On page 53 of the 100-page atlas Google published this week sits a map that would have puzzled the cartographers of empire. It colours each country by the share of its AI conversations that are about work. The United States is pale. Western Europe is pale. Africa is the darkest continent on the map – and, for once, for the right reason.

The atlas is Google’s first serious attempt to chart what people actually do with its Gemini models: 15 million anonymised conversations from a two-week window in April, spanning 150 countries and 140 languages. Globally, 13.5 per cent of conversations are work-related. In the United States and the European Union the share falls below that. Across a broad swathe of Africa – from Mali to Mozambique – it exceeds 16 per cent. Google’s economists call it ‘a surprising inversion’ and offer an explanation: professionals in developing economies ‘could be leveraging it more intensely as a productivity multiplier to bypass traditional business constraints’. A survey by Ipsos and Google puts the same point more bluntly: 91 per cent of Nigerian AI users say they use it to assist with their work – the highest share of the emerging markets surveyed, ahead of the UAE, India and Brazil.

Below, I combine Google’s map with newly released usage data from Microsoft, OpenAI and Anthropic to work out where South Africa stands. Among the things you will learn: why one in four working-age South Africans now uses AI (a higher share than in Japan); which South African number has not moved once in OpenAI’s rankings in five quarters; which province uses Claude more intensively than Gauteng; and why nearly half of the Eastern Cape’s AI conversations are about coursework. Also: what AI assistance with household tasks is worth...

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The OpenAI Foundation holds an enormous fortune. It owns just over a quarter of the company, which at today’s valuation is worth around $220 billion. Anthropic’s seven co-founders have promised to give away 80% of what they own, and the firm runs the most generous donor-matching scheme in the history of Silicon Valley. Nan Ransohoff, who runs public goods at Stripe and has done the sums more carefully than anyone, reckons all of this could release somewhere between $37 billion and $100 billion a year in new philanthropic giving. American charitable donations already run to about $600 billion a year. We are about to add a sixth of that, almost overnight, and nearly all of it earned by the same people, on the same technology, at the same moment.

This is a new gold rush.

We have had one before. In a 2023 paper in Past & Present, the historian Caitlin Harvey traces how the gold and mineral booms of 1848 to 1910 paid for a whole generation of universities – what she calls ‘the goldfield foundations’. Berkeley, Melbourne, Adelaide, Otago. And three of our own. The University of the Witwatersrand sits on the gold reef that made Johannesburg. The University of Cape Town grew up on mining money; the Rhodes Memorial still overlooks its rugby fields. Stellenbosch, where I teach, owes its independence to Jannie Marais, who made his fortune on the Kimberley diamond fields and left much of it to a university. The mines may have closed, but the universities remain.

So here is the question worth asking of this new gold rush: will it, too, build universities?

Almost certainly not. Frontier research now depends on computing power, data and salaries that sit inside a handful of firms rather than inside universities – more on that below. And these donors are in a hurry. They believe the coming decade will decide how the AI transition goes, so they are unlikely to spend it founding new institutions. If not universities, then what?

Two answers are already on the table. I think both are, at best, incomplete.

The first is Ransohoff’s own. In a widely-read essay she argues that we need a ‘Silicon Valley for public goods’: thousands of new ‘philanthropic startups’, a class of ‘philanthropic VCs’ to fund them, talent recruited out of tech and paid in equity, and a venture capitalist’s appetite for risk and speed. Her diagnosis is largely correct. The binding constraint on all this money is not the money; it is the capacity to absorb it well. GiveDirectly, one of the few organisations that can move cash at scale, has said it could spend perhaps $500 million a year, a tenth of $5 billion and a small fraction of a $50 billion potential funding stream. So the money will need organisations to receive it.

But building a new apparatus from scratch has a cost that the essay understates. It operates apart from the two institutions that development actually depends on: the state and the market. A parallel philanthropic economy, staffed by people recruited from San Francisco and answerable to the funders who pay them, is not obviously what a middle-income country most needs. So, what is the alternative?

A second option is the nostalgic one. With USAID gutted and official aid falling across the rich world, why not let AI philanthropy simply replace it, and become the foreign aid that governments no longer wish to give?

Because, as I argued on this blog a year ago, that breaks the two principles that should govern any transfer of this kind. Foreign aid must not disrupt the relationship between a government and its citizens: the moment a health system answers to a donor in California rather than to voters in Lusaka, the fiscal contract that makes states accountable weakens. And aid must work through the market, not replace it; money that distorts local prices or crowds out local firms leaves a country poorer the day it stops. Ken Opalo has made the state half of this case with more force than I can: three decades of substituting NGOs for the government has weakened state capacity across Africa, and the way to reverse it is to put elected, accountable, imperfect governments back in charge. Axel Dreher’s careful surveys point the same way. Aid does least for growth and most for whatever the donor privately wanted; and when it stops abruptly, as it just has, the cost can be measured in conflict and in lives. Putting AI money into that system would not repair it. It would only sustain something we already know can leave a recipient economy worse off.

Which brings me to my own profession. Oliver Hanney, who edits VoxDev, has written a forceful case that development economics is failing the AI moment – too reliant on the randomised controlled trial to say much about the larger questions AI raises – and, in this FT interview, he says he would like the AI labs to hire more development economists. On the first point he is right. On the second I disagree. We do not need more development economists, at least not the kind who spend five years measuring whether one app raised one test score in one district. If this money is to fund economists at all, it should fund the ones who study innovation, firms and science: the economics of how growth actually happens. Those are complements to the market and to the state. The randomista is too often a substitute for both.

So what would I do, if I had this money to give away?

I would endow chairs.

Endowed chairs are one of the clearest examples of a wider kind of gift: one that works alongside the state and the market rather than around them. And not at Harvard or Oxford; they are well provided for. And not yet at the universities too weak to use the money well. I would fund permanent chairs at the institutions ranked, say, between 100th and 600th in the world – the strong universities in the middle, with the talent but not the endowment – at the new intersections of fields: AI and economics, AI and biology, AI and ethics. I would pay the holders at the top of the global market, enough that the best Kenyan or Brazilian or Indonesian in a field could do frontier research at home rather than move to a firm. And I would give each of them a substantial budget for computing.

The striking thing is how little this would cost. By the QS rankings there are 504 universities between the 100th and the 600th in the world. Endow a $20 million chair at each and the whole thing comes to about $10 billion – still less than a twentieth of what the OpenAI Foundation alone is worth. And $20 million buys very different things in different places. Given what American industry now pays its AI researchers – of which more below – it might stretch to a single chair, with the computing power to match, at a university in the United States. In a country like South Africa the same sum endows not a chair but an institute: a senior scholar, a bench of postdocs and doctoral students, the research staff around them, and the compute they all depend on – in perpetuity, and at the frontier.

It is worth seeing where they would be (see map). They are on every continent: the middle-ranked universities of North America and Europe, but also the Indian Institutes of Technology, the great public universities of Latin America, the research universities of Southeast Asia and the Gulf. And among them sit the survivors of the last gold rush. Berkeley and Melbourne have long since climbed into the global elite and need nothing; but Otago, built on the Otago diggings, Cape Town, raised on mining money, the Witwatersrand, on the reef itself, and Stellenbosch, on Marais’s diamond fortune, all fall inside this band. The universities the last boom built are precisely the ones the next one should endow.

I am not being sentimental about universities. This is the one intervention that answers a problem we can now measure. In a recent NBER paper, Ufuk Akcigit and colleagues track 42,000 AI researchers through two decades of American tax and publication records. The top 1% of AI scientists in industry now earn about $1.5 million a year more than comparable academics – a gap that has widened fivefold since 2001 – while academic salaries have barely moved. The response is what any economist would predict: researchers are moving to large, established, well-resourced firms, and from open, published science to patents held privately. Universities are losing their best researchers because they can neither match industry salaries nor provide comparable computing power. A well-paid, well-resourced endowed chair is designed precisely to close that gap.

There is a precedent for exactly this kind of gift. Between 1883 and 1919 Andrew Carnegie funded more than 2,500 free public libraries around the world – 1,687 in the United States alone, and one at Stellenbosch University itself. For a long time these were dismissed as a rich industrialist’s monuments. Then economists examined them. In a paper just published in the Review of Economics and Statistics, Enrico Berkes and Peter Nencka compare American towns that built a Carnegie library with near-identical towns that qualified for one but, for local reasons, did not. Patenting in the library towns rose by 10 to 12 per cent over the following two decades, and the additional inventors were disproportionately women and the foreign-born – the ‘lost Einsteins’ that economies routinely fail to develop. The two groups of towns patent at the same rate for twenty years before the grant and diverge only once the library opens (see figure). Gregory Gilpin, Ezra Karger and Nencka find a similar effect today: invest in a library and the reading scores of nearby children rise. Free access to knowledge is, on this evidence, one of the highest-return public investments we have measured.

This is the clearest lesson economic history offers: prosperity comes from ideas, ideas come from access to them, and the societies that broaden that access grow faster. Endowed chairs are the equivalent, in our century, of the Carnegie library: the same investment in knowledge as a public good, applied where the scarce input is no longer the printed book but the trained researcher and the computing power they require. And, like the libraries, they satisfy both principles. They leave the government to govern and the market to operate, and they add to the stock of knowledge that both depend on.

There is a more radical version of this idea. Instead of endowing chairs at strong universities everywhere, aim the whole fund at the places that need it most, and make each gift larger: not a chair but a research institute, fifty million dollars apiece, and only at universities in the developing world that already sit in the global top thousand. Set aside China, the high-income countries, and the states whose sanctions put them beyond an American donor’s reach and the QS rankings leave 219 of them. An institute at each would cost about eleven billion dollars: close to what the chairs would, and still only a twentieth of the OpenAI Foundation’s stake. The map, though, looks quite different. The weight shifts south and east – thirty-seven institutes in India, two dozen across Malaysia, a long band through Southeast Asia and Latin America – and, for the first time in this story, Africa appears in numbers – nine universities in South Africa, five in Egypt, and one each in Ghana, Ethiopia and Tunisia – though I would make the case for a few more, perhaps adding Senegal, Nigeria, DRC, Rwanda, Kenya, Angola and Tanzania to the list.

The last gold rush understood something this one has not. Marais and Rhodes and the diggers of the Rand did not set out to abolish poverty within a decade. They built institutions that outlasted them, and, as it happened, outlasted the mines that paid for them. A century later, the reef beneath Johannesburg is nearly worked out; the University of the Witwatersrand is not.

This boom will also end, as booms do, and some of today’s valuations will look absurd in hindsight. The question is what will remain when it does. Fund an apparatus that operates apart from governments and markets, or use the money to restore an aid system we already know distorts both, and little will last. Fund the researchers who produce knowledge, and pay them enough to stay, and this gold rush may leave what the last one did: universities that outlast the boom that paid for them.

Now to convince a billionaire.

In April, on a stage in Washington, DC, Sim Tshabalala made a claim that would have sounded reckless five years ago: South Africa could lift its medium-term growth rate to between 3 and 4 per cent. The chief executive of Standard Bank, Africa’s largest bank, grounded the claim in something other than commodity cycles. ‘There’s a direct correlation’, he said, ‘between the rule of law and GDP growth.’

As you read this, I’m on my way to Johannesburg, to give a talk at Standard Bank. My topic is broad – ‘my team and I would very much like to hear your historically and comparatively informed perspective on what can and should be done to accelerate growth in SA, and on the likely effects of AI on our economy’ wrote Tshabalala. Below I share my ideas. I hope that by the end of it you will know how countries that start at South Africa’s current income level have doubled their living standards within twenty years; how fast AI capability is actually growing, measured properly, and where the two models released this month sit on that curve; why the poor got this technology faster than any before it, and why that weakens the standard argument for state intervention; and what the machines themselves think a bank is for in the economy they are building…

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On Monday I typed my name at the bottom of a one-page statement titled ‘We Must Act Now’, joining Erik Brynjolfsson, Daron Acemoglu, Joseph Stiglitz, Ben Bernanke and dozens of others – among them more than a dozen Nobel laureates. The statement warns that AI may become radically more powerful over the next ten years, driving a transformation of the economy ‘larger than the Industrial Revolution, but unfolding over a vastly shorter time frame’. It calls on economists to help build the incentives, guardrails and institutions to steer the technology well.

Most of my co-signatories worry about jobs and wages. Those are real worries, and I share them. But signing from the southern tip of Africa, I found myself worrying about something stranger: what AI might do to morality itself.

Let me explain.

Where do our morals come from? The Sunday-school answer is: from above. The answer emerging from economics, psychology and evolutionary biology is: from below – from the daily business of making a living together. In two recent papers, the Harvard economist Benjamin Enke reviews a decade of research on what he calls moral boundaries. The foundational idea is that morality is functional. In his words, it ‘evolved as a form of “psychological and biological police” to enforce prosocial behavior and cooperation, including in economic production and exchange’. Groups whose members kept promises, punished cheats and helped their partners outproduced groups whose members did not; our consciences are the enforcement technology that survived.

If morality is a tool for cooperation, it should differ across societies according to who people need to cooperate with. And it does. Everyone loves their family more than a faraway stranger; the moral question is how quickly that love falls away with distance. Economists call people whose care declines slowly universalists, and those whose care is concentrated on kin and clan particularists. Neither is more moral; they simply spend the same moral budget differently. As Enke quips, universalists are great strangers to encounter, while particularists are great friends to have (choose your dinner guests accordingly).

What moves the slope? Need. In societies built on tight clans – where your harvest, your safety and your marriage all depend on kin – loyalty pays handsomely and trusting outsiders pays nothing, and the moral system matches: fierce in-group devotion, revenge, shame. Where people make their living trading with strangers, the moral system tilts towards impartial fairness, internalised guilt and trust in outsiders.

The evidence for this is remarkably wide. Enke coded the folklore of nearly 1,000 preindustrial societies and found that those with markets and money told morally universalist stories. In Ethiopia, Devesh Rustagi compared villages by their distance to historical marketplaces: villagers who live closer – and so trade more often with people they do not know – cooperate more readily with strangers in experiments. In Greenland, traditional hunters cheat anonymous strangers in the same games; their market-employed neighbours do not. And survey data from sixty countries show that cohorts who lived longer under democracy – that great machine for impersonal cooperation – are more universalist than their compatriots who did not.

The pattern is consistent: when making a living requires trusting strangers, we learn to value them. When it does not, we do not.

For most of recorded history the direction of travel was one way. Markets expanded, cities grew, institutions scaled, and the circle of people we needed – and therefore the circle of people we valued – widened from the clan to the village to the nation and beyond. The philosopher Peter Singer called it the expanding circle. An economist would call it a repricing: strangers became useful, and morality adjusted.

Now for the question that one-page statement forces on us. What follows is not a forecast. It is what happens inside a model economists already believe – Guido Tabellini’s 2008 model of how parents decide whether to raise universalist children – when you ask it one new question: what if the strangers stop being human?

In Tabellini’s model, parents pass on values by asking, in effect, two things. Who will my child mostly deal with? And will dealing with distant strangers pay off? If the answers are ‘strangers’ and ‘yes’, they raise universalists. If the answers are ‘kin’ and ‘no’, they teach loyalty and caution. Simulate the model from 1800 and it reproduces the moral history sketched above: as markets and democracies raise the returns to impersonal cooperation, universalism climbs, generation by generation.

Then let AI arrive, and the path forks on a single parameter – whether the technology raises or lowers the returns to impersonal cooperation between humans.

In one branch, AI is the new trade route. It translates languages, verifies reputations, shrinks the cost of dealing with someone you have never met, and pulls more of humanity into productive exchange with itself. The returns to trusting strangers rise, and the circle keeps widening. In the other branch, machines take over the exchange itself. Firms produce with fewer people; algorithms mediate what workers once negotiated; the stranger across the market square becomes economically irrelevant. Nothing dramatic happens at first. But in the model, parents notice that trusting outsiders no longer pays, and invest their children’s moral budget closer to home. The circle sags, one generation at a time.

Of course, a model is not the world. Morality has flywheels the simulation ignores: religions, constitutions, schools, the sheer human pleasure of company. Values move over generations, not quarters, which leaves time to steer. That is precisely why the statement says ‘now’.

But the mechanism is anything but hypothetical, and we need not wait for 2100 to observe it. Cue South Africa. A third of South Africans who want to work cannot find it; among the young, the share is closer to half. That is millions of people whom the production side of the economy, in the coldest sense of the phrase, does not need. The functional theory of morality predicts what should follow – trust retreating, circles tightening, the stranger recast as a threat – and two decades of stagnation, eroding social trust and periodic xenophobic violence read uncomfortably like the prediction. Benjamin Friedman made the general point in The Moral Consequences of Economic Growth: broadly shared growth buys tolerance and generosity; stagnation calls in the loan. On this one dimension, South Africa may already be a preview of the AI future the statement warns about.

I remain optimistic, as always. Perhaps the machines will release us from the dreary office and its spreadsheets into the social spaces where we cooperate more, not less. We’ll do Hyrox. We’ll go to yoga. We’ll play padel, sing in choirs, run parkruns, braai with the neighbours we currently only greet over the wall. We’ll have more time to watch World Cup fixtures, even if they expand the tournament to 64 teams!

We have flattened that curve before. Marketplaces did it. Constitutions did it. A dominee or two probably helped. The wide circle we now take for granted was built, transaction by transaction, because we needed each other. The machines will decide a great deal in the coming decades. Whether we keep needing each other is still ours to choose.

On the evening of 14 July 1926, in a room at the London School of Economics, a small group of scholars sat down to inaugurate the Economic History Society. Everything, in the words of the Society’s later chronicler T. C. Barker, was ‘cut and dried’. Tawney took the chair. The constitution was approved. William Ashley was elected president; Eileen Power and F. W. Tickner joint secretaries; a council drawn from Manchester, Aberystwyth, Edinburgh and Harvard. We are not told how many people attended. The prospectus had been printed in ten thousand copies, and Lipson had agonised over whether the page should carry 43 lines or 44.

That was a hundred years ago this past Tuesday.

What the founders could not have known, as they settled their orderly constitution, was that they had built their Society on the lip of the most volatile two decades in living memory. Within three years, the Great Depression. Within seven, Hitler. Within thirteen, a world war that would scatter and kill many of the scholars whose field they were founding. Eileen Power herself was dead by 1940. Cut and dried it was not.

I have been thinking about that founding this week because I have just written a comment on a new guide to the future of the field – and the future looks about as settled now as it did in 1926…

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What, really, is the job of a columnist?

This week marks four years since I moved to Substack. I arrived in July 2022 with about 400 subscribers, carried over from my decade-old WordPress blog. Today there are more than six and a half thousand of you. Over the years I have experimented with length, frequency, subject and tone, and have now settled into a rhythm: a free column on Mondays and one behind the paywall on Thursdays, though I still think of it as my Friday column.

Sometimes people ask me why I write. I do not have a very good answer. I like writing. I like sharing ideas. I like the discipline of having to make sense of something in public twice a week. Other times I am asked why it has been ‘successful’. But I am not sure what success looks like. Likes? Some of my best posts attract only a handful, and social media traction is too idiosyncratic to read much into. Subscribers? Better, perhaps, but even that does not quite answer the question. I do not depend on these columns for my daily bread, not yet at least, which makes it easier to write what I like. But the question stands: what is the column actually for?

There is, of course, always a recent economics working paper with an answer…

Consider the graph above. In the first quarter of 2014, the Sunday Times sold 408,458 audited copies per issue. A decade later: 60,759. City Press lost 90 per cent of its circulation; Business Day, 85 per cent. Die Burger is now South Africa’s highest-selling daily, at 24,161 copies, about a fifth of what PE Express, a free community paper in Gqeberha, hands out per issue. The Weekend Post closed in 2024, after 77 years.

The decline of journalism is a long story, bound up with the internet, though it does not begin there. It might surprise you to learn that the modern columnist was born out of an earlier attempt to save the industry.

The 1960s were a tough time for newspapers. In America, new media like television and the tabloid press threatened advertising revenue, accelerating consolidation across the industry. New York’s newspapers were especially badly hit. In 1962, some 17,000 newspaper workers went on a 114-day strike, bringing the city’s six daily newspapers to a standstill. While the dispute centred largely on wages and contracts, the strike is remembered as a battle against automation. From the 1930s, teletypesetting, machines that set type automatically from a coded tape, and later film- and computer-based systems had been making their way into newspaper composing rooms, where they threatened to displace skilled labour. The strike was ultimately resolved, but by the end of the decade four of New York’s dailies had shuttered.

Having survived the strike, the New York Times attempted something new: it introduced the op-ed page, short for ‘opposite the editorial’, a page of outside commentary facing the paper’s own editorials. Of the new section, the editorial team wrote: ‘We hope that a contribution may be made toward stimulating new thought and provoking new discussion on public problems.’ Fine sentiments. But, as it turned out, it was an economically shrewd move too.

The Times’ version of the op-ed page combined elements of existing opinion pages, namely regular writers alongside guest authors contributing a mix of commentary, opinion and analysis. But, unlike the existing opinion pages, the Times reserved something like a quarter of this precious real estate for premium advertising.

According to Michael J. Socolow, a media historian, the op-ed model proved highly profitable, even in the recessionary climate of the early 1970s. Part of this lay in how cheaply the section could be run: attract high-profile writers, pay them no more than $150 per piece, and use existing employees to run the department. Surveys found it was among the most read pages in the paper.

So, if the column saved journalism once, could it do it again?

Today, with the advent of the internet, and its gobbling up of ad revenue, the only viable option for journalism seems to be the subscription model. News24, for instance, crossed 100,000 digital subscribers a year or so ago to become Africa’s largest subscription news publication.

The newsroom of the future, in short, will be paid for by its readers.

Which raises an awkward question: what, exactly, are modern readers paying for?

Enter the paper: ‘What do news readers want?’ by Gregory Martin, Cameron Pfiffer and Shoshana Vasserman. They obtained something close to the perfect dataset: the complete digital history of a large American metropolitan newspaper from 2020 to 2023. That is 605 million article visits and more than 55 million encounters with its paywall.

The paywall is the clever part. Like most news sites, the paper allows a few free articles in a rolling window before demanding payment. But the meter is invisible. Readers cannot see how many free reads they have left; the limits changed repeatedly; the system glitched at random. The paywall arrives unannounced, and its quasi-random arrival lets the authors measure, article by article, what readers will pay to keep reading.

What readers click on and what they pay for, it turns out, are two very different things. The site’s biggest traffic drivers were syndicated advice columns, the agony-aunt kind that runs in a hundred papers at once. Subscriptions were triggered by hard news: public health, the economy, local politics. Willingness to pay for an average local-news article was roughly double that for an average entertainment piece. And the most-clicked articles attracted the window-shoppers least likely ever to subscribe.

My favourite detail is what happens after readers subscribe. Once articles are effectively free, they drift towards entertainment and the advice columns; while rationing scarce free reads, they spend them on hard news.

This is the kind of finding readers should be able to carry to a braai, a coffee urn or a dinner table and say: you will not believe what I read the other day. People click on the light stuff, but they pay for the serious stuff. They arrive for one kind of content and renew because of another.

The implications for strategy follow. A newsroom chasing traffic should hire entertainment writers and cut local news; a newsroom chasing subscriptions should do the reverse. Since digital advertising has collapsed anyway, and AI search summaries are expected to shrink what click traffic remains, the subscription logic wins by default. The content that keeps a subscription newsroom alive is the serious, civic, expensive kind: the very journalism the click era taught editors to doubt.

So where does that leave the columnist?

Consider one more finding. The revenue-maximising introductory price for a subscription is zero. The newspaper charges $0.99, essentially to capture your card details. And no pay-per-article price could recover more than about 61 per cent of the revenue of the standard bundle. The money is in the renewal: the monthly decision of an existing subscriber to keep paying.

That changes the columnist’s job description. Hard news breaks irregularly and brings subscribers in. The columnist writes to a rhythm. The column’s job is not to be read; it is to be renewed.

Comments measure attention; cancellations measure value.

But retention is only half the brief. The other half is which columnists earn it.

Noah Smith, an economist who left Bloomberg Opinion for Substack, where he now has more than 450,000 subscribers, asks the right question: ‘Why would people pay $10 a month for a single writer, when they could pay $25 a month for the entire New York Times?’ I charge $75 a year, about R110 a month, a shade less than a full News24 subscription at R119. So, the same question Smith puts to the Times, now closer to home: why pay me rather than all of News24?

Here is Smith’s answer: legacy opinion pages misunderstand their own product. They commission opinions, short, punchy polemics, when readers want analysis: forecasts, assessments, explanations grounded in evidence. Newsrooms treat their own opinion writers, he notes, as ‘tawdry entertainers rather than as respected analysts’. His Bloomberg editors pushed him to be more subjective, more politicised. Paul Krugman has described his New York Times column as 800 words through three levels of editing, ‘intolerable’, and he was barred from using charts. Krugman now writes on Substack, too, sending out a weekly piece to more than 580,000 readers. Both Smith and Krugman likely earn more than $1 million per year from paid subscribers; not bad for a mere columnist.

But it should not be that surprising, really. Opinions are abundant. Everyone has one, social media distributes them free, and generative AI now manufactures confident polemic at zero marginal cost: the information pollution I have written about before. No reader needs to pay for outrage. Analysis remains scarce.

Jasmine Sun, a writer covering AI and Silicon Valley, takes the argument a step further. As machine-generated content floods every channel, she argues, the value of summary collapses and the value of secrets rises: ‘reporting is the act of taking private knowledge and making it public’. And trust follows the messenger: ‘it’s not about the sentence. It’s about who says it and their track record.’

Which brings us back to economists. We hold the kind of secrets Sun describes. The research frontier circulates in working papers years before it reaches journals, let alone the public; a columnist who can translate that private knowledge into public knowledge is doing reporting, from an archive most journalists cannot access. And our training is precisely the analysis Smith says readers pay for: mechanisms, trade-offs, testable predictions.

Of course, columnists alone will not save the newsroom. Martin et al.’s most sobering result is that every newsroom loses money at the margin, that is, for each extra article it runs; even the best-performing desks generate less subscription revenue than a journalist’s salary, and expanding investigative reporting would need a subsidy of roughly $11,000 per additional article per year. James Hamilton argued two decades ago that newsrooms produced more accountability journalism than readers wanted. The new evidence says readers value it far more than their clicks reveal, yet still less than it costs.

The lesson? Columns can help a newsroom survive. They have done it before. They are cheap relative to investigative reporting, and they build the habit of renewal that holds the bundle together. But that only works if editors solicit the right kind of writer. The column’s job is to earn the next month’s subscription, and what earns it is scarce analysis from a voice the reader trusts. That is the brief the economist is built for: privileged access to the research frontier, training in mechanisms and trade-offs, and a track record readers can check. Hire that writer, and judge the work by whether readers return.

A century ago, Walter Lippmann complained that the newspaper reader ‘expects the fountains of truth to bubble, but he enters into no contract, legal or moral, involving any risk, cost, or trouble to himself’. The subscription era has finally produced that contract: renewable monthly, and easy to cancel with a click.

The columnist’s job is to give the reader a reason not to cancel.

On 5 May 1967, Prof AC Cilliers, a retired professor of theoretical physics and author of a book on the limits of growth, wrote an article in Die Burger lamenting the development of Stellenbosch:

As a unique entity, Stellenbosch today must be considered fully developed – or nearly so. Any significant further growth will undoubtedly distort its already threatened image as a rural and tranquil university town even more; and will ultimately cause it to lose its unique soul or ethos. Stellenbosch was never originally laid out or intended to become a large city. Yet the way we are proceeding now, it is rapidly on its way to becoming just that.

For example, one of the major business enterprises recently purchased the smallholding east of the new extension at Unie-Park to transform it into a new residential neighbourhood – which will make traffic to and from town via Van Riebeeck Street and Merriman Avenue, streets that largely encircle the university precinct, even worse than it already is. Another large business has bought a farm adjacent to the Dalsig extension, on the Strand side of town, and plans to build several hundred houses and a few apartment blocks. He wants to invest his money wisely, and has chosen Stellenbosch as the most attractive location for doing so.

Since the end of the Second World War, Stellenbosch’s population has increased rapidly to around 25,000, of which about half are white and the other half non-white. Where will it end? At 50,000 or 100,000 or even more, once all the hills and valleys surrounding Stellenbosch are built up?

In April last year, I published my own lament. In contrast to Prof Cilliers, I argued in favour of further development, prompted by the court-ordered halt of a luxury estate on the slopes of Botmaskop. I argued that the development offered not only ecological renewal and improved safety on previously neglected slopes but significant economic and social benefits: jobs for the unemployed, rates for the municipality and spending at local restaurants and shops. I suggested that the case for Botmaskop Estate remains ‘overwhelmingly strong’.

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Twenty-four centuries ago, a playwright put a professor in a basket.

In Aristophanes’ comedy The Clouds, staged in Athens in 423 BC, Socrates is hoisted up in a hanging basket while his students measure how far a flea can jump – by dipping its feet in wax to make tiny slippers. Into this ‘think-shop’ comes Strepsiades, a farmer deep in debt, who wants one thing from the university: to teach his son how to argue his way out of paying. He’s looking for useful, applied knowledge. A clear return on investment.

He does not get it, and promptly burns the place down.

What Strepsiades wants is plain: training that pays, a skill his son can take to market. Whether that is what a university is for, or whether it exists for something less immediately useful, is a question universities have never settled. What has changed is that it is now answered, every year, by a number.

That number is a ranking. Agencies such as the Center for World University Rankings (CWUR) publish a global league table in which Harvard comes first, and always does, because the scale is built so that Harvard scores 100 and every other university is measured as a fraction of it. CWUR then ranks the rest on four things: research output and citations, the prizes their staff hold, and the share of graduates who reach senior positions in large companies.

These rankings exist for a sensible reason. A student in Soweto cannot see inside a lecture hall in Stanford; a donor cannot audit a department. A ranking is a signal that makes hidden quality comparable, much as a university degree itself once did. The difficulty is narrower: what a ranking can measure is a small part of what a university is, and that part is losing its value.

A recent paper by the economists David Cutler and Edward Glaeser begins with what a university actually is, and finds the most durable institution we have built: of America’s best-funded universities, 98.6 per cent are more than fifty years old, against 57.2 per cent of the Fortune 500 firms. What accounts for that endurance is structural. A university is a self-governing community of scholars, protected by autonomy, which attracts people with an unusual appetite for discovery. That structure allowed universities to reinvent themselves repeatedly – dropping subjects, adding laboratories – as the world changed, while keeping their character.

A structure of that kind is precisely what a ranking cannot observe, so the table measures the observable instead: citation counts, prize-holders, and the later salaries of graduates. Goodhart’s Law warns of what happens next: once a measure becomes a target, it stops being a good measure. Point a university at its citation count and it will produce citations, whether or not they add anything.

The figure below sets the world rank of South Africa’s leading universities next to their underlying score, edition by edition, with Harvard for scale.

The two panels show the same institutions measured two ways, and the results diverge sharply. On the right, the scores are almost flat: Stellenbosch has stayed within a single point of 74.8 for the better part of a decade, Cape Town and Wits sit just above it, and Harvard, by design, is fixed at 100. On the left, the same universities are ranked, and the lines move a great deal.

The flatness is built into the method. CWUR counts research over a rolling ten-year window, credits alumni careers that stretch back well over a decade, and sums prizes accumulated across whole lifetimes. Scores of this kind cannot lurch from one year to the next; they accumulate slowly. A university’s position, and the direction of any drift in it, says far more about the past twenty years of its life than about the past one or two.

The single large exception on the chart proves the point. In the 2026 edition Wits climbs from 292nd in the world to 200th, yet its score rises by only 1.8 points, and all of that comes from one pillar. Research and employability were flat and the education score fell; the gain is entirely in the faculty pillar, which counts staff holding the major prizes in their fields, and on which Wits moved from unranked to 87th in the world. Cape Town and Stellenbosch register nothing on this pillar at all.

What produced the change is impossible to tell from outside. It may be a genuine appointment, a prize-winner arriving at Wits. It may just as easily be administrative: a distinguished scholar already on the staff whose affiliation was, for the first time, reported to CWUR. In that case nothing about the university changed except the paperwork. Either way, a single entry lifted a university of tens of thousands 92 places up a global table.

Aristophanes chose his title with care. Clouds change shape continuously while carrying little substance, which was his image for a certain kind of intellectual display. The yearly movement of the rankings has the same quality: a great deal of change on the surface, very little beneath it.

The flat scores, meanwhile, conceal a change that is real but too slow to register in an annual table. It concerns what a university is for.

It is tempting to stop here, fault the method, and defend the university. But on the question of purpose, the ranking may be reporting something true. A full quarter of the CWUR score rests on employability – on graduates who reach senior corporate positions – and that is, in practice, what much of modern higher education has reorganised itself to supply. Not the frontisterion, the place for thought, but the prakterion, the place for training. Universities sell degrees as routes to a salary, advertise their employment rates, and report graduate earnings. The ranking rewards career outcomes, universities publish them, and the older question – what is worth knowing – recedes. The historian Chad Wellmon, in After the University (2026), tells this as a centuries-long story: how higher learning came to justify itself in the language of productivity and economic utility, leaving unmentioned the practices of disciplined study that once defined it.

Strepsiades, then, largely won. The university that supplies a credential and asks few questions about wisdom is close to the one we now run, and the ranking reflects that choice back to us with some accuracy.

The promise underwriting that bargain was straightforward: complete the degree, and step onto a stable professional path. Artificial intelligence weakens it from both sides. It performs the measurable academic tasks – the essay, the literature review, the standard analysis – at very low cost, and it is removing many of the entry-level jobs the credential was meant to secure. This may explain an otherwise odd scene: students booing speakers who praised AI at their own graduation ceremonies in 2026. Read as simple technophobia it is hard to follow; read as the suspicion that the path they were trained for is closing, and that their training fitted a smaller idea of the university than they had been promised, it makes sense.

It is not only new graduates who sense this. The public has begun to withdraw its confidence in the degree itself. In Britain, the share of people who think university is not worth the time and money has more than doubled, from 14 per cent in 2005 to 34 per cent in 2025, while the proportion expecting graduates to end up much better off financially has fallen from a half to barely a third. In the United States the slide is steeper: three in four adults called a college education ‘very important’ in 2010; by 2025 only about a third did. No comparable series exists for South Africa, and the mood here is probably less sour – but the direction of travel is unlikely to be different. A bargain struck on financial return cannot hold once the return itself is in doubt.

Cutler and Glaeser are honest about the limits of their own method. They can value medical research because health has a unit: years of life. When they turn to the humanities they pause, asking what it is worth to understand Shakespeare’s sonnets, or the lives of early humans, and concede that they cannot say. The value does not reduce to a number. What long looked like a weakness of the humanities is now closer to a strength: the things a spreadsheet cannot price are, increasingly, the things a machine cannot reproduce.

Two South African scholars saw this coming. The classicist Johan Thom, in his 1997 inaugural lecture at Stellenbosch, took the same comedy as his starting point and then reached back further, to the quarrel between Socrates and the Sophists. The Sophists were the first professionals of higher education: they charged fees and taught the practical art of winning arguments and public office, the original employability. Socrates took no fees and taught the pursuit of the good, which had no obvious use at all. The tension between training for success and educating for wisdom, Thom showed, is as old as the university itself.

Thom’s word for what is now at risk was schole, the Greek root of ‘scholarship’, meaning leisure, or freedom from necessity: the time and space a person needs in order to think. The classics, he argued, train a particular and increasingly rare skill – reconstructing a whole from a fragment, uit die klou die leeu, the lion from its claw, the animal from a few bones. In an age saturated with machine-generated text, the ability to judge a fragment, to tell the genuine article from a plausible imitation, may be the most valuable thing a university can teach.

The Stellenbosch philosopher Anton van Niekerk, in a chapter first published in 2009 and now free on johanfourie.com, makes a complementary point. A university, he writes, is its students and their ‘will to knowledge’; the buildings and the library are only the setting. His image is the voorloper, the person who walks ahead of an ox-wagon to test whether the road ahead will hold. A university’s task is to go ahead of society and report what it finds. This, to me, is the strongest reason for a university to take up AI and use it openly: mapping what these machines can and cannot do, and reporting back to a society that will soon depend on them.

None of this appears in a ranking, and none of it can. A league table does three things at once: it magnifies differences that are largely noise, it records with fair accuracy what universities have become, and it leaves out the part that may matter most – the capacity, protected for nine centuries, to think freely.

So the rankings are worth reading, provided one remembers what they exclude. You cannot judge an oak by counting its acorns, and you cannot take the measure of a place built for thought by recording how far its fleas can jump.

On the morning of 17 June 1796, Captain Benjamin Stout dragged himself, sputtering and exhausted, out of the sea. Hercules, his ship, had run aground just off the coast of the Eastern Cape. The ship and its captain were originally from America and had been en route, delivering rice from India to England when the wreck happened. On the shore, he met and was cared for by the local African inhabitants, who helped guide Stout and sixty of his men to Cape Town. On his way home through England, Stout published a record of his experiences, The Narrative of the Loss of the Ship Hercules.

In an age of exploration, shipwreck tales were popular and Stout’s book was well received. But where most other shipwreck authors told their tales to spread the word of God’s mercy or to claim fame and fortune, Stout did something rather strange. He dedicated his tale to American president John Adams. And not only that, he implored Adams to colonise the area that would become the Eastern Cape of South Africa, writing, “Such are the capabilities of this delightful country; and, as I apprehend, nothing is wanting to perfect the whole but the exertions of a wise and liberal government, I have recommended the establishment of a colony from America in these parts to your consideration.”

To understand how Stout could imagine such a proposal, we need to understand the world in which he operated…

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In the autumn of 1965, something was missing from the tomato fields of California. For two decades, close to half a million Mexican men had crossed the border each year to pick the crops that Americans ate. They were called braceros – hired hands, brought in under a government programme that had started during the war. Then, on the last day of 1964, Washington closed the programme down. The braceros went home.

Politicians had promised this would be good news for American workers. Take away the foreigners, the argument ran, and farmers would have no choice but to offer better wages to the locals who stayed behind. It was sold, in the language of the day, as an ‘active labour market policy’: remove the migrants, lift up the natives. The logic felt like common sense. Fewer workers chasing the same jobs should mean higher pay.

It did not work out that way.

Three economists – Michael Clemens, Ethan Lewis and Hannah Postel – went back to the archives and measured what actually happened after the braceros left. If kicking out foreign workers really did raise wages for the people who remained, we should see it most clearly here, in the states that had leaned hardest on Mexican labour. Their own model predicted that farm wages in those states ought to jump by around 12 per cent.

They jumped by almost nothing. Wages barely moved. Employment of domestic farm workers barely moved. The promised gain to American workers never came.

Where did the adjustment go instead? Into machines and into crops. In tomatoes, growers bought the Blackwelder mechanical harvester and let it do the stooping. In cotton and sugar beet, the same story – more machinery, fewer hands. Where a crop could not be mechanised, farmers often switched to one that could, or grew less of it. Wages stood still. The work itself was engineered away.

This is the first lesson, and it holds well beyond California: an economy that loses workers adapts. The gains its planners promised to the people left behind tend to flow instead to whatever does the job more cheaply – often a machine.

Back to the present, and a little closer to home.

South Africa has seen another wave of anger at foreigners – marches, threats, men turned away from clinic doors and spaza shops, the now-familiar demand that ‘illegal’ foreigners be rounded up and removed. The cause, we are told, is obvious. Foreigners are taking South African jobs. Foreigners are driving crime. Get rid of them and ordinary South Africans will breathe easier.

These are confident claims, but the evidence behind them is thinner than the confidence suggests. We have little solid proof that foreign workers are the reason South Africans cannot find jobs, or that removing them would open those jobs to anyone else. What economics can speak to with more assurance is the other side of the ledger: the measurable consequences of acting on the anger.

Begin with our own history, because South Africa has run a version of the bracero experiment before. For much of the twentieth century, apartheid policy shaped the supply and price of black labour – through influx control, job reservation, and, from the 1970s, rising wage pressure as black workers organised. As that labour grew scarcer and dearer in the formal economy, employers in mining, farming and manufacturing did what the Californian growers did: they mechanised. Machines replaced unskilled workers, and the economy settled onto a path that created steadily fewer jobs for the least skilled. The structural unemployment we live with today is partly its inheritance.

Migrants are, of course, not only producers. A migrant is a worker who competes for jobs – but also a customer who helps create them, someone who buys bread, pays rent, takes a taxi, sends children to a crèche. A 2026 study from Norway, by Sigurd Galaasen and colleagues, measured this second channel directly, tracking the electronic payments of an entire country. Workers more exposed to migrants’ spending saw their own incomes rise, strongly and persistently. By spending what they earn, migrants help pull native wages up.

This is what economists mean when they say migrants and locals are usually complements, not substitutes: each makes the other more productive. Some of that is the spending we have just seen. Much of it is what migrants bring to the work itself – education, a trade, business experience, and the ideas, capital and networks that come with them. A Congolese electrician or an Ethiopian shopkeeper builds something that was not there before, and hires people to run it. A second 2026 study, by Angel Aguiar and Stephen Devadoss, put a number on what cutting that link costs: deporting just 30 per cent of America’s undocumented workers, they estimate, would shrink United States output by more than 128 billion dollars, with the deepest losses in agriculture, food processing and construction.

It is true that perhaps this mutual benefit is weaker in a country like ours, with millions of unskilled workers already searching for jobs, than in a rich, labour-scarce economy like Norway; the effect may well be smaller here. And what is probably also true is that the gains from immigration and its costs fall on different South Africans. Those of us who never meet a migrant at the hiring queue – who employ them, at most, as domestic workers, or merely read essays like this one – enjoy the upside while seldom feeling the competition. The people who feel it are not us, and their anger is not simply prejudice.

Yet the case runs deeper than any wage calculation. Many of these migrants have lived here for decades – their children in South African schools, their spouses South African, often speaking the languages we speak. They have built lives and businesses inside an economy where they are active participants, and a deportation drive would tear at all of it.

It would tear, too, at a future we cannot yet see. Every threat and every removal tells the migrants who have not arrived – the ones who might have opened a business and taken on a few employees – that they are not welcome. The firms that fear keeps away are firms we never get to count.

And come they would, despite everything, because South Africa, for all its troubles, is still the richest economy for thousands of kilometres – the place where a life can be built. That is precisely why this is harder for us than for Canada or Australia, who draw their migrants from across oceans, with no long, unpoliced border onto a poorer world. We cannot wish our geography away.

So what should we do? If the problem is really that too many people are here illegally, the economist’s answer is almost embarrassingly plain: make them legal. South Africa has so many undocumented migrants largely because Home Affairs spent years as one of the state’s worst-run departments, where a lawful visa could take longer to obtain than a child takes to be born. The department is improving, but too slowly. Fix the queue and much of the ‘illegality’ simply dissolves.

Readers may hear an argument for open borders here. But that is not what I’m arguing for. A country is entitled to know who crosses into it, and our long, porous frontier is a real problem that deserves a real answer: a properly policed border, so that future migrants come through the front door and fewer are ever forced into the shadows. Legal status serves that same end. A person on the books can be taxed, counted and, where someone proves dangerous, traced and removed – provided we also build the capable police service we still lack.

The country does not need fewer people. It needs more of them here legally – starting businesses, paying taxes and employing the South Africans who badly need the work. Shipping thousands back – worse, leaving it to crowds at the clinic door and the spaza counter to decide who belongs – would leave the South Africans who stay poorer, and it would be inhumane besides.

Sending foreign workers home did not raise a single American farm wage in 1965, when replacing a picker meant buying an expensive new machine. Today, when a task can be handed to a machine – or a line of code – faster and more cheaply than ever, the gains from any deportation are even likelier to flow to capital than to the workers left behind. There is little reason to expect it would do more for us.

In a recent essay in the Financial Times, the president of Argentina set out to justify a new law by way of economic history. Javier Milei – an economist before he was a politician – traced the modern economy to a single document: the charter of the Dutch East India Company, signed on 20 March 1602. Machines made the Industrial Revolution possible, he argued, but Dutch corporate law made it happen, because only when the law placed a ceiling on risk did capital deploy with genuine force. The machine and the legal entity were, in his phrase, ‘the double helix of modern prosperity’.

And because artificial intelligence will do for the human brain what the steam engine did for human muscle, his government has now submitted legislation to give AI the same legal architecture: a new corporate category, the ‘non-human corporation’, operated by AI agents, protected by limited liability, taxed lightly and free to choose its own governance law. Human shareholders ‘may participate, but are not required’.

It is easy to list what could go wrong. Nobody knows how companies operated by autonomous AI agents will behave – not Milei, not the engineers building the agents, and certainly not the courts that will have to untangle the first disasters. But that is precisely what makes the experiment brave. Argentina is positioning itself as the place where the fruits of this new technology, and its dangers, will materialise first. Whatever AI-run companies turn out to be, the world will find out in Buenos Aires.

From the southern tip of Africa, the contrast stings. In April, the South African government had to withdraw its draft national AI policy after journalists discovered that several of its academic references did not exist – invented by the very technology the policy was meant to govern. One government is using economic history to design its future. The other could not check its own footnotes.

But is Milei’s history right? On the main point, yes. But the fullest record I know of what limited liability actually does to an economy sits not in Amsterdam but in Cape Town: fifteen volumes of company registrations in the Cape Joint Stock Archive, recording, name by name and street address by street address, who owned the companies of the late nineteenth-century Cape Colony. That archive shows what Milei gets right. It also shows what his essay leaves out…

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By the third century of the Common Era, Roman emperors had been stripping silver out of their coins for two hundred years. The denarius that once held three grams of silver held barely a smear by the time Diocletian came to the throne. And yet Romans kept paying with it. They kept accepting it. Long after the silver had largely vanished, ordinary people still trusted the stamp on the face of it. Why?

That has been a puzzle for more than a century. The archaeologist Kim Bowes, on a recent Conversations with Tyler episode, said she now finds it the single strangest feature of the late Roman economy. People knew the coins were debased. They still used them. Even when inflation reached the high triple digits, they kept paying in coin.

A new working paper by Johannes Boehm and Thomas Chaney – titled, plainly, Trade and the End of Antiquity – suggests an answer. The connective tissue of pre-modern commerce was not metal but belief.

Boehm and Chaney have done something remarkable. They have assembled a database of nearly half a million ancient coins, found in more than five thousand hoards buried across Europe, North Africa and the Middle East between AD 325 and AD 950. For each coin they record where it was minted, when it was minted, where it ended up, and roughly when its owner buried it. They then fit those half-million observations to a dynamic model of trade and money, and use the model to recover regional trade flows and consumption over more than six centuries.

They find that the Mediterranean’s relative decline began earlier than the standard story allows. Henri Pirenne, in a famous thesis, dated the rupture to the seventh century, when the Arab conquests sliced the old Roman world in two. Boehm and Chaney push the start date back at least a century, into the 500s, when the Western Roman state was already fraying. The Arab conquests of the seventh century then did something different. They redrew trade. North–south flows across the Mediterranean collapsed at the new frontier between Islam and Christianity. South–south flows, within the Caliphate, flourished. And by the late ninth century, the wealthiest stretch of the ancient Western world had become the Atlantic rim: al-Andalus, Frankish Gaul, the lands that would later become the engine of European commerce.

To put it into perspective: the centre of economic gravity in the Western world shifted northwest seven hundred years before Columbus.

But what does it mean to say a coin ‘flowed’? A bronze follis is inert. Someone trusted it enough to take it in payment, and someone else trusted that person enough to take it in turn. A coin, in this sense, is a token of trust. The economic historian Deirdre McCloskey reminds us that the English word credit comes from the Latin creditus, meaning ‘believed’. To extend credit is to extend belief. Aquinas listed faith as the sixth of seven virtues – above the four pagan virtues of prudence, temperance, justice and courage, and just below love and hope. Romans called it fides, and they treated it as the rule by which alliances were kept and oaths honoured. Carthage, McCloskey notes, was a commercial republic that distributed state revenues to its citizens. Rome ran on fides. Rome won.

When Bowes describes Romans accepting near-worthless silver coins, she is describing fides in action. The denarius worked because people believed the next person would take it. And the next person did. The Roman state was, as she puts it elsewhere in the interview, ‘a mask for an empire of friends and family’ – a network of personal trust, anchored at one end by the mint’s stamp.

This is what Boehm and Chaney’s data measure. Their estimates of mint output across regions and centuries – the figure above – map where that trust held and where it broke. The faith migrated. Mints in Carthage and Constantinople remained highly productive through the fifth century. Italian mints faded earlier than anyone had thought. The Sasanians sustained a steady silver output until the Arab armies overran them. After the conquests, a new mint network emerged across the Caliphate – Damascus, Cordoba, eventually Baghdad – while the Byzantines pulled production back behind their walls. By the late eighth century the Carolingian mints joined in, a sharp Frankish spike in the data.

Which brings us to a question Boehm and Chaney’s coin data cannot answer. What about a state that minted no coins at all?

Consider the kingdom of medieval Ethiopia.

In a new working paper, Mattia Bertazzini and Andrés Martignano use a regression discontinuity design at the fourteenth-century boundary of the Solomonic state to show that long exposure to centralised Ethiopian institutions raises literacy and urbanisation today, more than five hundred years on. The mechanism, they argue, is property rights – the gult system of feudal grants, under which the king parcelled out the right to collect tribute and the holder owed military service in return – combined with an early structural transformation out of subsistence farming.

What is striking about this state, for our purposes, is what it did not have. There was no professional civil service. There was no fixed royal capital; the Negus toured the realm with his court. And, the authors observe, ‘there was no minting of coins.’ Medieval Ethiopia administered a substantial territory across a difficult plateau for three centuries without striking a single piece of currency.

So what carried credit, in the literal sense, when there were no coins to carry it? The Coptic Church carried it. Royal chronicles in Ge’ez script carried it. The grants of gult land, recorded in monastic archives, carried it. The Negus’s annual circuit of judgement carried it. In Ethiopia, belief was registered in script and ritual. As the historian Isaac Samuel has documented, Ge’ez was one of a number of endogenous African scripts – Meroitic in ancient Kush, the Arabic-derived Ajami along Saharan trade routes – that emerged in dialogue with foreign writing systems but served local purposes: recording grants, asserting authority, keeping count.

Bertazzini and Martignano show that the institutions built on that belief are still producing measurable differences in the 1994 and 2007 censuses – eight percentage points more literate, nine percentage points more urban, on the inside of a line drawn in 1340.

The lesson? The End of Antiquity is, in the end, a story about belief migrating – to new mints in the Caliphate, to new courts and chronicles on the Ethiopian plateau, and eventually to the Atlantic rim that would, much later, come to dominate the world. Coins and chronicles did the same job. They asked one stranger to trust another. Where that trust held, economies functioned. Where it broke, empires followed.

McCloskey would say bourgeois prosperity is the eventual heir to all this. She is right. The long walk to modern wealth begins fifteen hundred years earlier, when a Roman shopkeeper looked at a silver-thin denarius and decided, against the evidence, to trust it.

Take a look at the main square of almost any old European town. Somewhere above it – on a church tower or a town hall – there is a clock. It has hung there for centuries, striking the hour for everyone within earshot: the merchant, the apprentice, the magistrate, the beggar. Except for the most exquisite ones, we barely notice it now. Yet that public, shared, freely available timepiece is one of the foundations of the modern economy.

Now travel back to eleventh-century China. Around 1088 the official Su Song built a wondrous astronomical clock tower at Kaifeng: twelve metres tall, water-driven, with an escapement-like mechanism that turned a celestial globe while small figures emerged to mark the hours. It was centuries ahead of anything in Europe. And it changed almost nothing. As the economic historian David Landes told the story, timekeeping in China was an imperial secret, bound up with astrology and the emperor’s heavenly mandate, shut away inside the palace. When invaders sacked Kaifeng in 1127 the clock was carried off, no one could rebuild it, and the knowledge died with its handful of court specialists.

The puzzle Landes left us is why the same machine could be a curiosity in one place and a turning point in another.

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In 1955, 970,000 black children were enrolled in South African schools. By 1967 the figure had reached 2.24 million. By 1973 it was 3.31 million – a 131 per cent jump in twelve years. And it happened even though school was not compulsory for a single one of those children, and even though almost everyone, parents included, knew the schools were failing them.

The schools were chronically underfunded and overcrowded. Most teachers had no tertiary training. Most pupils never made it from primary school to high school, let alone to matric (the final school-leaving examination). And still the numbers enrolling grew every year. The historian Oliver Aiken calls this the paradox of Bantu Education: a system designed to give black children less, swamped by black families demanding more.

Why would a parent enrol a child in a school they knew was failing? Part of the answer is simple: any education was worth more than none. A literate child could find work a non-literate one could not. Families were making an investment – in the ordinary economic sense of the word – and they understood what they were doing.

We remember the uprising of 16 June 1976 as a revolt against Afrikaans, and as the moment Black Consciousness arrived in the streets. Both are true. But they explain why the students marched, not why they marched that year. For that, it helps to look at the economy.

The timing of Soweto appears to have been shaped, to a surprising degree, by the South African business cycle: by a boom that allowed white voters to ignore black schooling, a downturn that prompted business to help pay for it, and a recession that withdrew the funding at a particularly bad moment.

Start with the boom. Through the 1960s the economy grew quickly – six to seven per cent a year for much of the decade. Employers’ demand for skilled work was met comfortably by white workers, whose higher salaries they could afford to pay. What they wanted from black workers was narrower: literate, low-skilled, low-wage labour. Bantu Education was built to supply close to that, and little more. As Hermann Giliomee notes, white South Africans of the time largely did not support large-scale spending on black schooling. There was little economic reason, from their point of view, to train skills that employers did not yet intend to buy.

So the system was kept small by design. Spending on Bantu Education was capped at R13 million; anything beyond that had to come from taxes levied directly on Africans themselves. Black parents, unlike white parents, paid for school fees and textbooks out of their own pockets. By 1971–2, the state spent roughly eighteen rand educating a white child for every one rand it spent on a black child. In the nominally independent Homelands – the rural territories to which the apartheid state assigned black South Africans – schooling was funded worse still.

Into that gap stepped the parents. In 1967, Tswelelang Higher Primary in Meadowlands set out to build extra classrooms by levying a R2 tax on local residents and running a bottle-cap collection drive. The Department refused to match a cent of what they raised. When the Urban Bantu Council asked the liberal-leaning Johannesburg City Council to help lift the monthly schooling levy from 18 to 38 cents, the government dragged its feet, conceded two cents, and left the council R55,000 in debt by 1970.

By 1971 Soweto had twenty secondary schools – roughly one for every 80,000 urban African families. To put that in perspective: a township of more than a million people had the secondary-school capacity of a small country town. When residents pressed again for the higher levy, the deputy minister, Piet Koornhof, told them any extra money would be spent not in Soweto but in the Homelands, where black secondary schooling was supposed to happen anyway.

Then the cycle turned. The downturn of 1969 achieved something a decade of liberal argument had not: it changed the minds of business leaders. For years, liberals – here, those who wanted apartheid’s economic restrictions loosened – had warned that Bantu Education would eventually leave the economy short of skilled black workers. In a slump, with white labour looking expensive and scarce, that warning began to look practical rather than theoretical.

Companies that had ignored black schooling now moved to fund it. In August 1971 Reckitt and Colman pledged R100,000 for bursaries; Barlow Rand set up a foundation with some R700,000; in February 1972 Harry Oppenheimer’s Anglo American gave R160,000 towards a junior secondary school in Soweto; The Star launched its TEACH fund. Because these gifts flowed through the City Council and private hands, they bypassed the R13 million ceiling.

Government shifted too. A pragmatic, verligte (reform-minded) wing of the National Party had decided, as Jonathan Hyslop puts it, to accept ‘the continued existence of the urban black working class’ – and to spend accordingly. Between 1969 and 1972 it dropped job-reservation rules, eased restrictions on black urban employment, and, most importantly, in 1972 shifted the financing of black education off African taxation and onto the state’s general revenue. The 38-cent levy was finally granted. Spending on black education rose from R55 million in 1970–1 to R97 million by 1973–4.

The effect was substantial. In four years the number of secondary schools in Soweto doubled. Secondary enrolment climbed from 12,656 pupils in 1972 to 37,656 in 1976 – an increase of more than 170 per cent.

This sets up the puzzle. Why did Soweto erupt precisely when demand for schooling was at its peak, and when, for the first time, both business and the state were moving to meet it?

Several factors coincided – and most of them were economic.

First, the timing was unfortunate. The global recession of 1973–5 reached South Africa, and the government reversed course and cut spending. As one historian puts it, the building of Bantu Education’s infrastructure ‘slowed down just at the moment that the greatest demands were being made on the system.’ The chart above shows the squeeze: growth fell from 6.7 per cent in 1974 to barely positive in 1975 and 1976, and into contraction by 1977.

Second, the same demand for skilled black labour that had opened company chequebooks now drew the best teachers away from the classroom. A factory or clerical job paid better than teaching, and teaching – long one of the few respectable careers open to educated Africans – became less attractive just as the schools needed staff most.

Third, the Department chose this moment to shorten black schooling from thirteen years to twelve, combining two cohorts of pupils into one in 1976. The result was a ‘bulge’ of younger children pressed into schools that had specialised in senior grades and were not equipped to receive them. Philip Bonner’s assessment is blunt: ‘Learning was virtually impossible and the pass rate plunged to lower levels than ever before.’

Into that overcrowded, underfunded and overstretched system, the government introduced a deeply unpopular measure. The 50–50 rule – that half of all lessons be taught in Afrikaans – had for years been applied loosely; by 1964, 95 per cent of secondary classes were taught in English. But hardliners wanted it enforced. In 1976 Vorster appointed the conservative Andries Treurnicht as deputy minister, and on 11 June Treurnicht ordered five striking Soweto schools to obey the rule. Soweto had planned, as in earlier years, to resist quietly. This time the Department forced the issue. The sense of ownership that residents had built over their schools, Aiken writes, ‘collapsed in an instant.’

None of this reduces Soweto to economics. The students who marched were refusing a language that stood for their subjection, and they carried a new confidence – Black Consciousness – that told them they need not accept it. Bantu Education was, at its core, a racist project designed to keep black South Africans politically and economically confined. The business cycle does not explain that, and it is not meant to.

What economics helps explain is the timing. It suggests why the system was so close to breaking in June 1976, rather than five years earlier or five years later: a school system swollen by demand, briefly funded, then squeezed again in a recession – all within half a decade. The Afrikaans decree was the immediate trigger. The economic conditions help explain why the system it met was already under such strain.

In a post on this blog in October last year, I shared a simple count: of the 42 students from Africa enrolled in the top 50 economics PhD programmes in the United States, two were South African. Brazil alone had 47 – more than the whole of Africa combined. In total, 137 came from Latin America, more than three times the African number. Not one South African was studying at an Ivy League department.

This lack of representation matters because the leading economics departments offer training that is hard to find elsewhere: advanced methods, exacting standards, and daily contact with the researchers who set the international research agenda. As I wrote then, ‘being trained by the best is much more likely to also make you the best’. And South Africans bring something their classmates cannot – a close knowledge of this country’s history, institutions and communities. We want more of them asking the questions that matter here, with the tools to answer them well. Many will return; those who stay abroad tend to keep working on South African questions, and to open doors for the students who follow.

That post did something I did not expect. A South African donor read it and asked a simple question: how can we help? I gave them an ambitious answer. Find students with the potential to earn a PhD at a top-50 department, bring them into honours and, for some, a master’s at Stellenbosch, and then train, mentor and fund them until they can apply abroad with confidence. They liked what they heard and backed our ambition.

We did not invent this approach. Latin America has shown, over many years, that it can work – in Brazil, Chile and Colombia. The striking thing is that the change came from individual universities, not from governments: a department decides to compete internationally, and slowly builds the record to do so. In 2024 alone, one institution – the São Paulo School of Economics – sent eleven students abroad to begin PhDs. We are forming partnerships with several of these universities to learn from what they have done, and from the mistakes they made along the way.

Today we launch the South African Economics Pipeline project. What the programme offers is concrete. From next year, each bursar receives R200,000 a year, enough to study full-time. They complete honours and, where the potential is clear, an 18-month master’s. Each is paired with two mentors – a Stellenbosch academic and an established international scholar in their field. Every November they attend a Summer School of PhD-level short courses taught by visiting scholars, and they take part in the new PSG–SU Economics PhD Workshop, which brings strong young researchers together at Stellenbosch. (More on this PhD Workshop in another announcement over the next few weeks.)

Our long-term aim is to build technical capacity within African universities and the South African government, and it already has support within Treasury. ‘The depth of South Africa’s technical policy capacity is a matter of national interest, and I welcome a programme designed to add to it’, says Dr Duncan Pieterse, Director-General of the National Treasury. ‘I am glad to be named as endorsing this aim.’

Applications are open from today, and closes 31 August. The first cohort begins in January 2027. We are looking for students that studied at South African universities with a strong record in economics, mathematics and statistics, the curiosity to work on hard questions, and the patience to spend several years building real expertise. If that sounds like you – or a friend – you can read the details and apply at econpipeline.org.

We are also looking for donors. Our main donor, The Millennium Trust, funds five bursaries, alongside everything that surrounds them: the Summer School, the mentor pairings, additional teaching, the support through the application process. That infrastructure is now built, and it can carry far more than five students. What limits us is bursaries. Adding one costs $15,000 per student per year. If you would like to put another South African on the path to a top PhD programme, you can find more info here or simply reach out to me.

The pipeline has been thin for a long time. It does not have to stay that way.

On the afternoon of 11 June 2010, in a packed Soccer City, Siphiwe Tshabalala collected the ball on the left, took one touch, and smashed it into the top corner. It was a brilliant goal, nominated for a Puskas, but it was a magic moment because of what it signaled. Sure, Bafana Bafana would go on to draw that match against Mexico, then crash out in the group stage. But nobody in that stadium was thinking about the standings. They were thinking that South Africa, and Africa, was on the world’s stage.

Like most South Africans, I remember that moment – and what turned out to be one of the best World Cups – very well. And in the epilogue to my book I used that month to make an argument about economic growth. Want to win the economic World Cup, I wrote, then stop hiring expensive coaches and top-down strategies. Give every child a soccer ball. Empower the next generation, and let them design their own future.

I still believe the spirit of that line. But sixteen years of football – and sixteen years of economics – have taught me it was incomplete. A football, it turns out, is not enough.

Let me show you why, using the World Cup itself as a teacher.

Start with a simple question. Each World Cup is awarded to a host nation. Where does that host sit on the global income ladder when the tournament arrives?

I ranked every country by GDP per capita – the Maddison Project’s long-run income data – in each World Cup year, and measured the host against the world’s frontier economy, the United States.

My hunch was that hosts have crept closer to the frontier over time. The data says something else. For sixty years, hosts hovered between a third and four-fifths of US income: Switzerland and Sweden near the top, Brazil and Mexico far below. The 1990s and 2000s had World Cups in countries close to the frontier, followed by South Africa, Brazil and Russia less than half of US GDP. Then, a reversal, with Qatar in 2022 at 255 per cent of US income, the richest host ever, by a distance.

In one decade FIFA swung from the poorest host to the richest. South Africa’s World Cup was sold as development – a coming-out party for a young democracy and a whole continent. Qatar’s was a petro-spectacle, air-conditioned stadiums paid for with gas. So much for the idea that hosts edge ever closer to the frontier. If anything, the choice of who hosts has come seems unmoored from how rich a country actually is.

Perhaps, instead, there is a correlation between income and victory? Let’s look at the final itself. In every World Cup final since 1930, I compared the two finalists’ GDP per capita.

In 13 of 22 finals, the poorer nation lifted the trophy. Brazil, never close to the income frontier, won five times, usually against richer European opponents. On any given afternoon, ninety minutes is a great leveller.

And yet zoom out and the picture inverts completely. Only eight nations have ever won the World Cup. Plot the concentration of titles across the world’s countries, the way economists plot the concentration of income, and the contrast is brutal.

Income across nations has a Gini coefficient – the standard measure of inequality, where zero is perfect equality and one is one country owning everything – of about 0.52. The distribution of World Cup glory has a Gini of 0.97. The people’s game, supposedly the most democratic sport on earth, hoards its ultimate prize more tightly than the world economy hoards money. Football is radically equal for ninety minutes and radically unequal across a century.

If money does not buy trophies, what does? As I wrote before, football is unusually generous with evidence, because it records everything.

For the 2022 World Cup I counted, for each squad, how many players earned their living at clubs in Europe’s ‘Big Five’ leagues – England, Spain, Germany, Italy and France – and compared that to how the team performed.

The relationship is clear: roughly every three or four players plugged into those elite leagues is worth an extra goal of margin over the tournament. Teams do well when their best talent reaches the steepest learning environments and tests itself against the best, week in and week out.

It is the same lesson I drew from the Africa Cup of Nations, and it is an old lesson in economics too: openness beats protection, and skills are built where competition is fiercest. Note the cautionary dot, though. Germany arrived in 2022 with more Big-Five players than anyone – and went home in the group stage. Access to the best matters; on its own, it is not enough. You still need the system around it to function.

Now combine the lessons. Football has been getting more equal where it matters for spectacle – the gap between the strong and the weak on the pitch has narrowed. The economy has been doing the opposite.

Start with China and India. As the two of them industrialised, well over a third of humanity saw their incomes race towards rich-world levels – the largest catch-up in history. Count every person equally, weighting each country by its population, and the gap between the world’s economies has been shrinking since around 1990. By that measure, the world is converging.

Measure the very same thing with a simple standard deviation, though – treating tiny Togo and giant India as equal points – and you get the opposite: divergence, dominated by the many small, poor economies that really have fallen further behind. And here football picks the second measure. A World Cup does not count people; on the pitch nobody weights by population, and tiny Togo has exactly as many shots at the trophy as giant India. By the tournament’s own arithmetic – one country, one team – the economic gap between the contenders really has widened. That divergence line is the world as football itself counts it.

And yet, on the pitch, the gap has done the opposite. Since 1950 the average winning margin in World Cup matches has fallen by more than a third, from about 2.3 goals to 1.4; minnows now routinely hold giants.

Why can football close gaps that economies cannot? Because footballers can move easily and the rules are the same everywhere. A century ago, barely one World Cup player in twenty turned out for a club abroad; by 2026 it is seven in ten.

A talented teenager from Addis to Zagreb can be scouted, signed and schooled in Madrid, and bring that learning home. Knowledge, coaching and competition flow across borders far more freely in football than the institutions, capital and know-how that actually make countries rich. The pitch is flat. The world is not.

Which brings us back to 2010, and to my own analogy.

When I wrote ‘give every child a soccer ball’, I meant education. Empower people with skills and they will build the economy themselves. It was the optimism of the moment, and it was half right. But the defining finding of development economics over the past fifteen years is uncomfortable: schooling is not the same as learning.

Plot every country’s expected years of schooling against its learning-adjusted years – the World Bank’s attempt to count how many of those years actually produce reading and reasoning – and almost everyone sits below the line where school equals learning. South Africa sits a long way below it. Our children spend about 10.2 years in school but acquire the equivalent of 5.6 years of genuine learning. Four and a half years simply evaporate. We handed out the soccer balls, but they never had fields to play on, or coaches showing up for training sessions.

And the consequences show up exactly where you would expect.

Here is South Africa’s income per person since Tshabalala scored. The gold line is what happened: essentially nothing. In 2022 the average South African was no richer than in 2010. The dashed line is where the National Development Plan – our own grand strategy, drafted in that hopeful era – hoped we would be. The gap between them is a lost generation, roughly 60 per cent of income that never materialised. Tshabalala’s goal was a flash of individual genius with no system behind it. So, it turned out, was the promise of 2010.

The lesson is that a child with a ball and nothing else does not become a World Cup player. He needs a pitch that is not a rubbish-strewn field, a coach who has himself been coached, a league that lets him play competitive matches, a referee who applies the rules fairly, and the freedom to move to wherever the game is hardest. The ball is the cheap part. The ecosystem is the hard part – and it is the part that wins tournaments and grows economies.

That is what I would change about my old analogy. I would aim even higher for ordinary people, and be honest about what that takes. Growth is not handed down by a clever coach with a five-year plan, and it does not bubble up automatically from a warehouse of soccer balls either. It comes from building the whole apparatus around the talent: real learning rather than mere schooling, institutions that enforce the rules, markets competitive enough to sharpen skill, and openness that lets people test themselves against the best.

When the tournament kicks off again in 2026 – across the United States, Canada and Mexico, three hosts spanning almost the full income ladder – watch which underdogs hold the giants. The beautiful game will, once more, flatten the field for ninety minutes at a time. The harder, slower, less glamorous work is building an economy that can do the same for a lifetime.

South Africa is back, too, playing the opener against Mexico, in a repeat of 2010. But look at where Bafana start.

Of all 48 squads heading to North America, theirs is among the least exported – barely one player in eight at a Big-Five club, while Spain and England field almost nobody who is not. If the lesson of this piece holds, that is exactly the gap to watch: on the pitch in 2026, and in the economy long after.

South Africa spends just under a trillion rand a year on public procurement – about 15% of GDP, on the best recent system-wide estimate of R931.5 billion in 2021/22. On 16 April 2026, Finance Minister Enoch Godongwana published 100 pages of draft General Regulations under the Public Procurement Act 28 of 2024. The rules scale by contract value: set-asides on contracts up to R20 million, ownership-linked pre-qualification from R20 million to R100 million, and subcontracting conditions above R100 million. On top of this sit minimum allocation targets across 21 designated-group permutations in Annexure 2, and a centralised supplier database, with compliance ultimately the Auditor-General’s to verify. With the Act and the companion Tribunal Regulations, this is the most far-reaching procurement-law reform in a generation.

What does the recent international evidence suggest the consequences will be?

What the regulations actually do

The new rules tighten as the contract gets larger. For contracts below R20 million, the contract is set aside for firms 100% owned by members of one of the designated categories – black people, black women, women, people with disabilities, military veterans, small enterprises, co-operatives, and so on. For contracts between R20 million and R100 million, bidders must pre-qualify by demonstrating either that at least 40% of their past procurement went to 51%-black-owned and -managed enterprises, or that they will subcontract 30% of the contract to 100%-owned enterprises in one of the identified categories. For contracts above R100 million, an institution may, after a feasibility assessment, make subcontracting a condition of the bid; where it does, every bidder must subcontract at least 25% of the contract value to 100%-owned enterprises in the identified category.

Annexure 2 sets a further layer of obligations: minimum set-aside targets across 21 designated-group permutations, expressed as a share of the institution’s annual procurement budget. The headline targets are 30% to black-owned firms, 15% to black-women-owned, 18% to women-owned, 4% to firms owned by people with disabilities, 2% to firms owned by military veterans, 30% to small enterprises, and on through twenty-one rows. An institution does not apply all twenty-one: it selects up to five categories and must meet the Annexure 2 targets for those it picks. The targets overlap – a black woman can count towards several rows – and summed they far exceed any budget, so the real burden is not arithmetical impossibility but administrative complexity, audit risk, and the pull towards chasing measurable categories over delivery.

This is a structural change, not just an adjustment. Under the previous regime, the Preferential Procurement Policy Framework Act, price counted for 80 of every 100 points (or 90 on larger contracts), with the balance awarded for B-BBEE status, so every compliant firm could still bid and could still win on price. The new rules replace points-based preference with hard exclusion: on a set-aside contract, only bidders meeting the ownership criteria are eligible to bid at all.

None of this is to dismiss the draft wholesale. Parts of it are genuine improvements that should survive any redraft: it requires institutions to publish their procurement plans and awarded contracts, it consolidates a famously fragmented system into a single, clearer framework, and its transformation objective is constitutionally legitimate. The question is not whether to pursue transformation through procurement, but whether outright ownership-based exclusion is the instrument that will achieve it. The international evidence is the test.

A debate already in motion

South African procurement-law scholarship has argued for several years that the system is over-regulating its way into worse outcomes. Geo Quinot – my colleague at Stellenbosch and director of the African Procurement Law Unit – has made this case across a sequence of papers. In a 2020 piece for the African Public Procurement Law Journal, he described ‘an extreme level of fragmentation’, with dozens of subordinate instruments layered on top of the primary statutes. By 2023, in Ruch Prawniczy, he was arguing that the granular, ‘band-aid’ approach ‘threatens to undermine the very constitutional foundations of the procurement system’. The Auditor-General’s own data are consistent: only 36% of national and provincial entities were fully compliant with procurement legislation in 2019/20.

In 2025, with Jonathan Klaaren, Ryan Brunette and Ron Watermeyer, Quinot extended the argument in APPLJ. The current paradigm, they wrote, ‘is more appropriate for off-the-shelf products and well-defined services than for public infrastructure and other complex purchases’. They proposed graduating rule-strictness to institutional capacity – relaxed rules for entities able to be trusted with discretion, tighter rules for those that cannot.

In his 2024 UNCITRAL chapter, Quinot put the diagnosis plainly: ‘Where capacity across the procurement system is low and where there are serious integrity concerns, it is common to limit discretion in procurement decisions … by way of strict rules.’ Strict rules and bureaucratic capacity, on this reading, are substitutes: a country leans on the one when the other is weak.

The conceptual argument is already well developed in the South African legal literature. What this post adds is the empirical scaffolding from the recent international economics literature, which the local debate has not yet engaged with. Two papers, both in the American Economic Review, are particularly relevant.

Lesson one

The first paper, by Bosio, Djankov, Glaeser & Shleifer (AER 2022), assembles a dataset of procurement laws, practice, and outcomes across 187 countries. The authors distinguish ‘laws’ (what is on the books) from ‘practice’ (what bureaucrats actually do), and ask which predicts outcomes – integrity of the process and quality of public works.

Three findings stand out. Practice predicts outcomes. Laws predict practice. But laws, on their own, do not predict outcomes. Put differently: once you know what bureaucrats actually do, the rule book adds no further information about whether the system delivers. Stricter regulation on paper has no measurable association with better procurement performance.

The puzzle resolves once one looks at state capacity. Stricter laws improve outcomes in low-capacity countries, where unconstrained discretion would more often be misused. They worsen outcomes in high-capacity countries, because the rules end up blocking welfare-improving discretion – including the discretion to exclude a low-quality bidder who happens to meet every formal criterion. In Bosio et al.’s framing, regulation and public sector capacity are substitutes – the same conceptual point Quinot makes in his 2024 chapter, but supported by cross-country regression evidence rather than legal reasoning alone.

Two further patterns are worth noting. In low-capacity countries, the law is stricter than practice: rules aspire, bureaucrats fall short. In high-capacity countries, practice is stricter than law: capable officials voluntarily exceed the rule book. The well-functioning systems are not the most heavily regulated ones. They are the ones with capable people who do not need the regulation to do the right thing.

So where does South Africa sit on this picture? Recomputing the Laws index from Bosio’s openICPSR replication file gives a baseline of 2.1 out of 4 – already slightly above the global linear fit at the country’s level of income, meaning the country is already a bit more heavily regulated than the typical country at its income level. Estimating where the new regulations would put it is necessarily approximate: Bosio’s original survey instrument was designed around a hypothetical US$2.5 million road-resurfacing case rather than South Africa’s set-aside architecture. We walked through all 24 Law-side questions, mapped each to a specific gazetted regulation, and applied three pre-registered scenarios: conservative (flip only on explicit textual mandate), central (flip on a reasonable legal reading), and aggressive (flip on intent). The full decision matrix is in the replication folder. The central estimate is 3.07 out of 4, with a conservative-to-aggressive range of 2.39 to 3.83. Under any of these scenarios, South Africa moves from “slightly above” the global trend line to the upper third of the distribution, alongside countries with considerably weaker public sector capacity. Nothing in the new regulations builds the underlying capacity that, on Bosio’s evidence, is the only factor shown to matter for outcomes.

Lesson two

The second paper, by Carril, Gonzalez-Lira & Walker (AER 2026), asks a different question: should the same procurement rules apply to a stationery order as to a wastewater treatment plant?

US Defense procurement runs on a regulatory threshold that helps answer it. Below US$25,000, contracts can be negotiated without public notice. Above US$25,000, contracts must be publicly advertised. Carril and co-authors compare otherwise-similar contracts that fall just above and just below this threshold, isolating the causal effect of forced public advertising. They find that above the threshold, the extra publicity brings in about 60% more bids and prices fall by about 6%. But cost overruns rise by 7%, and delays rise by 8%.

Almost all of the deterioration is concentrated in complex contracts – services, customised work, anything the buyer cannot fully specify in advance. The within-firm decomposition isolates the mechanism: when a given contractor wins under more publicity, it does not deliver any worse than the same contractor under less. The damage comes from which firms end up winning. Forced advertising pulls in marginal entrants who underbid the established suppliers, win, and then fail to deliver. Economists call this adverse selection at the entry stage: forcing competition changes the type of firm that competes, and on complex contracts it is the lower-quality entrants who win.

A complexity-tailored rule – heavy publicity for commodity contracts, lighter publicity for complex ones – would save the DOD about US$104 million a year, about 2% of relevant spend.

This is the same argument Klaaren, Brunette, Quinot and Watermeyer make in their 2025 APPLJ paper: rules should differentiate by procurement type. What Carril adds is the causal magnitude. Uniform rules across heterogeneous contracts have a measurable cost, concentrated where contracts are most complex – exactly where governments most need procurement to work.

South Africa’s new regulations apply uniformly. The R20 million threshold is the same for a stationery contract as for a wastewater treatment plant. The R100 million subcontracting condition, where an institution imposes it, can apply to a building lease and to a rail-signalling system alike. Most of the country’s high-profile procurement failures of the past decade – Eskom’s builds, the Transnet rail expansion, failing municipal water plants – sit in the complex category Carril’s paper identifies as most vulnerable to blanket rules.

Three predictions

What do these two papers suggest about how the new regulations are likely to perform?

First, costs will rise on average, though the evidence cuts both ways and design is decisive. Set-asides are not simply anti-competitive: the most directly relevant study, Cappelletti & Giuffrida’s (2024) decade of US federal procurement, finds that the entry of targeted firms more than offsets the exclusion of others, so the number of bids actually rises. But the same study finds that execution suffers. Small-business set-asides raise cost overruns by 16.2%; the more restrictive disadvantaged-business set-asides – those reserved for narrowly defined ownership groups – raise overruns by 30.9%, with delays lengthening by roughly 5% and 9% respectively. The mechanisms are adverse selection and weaker performance incentives. On preferences specifically, the picture is genuinely mixed: they can lower costs (Krasnokutskaya & Seim 2011; and, as reported in Cappelletti & Giuffrida 2024, Nakabayashi’s study of Japanese set-asides) when they draw genuinely new competitive entrants into a thin market, but they raise costs (Marion 2007 finds a 5% bid preference raised California highway costs by 3.8%) when the favoured pool is shallower than the market it displaces. South Africa’s new design narrows eligibility towards firms 100%-owned by members of whichever designated category the institution selects – a thinner pool than the 51%-black-owned market most firms have grown into under B-BBEE – and the rule sits on top of a budget split many ways. On the design choices made, and with many reserved categories of the restrictive 100%-ownership type, the new regulations fall on the cost-raising side of the evidence.

Second, execution on complex contracts is likely to worsen. This is Carril’s adverse-selection result applied to South African infrastructure procurement. When eligibility for a high-stakes tender is determined by ownership rather than ability to deliver, the firms that win have been selected on the wrong basis, and the cost of that selection error shows up at the execution stage rather than at award.

Third, the pre-qualification tier invites collusion, and the compliance burden will slow decisions. The R20 million to R100 million pre-qualification stage turns procurement into a two-stage process, and any pre-selection stage is a gift to cartels: a partial cartel can coordinate its first-stage bids to crowd competitive rivals out of the second stage and push prices up (Seibel & Skoda 2026). When Slovakia abolished pre-selection, procurement savings rose. South Africa’s construction sector, where collusion is documented in Competition Commission investigations and where the ‘construction mafia’ is a live enough concern that the draft addresses it directly, is fertile ground for exactly this. At the same time, the compliance burden climbs. This is Quinot’s point, made sharper by the new annexure: the categories an institution selects must each be tracked, met and audited, each carrying personal liability for accounting officers. South African courts have accepted that holding officials personally liable for procurement decisions has a ‘chilling effect’ on their willingness to take decisions. The new regulations multiply the compliance tests a single decision must pass to stand up to audit, so decisions are likely to slow, particularly where the compliance position is unclear.

Conclusion

Bosio et al.’s reading of their own results is that the regulation of procurement helps, but mostly in lower-capacity countries where unconstrained discretion is more often misused. South Africa has its problems, but it is not at the bottom of the global capacity distribution. It is in the middle, having lost ground over the past decade. The policy direction the evidence supports is not more law, but more capacity. A procurement system designed to substitute for a weak state tends, over time, to keep the state weak.

There is a parallel risk for the firms the policy means to help. Set-asides can keep firms alive without making them competitive: winners survive on reserved demand rather than rising productivity, showing no measurable productivity premium (Cappelletti, Giuffrida & Rovigatti 2024). A regime meant to build black-owned firms can instead entrench their dependence on the next set-aside. The right test of preferential procurement is whether it builds competitive firms, not whether it reserves contracts.

The conceptual case has been made in the South African legal literature for several years. What the international economics evidence adds is the magnitude: cross-country regressions on 187 countries showing the substitutes relationship, and a causal estimate from US Defense procurement that quantifies what uniform rules cost on heterogeneous contracts. The public-comment period on the draft regulations is open.

On the available evidence, the draft regulations as written are likely to worsen South African procurement outcomes, and they should be substantially redrafted before being gazetted in final form.

South Africa’s supermarkets are well stocked. By the crude measure of calories, the country produces and imports more than enough to feed every child in it. And yet more than one in five young South African children - by some counts closer to one in four - is stunted: too short for their age, the mark of poor nutrition or repeated illness in the first years of life.

This is not a story about famine. South Africa grows and imports plenty. Yet stunting here is severe and stubborn. That is the puzzle. If the food is there, why are so many children still too short for their age, and what can actually be done about it?

Read more

We came round a bend on a dirt road in the centre of the Kruger National Park two weeks ago. A pack of wild dogs had just pulled down an impala, a few meters from the car, and two of them were tearing the body apart while the animal, by all appearances, was not yet dead. It was an extraordinary sighting. It was also genuinely gruesome.

Wild dogs hunt this way out of necessity. They lack the heavy jaws and long, dagger-like canines of a lion or a leopard, which can kill large prey with a single suffocating bite to the throat. A wild dog cannot. So the pack pulls its prey down and simply begins to eat, shearing into the soft parts – the belly, the rump, the head – often before the animal has died. Efficient. Awful to watch.

It was not, on paper, an easy eight days. Many roads were closed after the floods a few months earlier. The grass was long, which makes spotting animals harder, and two small children make for few leisurely drives. On the first day, a boomslang, one of the most venomous snakes in the country, dropped out of a tree onto the hide we were about to enter. And yet we saw lion, leopard, elephant, buffalo, and those wild dogs. Most people alive today will never see any of it.

Kruger turned 100 yesterday. The instinct on a centenary is to do one of two things: to celebrate, or to mourn the poaching and the crumbling infrastructure. I want to do something else, because I think the most interesting thing about Kruger is an economic point that most people get backwards. We usually assume that wildlife and economic growth are enemies – that more people and more money must mean fewer animals. For a park like Kruger, the relationship runs the other way. Kruger is not only a contributor to South Africa’s economy. It is a beneficiary of it. Animals, it turns out, do well where people do well.

To put it into perspective, consider a strange but revealing exercise from the team at Our World in Data: weigh every mammal on the planet and ask how the total divides up. Wild mammals account for just 5 per cent of it. Humans are 36 per cent, and our livestock and pets – mostly cattle – make up the remaining 59 per cent. Our own bodies outweigh every wild mammal on Earth by more than seven to one. All the world’s dogs, taken together, weigh roughly as much as all the wild land mammals combined. Birds tell the same story: poultry outweigh wild birds by more than two to one. The biomass of wild mammals has fallen by something like 85 per cent over the past 100,000 years, most steeply since we learned to farm.

This collapse has a name. The late economic historian Eric Jones, in a book published shortly before his death, called it the ‘drawdown’ – the long extermination of wild animals that ran alongside, and helped to power, the rise of the modern economy. His claim is deliberately uncomfortable: that ‘without animal bloodshed and captivity, modern economies, societies, settlement and agriculture might not have emerged as they did’. The wealth that now lets us mourn the wild was built, in part, by destroying it.

In short, wild animals at scale have become a rare commodity. The places where they still exist in large numbers are not accidents of wilderness left over from an older world. They are deliberate, managed, expensive choices. Kruger, at nearly 2 million hectares – a long, thin park running down most of South Africa’s border with Mozambique – is one of the largest such choices on the planet. That is the first thing to keep in mind.

How that exception came to exist is a more tangled story than the gift-shop version suggests.

When the park was proclaimed in 1926, the New York Times ran the charming headline, ‘Biggest Zoo is a Vast Jungle’. Kruger was assembled from two older game reserves, the Sabi (proclaimed in 1898) and the Singwitsi (1902), and those reserves had been created, somewhat awkwardly, to protect game stocks for commercial trophy hunting. Conservation, in other words, began as an investment strategy. Farmers and the companies that had given up their land expected to recoup their losses through hunting once the herds recovered. The land itself was handed over precisely because it was thought agriculturally useless.

This does not mean the land was empty. As the historian Jacob Dlamini has shown, the lowveld had long been home to an African economy built on hunting and the ivory trade. Within a year of his appointment as head ranger, James Stevenson-Hamilton had driven roughly 2,000 people off the land around the Sabi, cutting them from the means that sustained them. They gave him the name ‘Skukuza’ – the destroyer.1 In a cruel twist, that name now belongs to the park’s largest rest camp and its administrative heart.

For a while the project looked likely to fail. Neighbouring farmers, whose livestock made easy prey once hunting was banned inside the reserve, dismissed it as a ‘government lion-breeding concern’ and lobbied to have the animals exterminated. And then, in the space of a few decades, the mood flipped. The ‘Great White Hunter’, in William Beinart’s phrase, became the ‘Great White Safari Guide’. The newspapers that had wanted the lions shot now competed to be the scheme’s loudest champion.

What changed was partly sentiment and partly money. The campaigners had a powerful example to point to: Yellowstone, the world’s first national park, which had demonstrated something governments needed to hear. Viewing wildlife, it turned out, was a legitimate and financially viable use of land. You could make more from tourists with cameras than from farmers with rifles. The choice of name sealed the deal. Calling it the Kruger Park – after the old Boer republic’s president, Paul Kruger – was an act of reconciliation between English- and Afrikaans-speaking whites, part of the same nation-building decade that gave South Africa a new flag. It was also, as the historian Jane Carruthers notes, a small fabrication: Kruger was not a particularly keen conservationist, and proclaimed the Sabi reserve only under public pressure. But the myth did its work.

With the park proclaimed, all that remained was to fill it. In 1928 the South African Publicity Association launched an advertising crusade aimed squarely at the United States. ‘A new bid for American tourists and their dollars is being made,’ reported the New York Times, ‘and South Africa is the bidder.’ For every 10,000 American visitors, the planners reckoned, something like a million pounds would follow. The bet paid off, and what drove the growth that followed was, tellingly, a set of luxuries: the private motor car, the camera, the cinema reel. Tourists were even reassured that they need not panic if a lion stared at their vehicle, since the animal had ‘probably never seen a car before’.

Look at the visitor numbers and you are really looking at South Africa’s economic history in miniature. In 1927 the park received 27 visitors. The next year, 650. By 1938, more than 38,000. The park welcomed its millionth visitor in the 2002/03 season and climbed to a peak of about 1.9 million in 2017/18, roughly doubling every decade for most of a century. The pandemic knocked it down to 1.3 million in 2021/22, and it has since recovered to about 1.87 million. A 2018 projection had visitor numbers doubling again to 3.65 million by 2029. That now looks fanciful, and the reason is simple: visitor growth stalled when the economy stalled.

This is the heart of it. A safari is a luxury good, the kind of thing people buy more of as they grow richer and forgo when times are hard. That holds for foreign tourists choosing between South Africa and Kenya, and it holds for South African families deciding whether they can afford the week away at all. The prices have always tracked a market – a rest-camp hut once went for a few rand a night – and the gates open widest when wallets are full.

But the dependence runs deeper than ticket sales. Protecting wild animals is enormously expensive. It takes rangers, fences, veterinarians, anti-poaching patrols, and roads and bridges – including the ones the recent floods washed away. That money comes from tourism revenue and from a state with the fiscal capacity to fund what tourism does not. Kruger, the profitable giant, helps cross-subsidise the smaller parks in the national network. When the economy is strong, visitors come, budgets hold, and the pressure to poach a rhino for quick cash eases. When the economy is weak, every one of those supports buckles at once. Put differently: the wild dogs we watched on that road depend, in the final analysis, on whether the South African economy works.

Which is why the cracks matter, and why I do not want to paper over them. Some of the units we stayed in had clearly seen better years, while the rondavels at Skukuza are being rebuilt in luxury. It is, in a small way, the whole South African story – the widening gap between what still works and what is falling apart. And in the same week we were there, something happened that had never happened in the park’s hundred years: two South African visitors were stabbed to death at Crooks Corner, in the far north where South Africa, Mozambique and Zimbabwe meet. Their car is still missing, and the likeliest explanation is a crossing from across the border. Kruger was supposed to be the safest place in the country, somewhere you could sleep without fear. This does not mean the park is failing. It means the park is not sealed off from the country, or the region, around it. Insecurity is what arrives when economies fail on both sides of a border.

Jones had a name for the second act, too. Where economies grow rich enough, he argued, the killing eases and some species stage what he called the ‘Great Rebound’ – a recovery bought rather than stumbled upon. That is what Kruger is: not a fragment of old wilderness that survived us, but a rebound we chose to pay for. Jones left the harder question open. The West’s pillaging has subsided; will the rest of the world repeat it as it develops, or learn to afford the rebound instead? Kruger is South Africa’s attempt at the second answer – and it holds only for as long as the economy does.

The lesson? If we want lions and leopards and wild dogs to still be here at the bicentenary, in 2126, it is not enough to guard the fence. We have to grow the economy that pays for the fence, staffs the gate, fixes the bridge, and fills the camps with people who can afford to come. Conservation and prosperity are not rivals fighting over the same hectares. They rise and fall together. A hundred years ago a newspaper called this place a vast jungle and marvelled that anyone would protect it. The task of the next hundred years is to keep it that way – which, in the end, means keeping South Africa a place where people, and therefore animals, can do well.

She is a founder in KuGompo City, South Africa (formerly East London). She has a small team, a product that works, and a handful of paying customers who keep coming back. What she does not have is money to grow. The bank offers her a loan, secured against assets she does not have. A government programme offers a modest grant and a place on a training workshop. Neither fits.

She knows exactly what she wants: capital that shares the risk if the bet goes wrong, and brings help if it goes right. Economists call it equity. She just needs a partner.

A remarkable new study shows she is in the majority. A team of economists surveyed 4,444 startup founders across 51 African countries, then ran an experiment that asked them to rate realistic-looking investment offers, one attribute at a time. Founders across the continent prefer equity to debt, and they prefer it by a wide margin. How wide? The experiment lets us put a price on it: swapping a debt contract for an equity one is worth about as much to a founder as cutting the loan’s interest rate by eleven percentage points.

That finding looks like a story about finance. But it is really a story about people. Equity is how you finance a bet on talent and ideas; debt is how you finance assets. A startup economy that runs on equity therefore only works if a country keeps producing people worth betting on – and the managers and engineers they will need to grow. South Africa does not produce nearly enough of them, and it produces them unequally. Here’s why it matters.

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