The New York Times Screws Up Economic Policy Again: South Africa Edition

From the people who can't bring themselves to use the word "socialism" in articles covering the economic collapse in Venezuela, there now comes a big article on the economic problems in South Africa.  On Tuesday the big front page article in the New York Times was all about the economy in that country: "End of Apartheid in South Africa? Not in Economic Terms."  

It seems that now, some twenty-six years after the end of legal apartheid in South Africa, black South Africans just don't seem to be economically advancing much at all.  According to the NYT, South Africa has replaced the legal apartheid with "economic apartheid."

In the history of civil rights, South Africa lays claim to a momentous achievement — the demolition of apartheid and the construction of a democracy. But for black South Africans, who account for three-fourths of this nation of roughly 55 million people, political liberation has yet to translate into broad material gains.  Apartheid has essentially persisted in economic form.

But wait a minute!  Didn't the end of legal apartheid bring full democratic rights for black South Africans?  With blacks constituting a large majority of the citizens, isn't the government there now fully controlled by elected black officials?  Are you really suggesting that the black officials who now run the place are practicing something against members of their own race worthy of the highly charged term "apartheid"?

To be fair to the Times, they do mention government corruption as one of the reasons holding the economy back.  But then, if corruption is the main problem, wouldn't that affect all races, and not just blacks?  What's the thing that specifically holds blacks back?  We get this:

[There are] are deep-seated disparities in wealth. In the aftermath of apartheid, the government left land and other assets largely in the hands of a predominantly white elite. The government’s resistance to large-scale land transfers reflected its reluctance to rattle international investors. 

Aha!  Although the government is controlled by blacks, it's actually the evil white svengalis who hold the blacks back by clinging to the land, with the acquiescence of the corrupt government officials.  

Funny, but that's the exact same explanation for black failure to advance that has long been the favorite of Robert Mugabe and his political supporters in next-door Zimbabwe.  Over there, they took the opposite tack, and expropriated most of the land once held by whites, driving nearly all of the whites out of the country.  Surely then, all the blacks promptly became wealthy?

Unfortunately, no.  You may recall the first round of Zimbabwe's economic collapse back in the early 2000s, when Mugabe executed the first round of seizures of white-held land and handed it over to his supporters, mostly from his own tribe.  Among other things, tax revenues collapsed, so the government financed itself by printing money, leading to a huge hyperinflation.  Here is a report from NPR on where things were back in 2006:

Since the late 1990s, between four and five million Zimbabweans, or more than a third of the population, have fled the country. And the economy has shrunk by 40 percent. Last week, the City of Harare started rationing water because they can't afford to fix a pump by its municipal reservoir. . . .  The current economic crisis deepened dramatically in the year 2000, when Mugabe launched a chaotic and violent land reform program.  The program was supposed to return white-owned commercial farmland to poor blacks. But many of the farms ended up in the hands of Mugabe's friends, family and allies. And agricultural production, which used to be the backbone of the economy, collapsed.

And have things in Zimbabwe improved since then?  Actually, they're just going through another round of economic collapse now, as Mugabe, now 93, drives the last whites out of the country.  From Newsday (Zimbabwe), September 25:

President Robert Mugabe is expected in the country today, where he is set to be confronted by an economy literally on flames after a dramatic weekend that triggered scenes reminiscent of the 2008 hyperinflationary era. . . .  “In April, Mugabe made a pronouncement regarding the toxic indigenisation policy [i.e., taking land from whites and turning it over to blacks], but nothing has been done to align this to the Act. . . .  The economy has tanked. Everything that can go wrong has since gone wrong.

How does per capita GDP in Zimbabwe -- where they expropriated the white-held land and redistributed it to blacks -- compare to per capita GDP in South Africa?  The answer is, even after a couple of recent years of severe recession, South Africa remains many times as wealthy as Zimbabwe, for both blacks and whites.  Trading Economics has 2016 per capita GDP for South Africa as $7504; for Zimbabwe it's $908.  $7504 represents a middle-income country; $908 represents deep poverty for everybody (except Mugabe and his close henchmen). 

So is there any other explanation for why blacks may be failing to advance economically in South Africa?  Well, there is the fact that the government thinks the way to "help" the poor is to build millions of inexpensive homes and pass them out in a public ownership model.  See my post on this subject from April 2016 here.  It would be difficult to conceive of a better way to keep poor people trapped in poverty for life.  You will not find this subject discussed in the New York Times article.