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This extended Review Article assesses the changing role of the corporation in history, using the 2018 book by Oxford scholar Colin Mayer entitled ‘Prosperity’ as a basis for the analysis. This is a traditional review article centred around the Mayer book, but as we end we take our argument, albeit tentatively, to other related issues, beyond the Mayer argument. The corporation may be viewed in a positive sense as a creator of wealth and ‘prosperity’ for society in general, or as in a negative sense as generating ‘prosperity’ only for the few, shareholders and executives at the expense of the many, including workers, customers and future generations. Colin Mayer’s book visits both sides of this ‘prosperity’ equation and the title of the book derives from this recognition. Our argument is that even within the limits of contemporary neo-liberal global capitalism, corporations could be a force for more sustainable and balanced economic growth, as well as for social and environmental good. This requires a clarification of its ‘purpose’ as well as changes in the composition of its decision-making structures and revised mandates of its boards and sub-committees such as its remuneration committees that often have been given the power alone to determine executive pay. But we argue (albeit only suggestively) in the final section that the nature and variety of capitalism itself may have to be addressed alongside firm level changes for the long-term good and sustainability of a more equal society. Mayer shows that since its birth in Roman times, as an agency for promoting public works and the public good, the corporation has taken on many different roles, with varying purpose. Only in the last 50 years has the Milton Friedman doctrine, that companies should have only one role, of maximizing shareholder wealth, become the dominant explanation for the purpose of the corporation. We are not confident that corporations will voluntarily move in these progressive directions, especially given the continuing stranglehold of neo-liberal globalization. A push for broader social and economic change from below through struggle may be essential. JEL Codes: B1, N1, M14

The SA Reserve Bank (SARB) was created as a result of an earlier gold standard monetary crisis that unfolded after World War I. From 1919, South Africa nominally maintained the gold standard, but n...

This article re-examines existing interpretations of the ANC's economic and social policy choices during the negotiations that led to South Africa's democracy. The divergence but also convergence c...

Based on Bill Freund’s latest book, this review essay critically reviews the author’s discussion of: the institutional and network fibres underlying the mid-20th-century South African developmental model; how and why it developed; how and why it transformed through the course of that century; and how it was dismantled by the end of that century. The essay also tries to assess the significance of that model for South African development in the post-1994 democratic era, as well as the economic and public policy choices exercised by the African National Congress (ANC)-led government under conditions of fiscal constraint.

This Special Issue of the International Review of Applied Economics is focused on what sort of corporate forms should be promoted in the global south to promote economic, environmental and social s...

Geoff Mann admits only towards the end of what many have accurately described as a ‘tour de force’ (see Hart 2018) that he had set out to write a Marxian-Gramscian critique of Keynes resurrection t...

This chapter addresses the unfolding economic history of South Africa in the apartheid era (1948–94). The chapter is organized according to a periodization with 1971–73 as a marker of the break, and along specific thematic lines. These include a discussion of the way in which this history has been studied and through what theoretical lenses, before engaging with the main issues, including the impact of Afrikaner nationalism on economic growth, the way in which the minerals energy sector, which dominated early perspectives of South African economic history and perspectives, is impacted in this era of National Party rule. An analysis of the role of one major corporation (Anglo American Corporation) in shaping this economic history is followed by an assessment of the impact of the global and local crisis after c.1970 on the South African economy. An abiding theme is that of race and economic development and the way in which the impact of this key relationship of apartheid South Africa on economic growth has been studied.

This article aims to set out some progressive, mainly post-Keynesian, macroeconomic policy ideas for debate and further research in the context of macroeconomic challenges faced by South Africa today. Despite some successes, including at reducing poverty, the South African economy has been characterised by low growth, rising unemployment and increasing inequality, which together with rampant corruption and governance failures combine to threaten the very core of the country’s stability and democracy. The neo-liberal economic policies that the African National Congress–led government surprisingly adopted in 1996 in order to assuage global markets sceptical of its historical support for dirigiste economic policy, have simply not worked. Appropriate progressive macroeconomic interventions are urgently needed to head off the looming prospect of a failed state in the country which Nelson Mandela led to democracy after his release from prison in February 1990. What happens in Africa’s southern tip should still matter for progressives all around the world. The article draws on both history and theory to demonstrate the roots of such progressive heterodox economic thinking and support for a more carefully coordinated activist state-led macroeconomic policy, both in general terms and in the South African context. It shows that such approaches to growth and development – far from being populist – also have a rich history and respectable theoretical pedigree behind them and are worthy of inclusion in the South African policy debate. JEL Code: E12

This chapter assesses the role of politics from late apartheid South Africa to the ratification of the Constitution of democratic South Africa in 1996 as the country moved in step with global developments to secure the autonomy and independence of the South African Reserve Bank (henceforth SARB or SA Reserve Bank). While the nature of the negotiations over a political settlement appeared well organised with all major parties being well prepared, this was not the case in respect of negotiations over economic issues, which were marginalised and occurred in the periphery of formal talks. The rather messy discussions between the major political protagonists in respect of the economics of the transition is most clearly evident in the debate about central bank independence, which saw the market-oriented view of the late apartheid government prevail over the initial dirigiste policy stance of the African National Congress (ANC) which favoured greater autonomy for the central bank but not full constitutional independence. As negotiations progressed the two policy positions converged and central bank independence with a price stability mandate was enshrined in the interim and final constitution. However, some 25 years later certain political manoeuvres within the ruling party again potentially threaten the independence of the SARB. This research paper reports, among other issues, on an interview on this matter with former President FW de Klerk and with former central bank Governor Dr Chris Stals on the subject of how the South African government moved towards granting the Bank its independence during the transition to democracy in South Africa. After 25 years, central bank independence might have come full circle, with the current ANC government’s stated objective as agreed at its National Conference in December 2018 to ‘nationalise’ the SA Reserve Bank. While it is not clear what the real motives for this change may be (as the debate is clouded in political double speak), there is a danger, likely to be seized up by credit rating agencies and potential foreign investors that this is possibly the first step in taking the South African Reserve Bank under executive control again, as was the case in the 1980s.

In an assessment of the transition of the Afrikaans business sector to the post-democracy period in South Africa since 1994, the growth or the PSG Group since 1995 is remarkable. We use a biography...

Many commentators have pointed to the 1993 International Monetary Fund (IMF) loan, which occurred on the eve of South Africa’s democratic elections, as a key factor in explaining the shift in Afric...

Between the late 1940s and the early 1990s, Vella Pillay made a major contribution to South Africa’s liberation struggle. This article focuses on three aspects of his contribution: as a revolutiona...

The link between financial instability and inequality has been anecdotally evident for over at least the past century. So in France in the 1930s, we are told, the financial clouds of the times were...

Thomas Piketty’s Capital in the Twenty-first Century 1 (hereafter C21) has spawned a host of books, articles and reviews that take up and develop the study of inequality in contemporary Western soc...

Two rather long and imposing books, one by a well-respected South African economic historian, the other by a French economist, addressing themes of capital(ism) and empire from long historical pers...

Indian Currency and Finance (ICF), Keynes first book, remains 100 years after its publication, as relevant today as it was remarkable then. It anticipates many of Keynes key ideas now better associated with his Treatise of Money, and his The General Theory of Employment Interest and Money, as well as many of the central ideas of post-Keynesian economics. Issues such as the inherent instability of the banking and currency system and the importance of appropriate regulation to stabilise them, which Keynes addresses in ICF remain on the minds of analysts and policy makers today. It is a brilliant and prescient exposition by the young Keynes and is highly recommended to a contemporary readership.

Keith Hart and Vishnu Padayachee locate the development of South African capitalism in the context of global developments in the long twentieth century, arguably the first time that such an analysis has been attempted. This paper grapples with multiple relationships, including that between the local and the global, the universal and the particular, and the historical and the present. The durable features of South African capitalism since its modern inception, it is argued, are mining, racial domination and an uneven relationship between the state, finance and industry. Although the national economy went through long swings between an external and internal orientation, each of the main periods highlighted in their analysis has been marked by both.

The essays in this edited special issue aims to probe the nature and ‘varieties’ of capitalism that emerged and evolved in South Africa following the diamond and gold discoveries of the second half of the 19th century. Is there anything about the origins, evolution and structure of South African capitalism that is distinct or special? What are the continuities, and what the disjunctures, between the character of capitalism in South Africa before and since democratic change? Can one indeed talk about a model or models of South Africa capitalism? Are the rhythms of South Africa’s capitalist development, its cycles and crises, determined by and form an inseparable part of capitalist accumulation trajectories on a global scale? Or can one argue that while some components of any national economy today will be inextricably driven by global imperatives, this exists alongside (in either mutually supportive or antagonistic ways) a set of institutions and a history that is essentially national in character. Finally, how similar or how different is contemporary South African capitalism from other models of capitalism – viewed either as stylised, theoretical constructions or in relation to comparable middle-income developing or emerging market economies. These and related themes are set out in this first essay.

Padayachee examines developments in the culture and practice of corporate governance largely within the private sector in South Africa. His analysis reveals the dominance of powerful individuals, family trusts and groups sharing common social, cultural, and linguistic norms, bound together outside the boardrooms thorough old school, club, societal, political, church, sports and other such networks. A sound corporate governance culture based on transparency and disclosure hardly existed before and during the apartheid era. Since 1994 and as South Africa opened up to global economic circuits and institutional rules and practices, there has been a much stronger commitment, at least nominally, to compliance with developments in global corporate governance. The King codes of corporate governance (now into version 3) are the strongest indication of this. South African companies have over the last 18 years shifted from an initial state (a management controlled, 'social club' approach to corporate governance) towards an Anglo-American corporate governance model, practising what is widely referred to as 'shareholder wealth maximization'. But Padayachee argues that the practice of this approach remains uneven, as large family networks (both old and new) still exercise significant influences in boardrooms.

This working paper written in 2007 reviews a quarter of a century of economic policy debates and reflections in South Africa before 1994 and after the coming into power of the ANC. It focuses in the relationship between academics, experts and governmental actors, as well as with foreign economists. It demonstrates in very great detail the changing of mind and of proposition of former anti-apartheid activists and the subsequent alignement with international and national liberal orthodoxy. The paper concludes on a positive vision of what could be a more radical policy thinking and of a new militant mood of analysis.

This paper reports a comparison of South African household inflation expectations and inflation credibility surveys undertaken in 2006 and 2008. The objective is to test for possible feed-through between inflating credibility and inflation expectations. It supplements similar earlier research that focused only on the 2006 survey results. The single most important difference between the survey results of 2006 and 2008 is that female and male respondents reported inflation expectations at the same level in 2006, while female respondents expected higher inflation than male respondents in the 2008 inflation expectations survey. More periodic survey data will be required for developing final conclusions on the possibility of feed-through effects. A very large percentage of respondents in the inflation credibility surveys indicate that they 'don't know' whether the historic rate of inflation is an accurate indication of price increases. It will be necessary to reconsider the structure of credibility surveys to increase the number of respondents providing views on the accuracy of historic inflation data.

The South African Reserve Bank (the Bank) has achieved intermittent excellence in its quest to contain inflation since its establishment in 1921. This long experience highlights important experiences with inflation, which can be put to good use by central banks in other emerging-market economies. The conclusion is that there is no substitute for the long-run use of sound monetary policy in the quest to contain inflation.

Although enjoying some de jure independence, South Africa in the year of the SARB's establishment, 1921, was by no means a de facto independent country, being tied in important ways to Britain. However, by the end of the First World War, it was clear that British imperial power was on the decline almost everywhere. As the British real economy declined, the power elite in Britain had begun to focus its attention on maintaining London as the centre of the world's financial system, painfully aware that the financial sector was the last sector of the economy in which Britain still maintained some level of relative dominance. It is in this global context that a naturalized British expert, Mr (later Sir) Henry Strakosch, was appointed by the ‘pro-British’ Smuts government to advise on various monetary issues in South Africa, including the establishment of the South African Reserve Bank. Later, upon its establishment another Briton, Clegg, was appointed its first Governor. In contrast the Pact governmen...

This study reports the measurement of inflation credibility of a representative sample of the South African population in terms of an inflation credibility barometer. The barometer is an instrument measuring the degree of acceptance of the accuracy of historic inflation figures. These research results serve as a benchmark for South Africa, as similar measurement of a representative sample has not been undertaken before. The sampling results show little public understanding of the rate of inflation and its measurement of average price increases experienced by an average household. As generally accepted international benchmarks for successful central-bank communication strategies do not exist, the application of the methodology reported in this paper can improve the effectiveness of central bank communication aimed at improving the general knowledge about inflation.