March 5th, 2018

folk economics

A published news source quotes South Africa's new finance minister, Nhlanhla Nene, as follows: "Our people are poor because there is a shortage of money in the country. It’s not the shortage of jobs that makes people poor, it is the shortage of money. We have paper and ink, so we will print more money and give it to the poor, and make all of them billionaires if that is possible."

It's really strange to see the economic ideas that Adam Smith tried to dispel in The Wealth of Nations (which argued that wealth was not money, but productive capacity) being brought back in such a pure form: not mere Keynesian economics, but out and out money-crankism. That Nene has an honours baccalaureate from the University of Western Cape in economics tells me a lot about the state of economics in South Africa. I fear Kipling's gods of the copybook headings will have the last word again, as they have in Venezuela:

"But though there was plenty of money, there was nothing our money could buy,
And the Gods of the Copy-Book Headings said: 'If you don't work you die.'"

It's strange to feel at the same time that a piece of news is hilariously funny and tragic.

Addendum: I have seen some doubt raised about the credibility of the news site that provided that quotation. I actually hope that it's not accurate; I would rather not see South Africa go the way of Venezuela or Zimbabwe.