplus labour theory of value, I am not sure, but we took Marx seriously when he proposed that "philosophers have only interpreted the world; the point, however, is to change it."
We have approached the reconstruction of SA's political economy not only with a deep sense of the injustices in the structure of our economy, but also of the deep inter-connections between our history and the evolution of political power, conquest, trade, technology and finance in a global context.
Clearly, an understanding of history has a role to play in appreciating and understanding societies and their development. On your fraternity rests our expectations that you will bring to bear different perspectives and deeper insights into the troubled times that we live in. This XVIth Congress is, therefore, timely. The issues you are discussing this week could have a great bearing on the problems that engulf the world economy, politics and society.
We are learning we cannot rely on elegant macroeconomic models alone to provide solutions to our complex problems. What is required is an engagement with a broader and more diverse community of social scientists, of which you form an important part. Equally important, we need a more dynamic and active discourse between scientists and practitioners, between analysts, researchers and decision makers.
The global financial crisis of 2008 has been a catalytic event, and, of course, for many it has been a traumatic event. It has altered the way we understand how the world works. It has accentuated the political, social and economic "fault lines" in our global society. The crisis has raised questions about the sustainability of the present path of growth and development. Among those are:
l The development of widespread inequality, and as a result the debate about 1 percent vs 99 percent.
l The growing unemployment, particularly among youth in many countries.
l The imbalance between the locus of production, growth and consumption.
l The role of the financial sector in relation to the real economy.
l The growing gap between the political and economic elites, on the one hand, and ordinary citizens on the other.
The present crisis has also highlighted new trends and developments. The developed countries are faced with a huge crisis and will be in the throes of debt and financial crisis for a long time. Some predict as long as 20 years. The bigger emerging economies have become the new engines of economic growth and reduction in poverty.
Developing countries will increasingly have to rely on creating their own economic trajectories. Major developing countries, such as Brazil, China and India, have shown considerable capacity to implement counter-cyclical policies and deepen their resilience in the face of uncertain global prospects.
Many African countries are in better shape today and have been able to sustain themselves by undertaking expansionary policies. Economic management in these economies has improved considerably. This contrasts sharply with the 1980s and early 1990s.
The Asian crisis in 1998 provided important lessons which have contributed to stronger institutions in developing countries today. And all of this demonstrates that history does matter. Lessons have been learned in many, but, unfortunately, not in all cases.
The crisis has had a better outcome for developing countries since they are better able to deal with external shocks and vulnerabilities in their economies. …