A South African Journey

I recently travelled to South Africa to research a novel. This was a journey taken 225 years earlier by a European ancestor of mine who sailed via the Cape of Good Hope for the East Indies. This ancestor never returned from the East—in those days journeys of that nature, lasting several months, were undertaken once in a lifetime, and usually performed one-way only. Today, one-way was a 16 hour non-stop flight from New York.

The first thing that struck me was that this was a developed country, if development could be measured in materially progressive signs like transportation, commerce and communications infrastructure. But on closer inspection, the country’s social fabric, a mere 20 years after the dismantling of Apartheid, is still mired in dysfunction. “Townships” remain on the outskirts of residential suburbs, and are run-down shanties in the most appalling conditions, while the “white suburbs” are opulent, sprawling and gated. Coloured communities straddle the middle ground. The new South Africa, post Mandela and de Klerk, is not going to copy its neighbour Zimbabwe and steal from the rich to give the poor, I was told; there has to be a willing buyer and a willing seller when it comes to land transfers. But with buyers without the means to buy and sellers unwilling to part with hereditary land, the impasse of inequality continues.

Political awareness is high among the locals, and no conversation ends without some reference to race. I was quite surprised when terms like “black,” “white” and “coloured” were thrown about so casually. Street protests and demonstrations were rife, be it breakaway factions of the monolithic ANC or students protesting the raising of tuition fees.

And yet, when you leave the messy people issues behind, the land is ruggedly beautiful and ever contrasting. From the stunningly scenic Cape Town and its cloudy sentinel Table Mountain, where everything began (at least for the white colonists), to the Cape Flats and its crumbling townships, to the fertile wine country in Paarl and Stellenbosch, to Hugenot country in Franschoek, to the dry Karoo with its scrub vegetation, acacia and agave, and then down and across the Eastern Cape with its giant pine and imported gum trees, the land is ridged with progressive mountain ranges, creating micro-climates within their valleys. Finally, one comes across the tallest range, the Drakensburg, that straddles two other environments: the grassy high veldt and the dry low veldt, the latter being home to the country’s famed Big Five and a myriad of lesser quadrupeds—a must-see for the avid tourist.

The complexity of South Africa came home to me in Johannesburg, the City of Gold, built on abandoned mine shafts, with splotches of gold from abandoned mines still adorning its landscape. The city’s history is littered with the carcasses of those who died from poor mine conditions, arsenic poisoning being the main killer; it’s labour history bears many travesties, among them: how mine owners reduced migrant worker wages by 50% in 1902 and kept them frozen for 60 years! The city’s core is virtually abandoned to hordes of immigrants (mostly illegal) who have forcibly occupied areas like Hillbrow, while new business districts like Sandton spring up on the periphery of this sprawling metropolis of 10 million. And yet enclaves like Houghton, covered in a blanket of purple jacaranda flowers, are islands of opulence and calm. I felt at home in Soweto, Jo-burg’s own township, a city unto itself of 3million where shanties jostled with modern haciendas replete with BMWs in their garages. Life was on display in Soweto, from street performers to open air restaurants, to “buy your own shanty” sales, to the bullet-riddled house of Nelson and Winnie Mandela that opponents used to drive by and take pot-shots at while Winnie and the children were still indoors. And there were some overlooked marks of embarrassment too: forgotten street signs of a bygone era, reading “Whites Only,” or “Coloureds Only”.

As I left South Africa with a book full of notes, I realized that Apartheid was still alive, even if only as a socio-economic reality, blighting this otherwise energetic, rich and beautiful country. I also realized that it would take many generations before that legacy is finally eradicated, if ever. It certainly will not be in my lifetime.

Do we need a black market? We do, for our own good.

I read with interest recently about the rise of the black market, a phenomenon taking place even in some of the more progressive economies like Canada and the USA. Some lesser developed nations have over half their GDP siphoning through the unregulated channel. Whole careers are sustained in the underground economy and entire industries function in this netherworld. And I am not talking about drugs trafficking, arms smuggling, software piracy and prostitution, “industries” that are not necessarily beneficial to society. I am talking about small businesses that prefer cash to credit cards for goods or services rendered: the corner store, the handyman, the plumber, the carpenter and an endless list of independent service providers. With small business becoming the fastest growing sector in most economies, is its very growth fuelled by that “extra cash” that did not go into a government coffer called “tax revenue?”

I wondered why this has come to pass. Is it because of the inefficiency in the regulated process, the bureaucracy, the backlog, the biased decision making – all factors that have sent people underground? Have we as buyers and sellers lost faith in the establishment? When governments and banks around the world start failing suddenly, as we have seen in alarming frequency since 2008, it’s no small wonder that people start looking after themselves first, on their own terms. And when governments keep saying that they want to be “less government,” then they are unconsciously signalling that they wish for less tax revenues.

Much of the regulated system is determined on the honour principle: the onus is on us as taxpayers and consumers to declare our incomes, our assets and how we obtained them, in order to be assessed fairly, and as faith in a regulated society wanes, and cheating the system becomes endemic and acceptable, and when governments renege on election promises, there is a strong compulsion to avoid declaring that hand. The black market becomes a sign of self•reliance without an interest in a public handout (or is that now called a bailout?)

Consider the flip side: would an economy – regulated and unregulated sectors combined – be as robust if everything was regulated? Would regulation kill creativity? Take the internet – the last bastion of unregulated enterprise it seems, or is it, with a battle raging today to muzzle and censor it? Would e•commerce have grown so rapidly had the internet been regulated from its inception? Would a regulated internet become just an information power grid and cease to be an incubator of new business models?

It seems to me that these two opposing market systems exist in a symbiotic relationship, each giving rise to the other’s existence, each taking pot shots at the other, each demanding the other to be creative. More regulation creates a black market and when these black markets get out of hand, that brings in more regulation. And the sum of the two is greater than the two halves.

Viewed from a historical context these two rivals have existed since trade began. Regulation was identified with those who were deemed to have legitimacy of government, however corrupt or immoral that government, from the time of ancient despotic kings to modern megalomaniacal dictators; both operate under the principles of “Might is Right.”

Makes one wonder whether the unregulated market is always wrong and the regulated one always right, or is it the other way around? Perhaps an economy split 50:50 between the two, scary though it sounds, may be best to keep these two sectors jostling each other and raising the wealth of nations as a result.

Therefore, do we need a black market? It seems so, if at least to keep the two halves of the economy honest. Ironic, isn’t it?

Men in Black – whose side are they on?

When I saw TV footage last weekend of the burning police cruiser in downtown Toronto, of the guys in balaclavas and black suits breaking windows of commercial establishments, and of the armour•bearing cops in black marching down familiar streets, herding protest groups into smaller segments to render them ineffective, I realized that our World Class City had finally lost its innocence.

The disconcerting factor was that I was unable to distinguish which of these groups of men in black were the good guys. The G20 leaders were calling their conference a success, so their goons must be in the right, eh? Wait a second, what about the balaclava brigade’s claim that unless violence happens no one pays attention – how about that, eh? And what about our oblivious citizens of Toronto, who have always taken their good city for granted, who were out that day walking their kids and their dogs and taking photographs of these costumed marauders, as if their streets had been taken over for the shooting of another one of those “Hollywood North posing as New York City” action flicks, and who were left wondering why they were suddenly being arrested and held in detention centres, or being asked for ID. “Damn it, I am a Canadian, eh, and a Torontonian, to boot! Don’t you recognize me, copper? This is a bad movie. Let me out of here!”

Just like our naive and hapless city dwellers who were stuck in the middle, we middle class taxpayers are now paying for the excesses of the men in black: $1bn in security costs and a bundle in property damage that will invariably find its way back into municipal taxes and insurance premiums for Citizen Joe Blow.

What also struck me was how similar these two groups of men in black were: in appearance, in their capability to do harm, and in their level of organization. Yet, they were on two diametrically opposite sides of the political spectrum. Have we polarized so much in what was once a middle class society, one in which everyone had enough to afford the basics of life, that we now have to take sides with either the haves or the have•nots, with either the ones with power or the ones wanting to grab a morsel of it?

My last book featured a protagonist who pursues the Middle Way, a back•to•the•centre approach, taking the best of Socialism and Capitalism and leaving the bad behind. Call it Enlightened Capitalism, or Liberal Socialism, if you will, a system, which once it takes root, eliminates the need for men in black, gated communities and beggars on the street. I was inspired by similar approaches taken by great teachers and wise political leaders in the past, albeit for brief periods in history, for greed always intervened to thwart their efforts. My “progressive” critics dismissed this approach as being archaic, utopian and idealistic. And yet, I wonder if our politicians have really found a better solution. When I saw that burning cruiser, I didn’t think they had.