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Words matter.
In fact, if we believe the economic historian Deirdre McCloskey, words have the power to transform a society from an economic backwater into an industrial powerhouse.
Take England. Something happened around 1700 in the way people talked about trades, entrepreneurs, merchants, and industries; in short, about business. Before, making a profit was seen as an exploitative, zero-sum game, where for me to win, you needed to lose. That was why merchants were often considered pariahs, useful but socially shunned. Think of Shylock, the Jewish moneylender and principal villain in Shakespeare’s late sixteenth-century play, The Merchant of Venice. To emphasise the social outcast status of Shylock, consider that when Shakespeare wrote the play in the final years of the sixteenth century, there were no Jews in England, following the Edict of Expulsion in 1290. Shakespeare had to use a forbidden figure to play the role of a merchant. That was how banking and business were perceived back then.
Fast forward two centuries to the early 1800s. In Jane Austen’s Pride and Prejudice, wealth is the central measure of social standing. Consider Mr Darcy’s friend, the handsome Charles Bingley, a wealthy young man whose family fortune stems not from grand estates, but from successful trade in the North of England. Bingley signifies a change in societal values: while landed wealth remains a marker of high class (and something he aspires to), the stigma once attached to business has faded. Commerce and industry have gained respectability, particularly among the burgeoning middle class.
If literature is not your thing, then consider this Google ngram. It captures the frequency of certain terms used in English-language books. Consider how infrequent words like ‘honest trader’, ‘virtuous industry’ or ‘blessings of industry’ appear before the early eighteenth century and how, at the dawn of the Industrial Revolution, they suddenly appear. How we talk influences what we do, and vice versa.
If you still have doubts about the power of words, then perhaps research about the power of one technology of communication – the radio – might persuade you. In the 1920s, the Weimar government introduced radio news broadcasts, creating a more informed and less radical populace. Studies comparing areas within and outside reception zones reveal that access to these broadcasts weakened Nazi Party support. However, once Hitler became chancellor, radio turned into a tool for Nazi propaganda, reversing the effect. Germans within reception areas now showed stronger Nazi support. This influence was not unique to Germany. Economist Tianyi Wang found that in the 1930s, American listeners of Father Charles Coughlin’s pro-fascist radio program were more likely to form pro-Nazi groups and sold fewer war bonds. Decades later, in Rwanda, radio propaganda incited violence and genocide against the Tutsi minority.
Words also have the power to activate history. One study published earlier this year shows how populist campaigning today can revive historical grievances created more than four centuries ago. Using local variations in the atrocities committed by Turkish troops during the sieges of Vienna in 1529 and 1683, the authors show that anti-Turkish campaigns by Austria’s far-right Freedom Party (FPÖ) in the 2000s significantly boosted their vote shares in municipalities previously attacked by Turks. This rise in FPÖ support, which did not appear in earlier democratic elections, coincided with a noticeable out-migration of Turkish residents from these areas. The FPÖ’s campaign effectively linked centuries-old Turkish atrocities with contemporary anti-Muslim rhetoric, illustrating how historical memories can be manipulated for political gain.
It may seem like words can only hurt, but they can heal, too. Economist Tomohiro Hara, now at Musashi University, studies the cultural and political outcomes of South Africa’s ‘Rainbow Nation’ post-apartheid ideology. Using a difference-in-differences approach and leveraging variations in the construction of television transmitters across South Africa, Hara finds that television broadcasts of ‘Rainbow Nation’ programming increased the use of native languages in South African schools by approximately 3 to 4 percentage points, suggesting that media can promote cultural diversity. Exposure to television broadcasts also boosted support for the ANC, which advocated for national unity, without increasing support for ethnically focused parties like the IFP. In short, Madiba’s post-apartheid ‘Rainbow Nation’ message had real consequences.
So what does this mean for South Africa today?
Think about it this way: My second-year students this year were born in 2004. The only South Africa they know is one of loadshedding – which began in 2007, and then became more commonplace after 2014, when they turned ten; one of corruption – the Zondo Commission was established in 2018 when they entered high school and published its report in 2022 when they wrote matric; and one of zero economic growth – the South Africa they were born into is exactly as rich as the one they live in today, 20 years later. They know only a South Africa where wealth was redistributed from the workers and the unemployed to the politically connected tenderpreneurs, where extraction or, worse, expropriation was trumpeted as the cure for our economic malaise, and where any private enterprise was subjected to an increasing array of laws and regulations to boost so-called transformation. They know only a South Africa where entrepreneurs, shareholders, businessmen and women – ‘the private sector’ – have been vilified and scapegoated by politicians and the chattering classes for the social ills of poverty, inequality and unemployment. Ask any 20-year old South Africa the formula to build a prosperous society. Few will get it right: it is through science and technology that we improve our productivity.
The Government of National Unity is a chance for a new message, a new narrative. The expulsion of the expropriators within the ANC means that its president, also South Africa’s president, can be more open about the need for growth and, importantly, the way to achieve it. Gone is the need for a ‘developmental state’, a euphemism for the self-enrichment of a political elite. Now, Ministers within the GNU can stress the need for private initiative to be a positive force for change. Make no mistake: there are still those, even within the ANC and other GNU partners, who look distrustingly at private initiative, who still believe that the only transformation in society must be one where the state marches ahead. They easily forget the failures of almost every state-owned entity over the last two decades. They conveniently forget that it was the private initiative of people like you and me – owners of houses and businesses – that fixed Eskom’s embarrassment by installing solar panels that now generate more power than Medupi ever will.
President Cyril Ramaphosa made a good start. ‘We have decided to place inclusive economic growth at the centre of the work of the Government of National Unity and at the top of the national agenda.’ Good. ‘As the Government of National Unity, we are resolved to intensify our investment drive, encouraging and enabling businesses to invest in productive capacity.’ Even better.
That is a refreshing improvement on what came before. Consider the sentiment in our budget speeches since 1996, reflected in the above graph. To compare the sentiment, I plot normalised GDP growth and the BER’s Consumer Confidence Index. Using a scaled sentiment score analysis, our current Minister of Finance, Enoch Godongwana, has been the most pessimistic since 1996. That is to some extent understandable; he has had to battle through Covid lockdowns and loadshedding. But even when you construct a technology and innovation score – those fundamental building blocks of growth, remember – Minister Godongwana has the lowest score of all previous post-apartheid finance ministers. We need a new vision, a new ideology of inclusive prosperity that is built on free enterprise and entrepreneurial ingenuity. Call it ‘The Renovator Nation’.
There is one final reason why words matter. Entrepreneurs and the products and services they create are not simply a means to the end of higher economic growth. They embody the virtues that elevate society morally and ethically. Deirdre McCloskey argues in her books that entrepreneurs, through their creativity and innovation, bring about positive societal change by encouraging qualities such as prudence, justice and courage, just as it did in eighteenth-century England.
The stories we tell about entrepreneurs and economic growth matter because it reinforces the values we wish to see in society. By framing private enterprise in moral and ethical terms, we not only highlight its economic benefits but also its role in fostering a just and cohesive South Africa.
Talk may be cheap, yes, but it can also be transformative.
An edited version of this article was published on News24. Support more such writing by signing up for a paid subscription. Part of this column was based on research by Anja Steyn, a graduate economics student at Stellenbosch University. The images were created with Midjourney v6.