How Keynesian is Zuma?During the Sustainable Development module this week I did a lecture that included an introduction to Keynesian economics. My argument was that Keynes believed that democracy could only be protected from the threats of state communism and fascism if the state intervened to limit the extremes generated by booms and busts: monetary policy is used to temper the booms (with interest rates) and fiscal policy is used to stimulate demand to counteract recessesions. Is this was Zuma is doing? Surely, threats from the left are present as poverty gets worse, and threats from the right exist as business effectively threatens disinvestment. How Keynesian was Zuma’s emphasis on massive infrastructure investments to support economic growth? Keynesianism is not just about interventionism – it is about interventions aimed at creating full employment within a capitalist economic framework and providing a welfare framework for those who cannot work. Is full employment the aim of Zuma’s infrastsructure investment programme? I am not sure. I think it is largely about putting in place the infrastrucuture needed to boost the mining sector, and in particular exports to meet the primary resource demands of SA’s new friends in the ‘BRIC plus’ club. Yes, there was some emphasis given to beneficiation, but I suspect that lowering port fees and improving rail for materials is mainly increasing reliance on exports of primary resources. I am not convinced that this is a job creating strategy. What is Keynesian is our welfare policy – this remains in place. But for how long can we fund this from exports of priimary resources?
