The Knowledge economy and SA's election

The Knowledge Economy Rulz

I was struck the other day by a news item that in a nutshell summarised the opportunity and dilemmas inherent in this great global economic meltdown.

First though let me say that I didn’t feel that the current election campaign was turning out to be anything other than an anti-climax. There is no point in listening to the welter of messages being sent out by our motley crew of parties and contenders.

Perhaps there is a contest and the election date itself will reveal a ‘moment of truth’ as we like to pander it, but at this moment there are about a dozen parties all sounding the same as the current ruling party and one party that seems to be marginally different… By this time next week we will know that the majority will rule and that one swimming upstream will either have been brutally rejected or surprisingly strengthened.

I find everyone’s policies incoherent. I presume they are deliberately incoherent. They reflect the truth of our age: a truth we hate to acknowledge. There are no solutions to the circumstances in which we find ourselves.

The reason why there are no solutions is because ‘we’ [those who are in public office] are not working for the common good, as would be supposed, when remunerated from the common pot, but rather every opportunity seeking individual who joined the Struggle with the intention of achieving personal enrichment, seeks to build a lavish lifestyle [according to their fancies] from controlling access to real opportunity. This can only occur at the expense of the poor and ultimately it will cripple the nation no less than has been empirically demonstrated so many times over the past century in so many failed states, that it is actually boring.

The news item that caught my attention in a puzzled way was broadcast out of Bloomberg TV. Briefly it consisted of a story and an interview. The subject, a mid-life American male former construction company owner who had seen his business collapse following the real estate bust in the U.S. and had re-skilled as an independent currency trader.

I was forcibly struck in full force by the reality that we live in a knowledge based economy. The story explained how currency trading had become a big field of endeavour and the volume of daily trades in a wide range of such financial instruments as the euro, yen, ruble, sterling and of course dollars, had doubled over the past few years, and was a huge sum by any of today’s inflated standards.

As recently as a decade or so ago currency dealing, or as it was more arcanely known “arbitrage”, was a skill passed down from father to son over generations and was always a source of huge wealth to a limited pool of people who sensibly did not display their wealth [much] and thus were able to live happy rich and anonymous lives, unlike the vast mass of humanity who live poor and anonymously whether happy or not. George Soros, for instance also interviewed this past weekend on Bloomberg, will always inspire awe as the man who broke the Bank of England in 1992, such was the rarity of the skill.

Now a construction entrepreneur can 'take a course', he said, learn the ropes from expert sources and when interviewed was up at some 03.00 hours trading euros in an Australian market which he later sold somewhere else in the world. Now that is serious re-skilling and the market is providing the man with his opportunity as it always did… he simply shifted markets because he had access to knowledge.

America being what it is with a sluice way full of funny money pouring into the economy in tranches of trillions, a huge percentage of those losing jobs in the old pre-2009 economy will re-skill within the year and be re constructing their lives in a new, emerging and completely different world. There is something odd about trading a productive lifestyle building homes for people, to becoming one of an army living symbiotically off certain core lubrication points in the non-real part of the economy: the money part, but ultimately that is what the knowledge economy is all about.


The dilemma for those of us in developing country’s where the majority of our voters will never even conceptualise arbitrage, albeit they could all confuse it with arbitration, is that the Chinese strategy of undermining the American dollar by pricing their currency at about a twenty percent discount to the dollar; and then fixing the price so the dollar couldn’t shake it off, was to annihilate our [S.A’s] rather subsidy dependent textile industry, through flooding the country with ridiculously cheap, Chinese imports at the expense of both the Chinese worker and ours.

There is no quick fix, like learning currency manipulation to solve the employment conditions of former machinists and other clothing industry workers wiped out by the Chinese invasion. Sadly most will never work again. Similarly the hosts of warlike men dancing and chanting about our new emerging President may well find that like front line troops in all conflicts once the war is over they become superfluous to need; and while some may become remittance men, the rest will subside back into a sea of workless anonymity without the skills to construct their own lives out of nothing, as the construction man [and a million or so of his peers] will be able to do.

We are in recession now and have during boom times been barely creating enough jobs to even marginally dent the army of aspirant work seeking persons, who otherwise have no way out of poverty other than through criminal activities. We are no longer a society, which sees self-development as the solution to unemployment, those who now control the fortunes of the ruling party are of an essentially kollektivist mindset; and we are about to elect a populist leader who is promising things that cannot be under our present circumstances other than through actions that may well destroy the State itself, in any seriously productive form.

We remember I think that the last election was noted for posters proclaiming: “ vote for us we’ll bring jobs and wealth”. It was true that some people gained immense wealth beyond all dreams of avarice. For the rest it was ‘tata ma chance’ with the State controlled lottery with its State controlled winners. And that hasn’t happened on a scale sufficient to have any lasting impact. Right now we are shedding jobs much faster than they can be “created”: as entire industries struggle to survive the greatest financial meltdown in recorded history.

Frankly the last thing this country needs right now is a government that wants to emulate Hugo Chavez or worse and the only way that cannot happen is if every eligible voter goes to the polls next Wednesday and votes for change.

As many of you know this blog’s cynical definition of democracy enlarges on Churchill’s famous assertion that all government is bad, democracy is simply the best form of bad, by widening the frame to include the idea that democracy is about the citizen having an implicit, enforceable right to routinely change the gathered vultures who flock daily to the largesse table in search of easy pickings. [I would call them thieves but there is an election brewing and I wouldn’t like to be rude to those few people of integrity who, I am certain, exist in every party.] And it is time for a feeding frenzy adjustment.

Frankly I think it is time for a total change of government, even if it ends up as a coalition type of relatively unstable government… After all, Italy for instance, has virtually had no stable government for about sixty years and managed to be prosperous and successful; that is, until a couple of months ago when Sylvio [their prime Fatcat] passed a law making him immune to prosecution; and look at the shock wave that caused: an entire town fell down.

The Americans proved last year that they could vote for a dramatic change. Now is not the time to vote for a party with a covert Kollektivist agenda. We have no choice but to go with the market economy, it is the only form of economic activity that even partially solves the problem of superfluous human lives, and the market economy in the 21st century is a knowledge economy. So go and vote for change next Wednesday.