Antitrust and the Informal Sector in South Africa

Dennis Davis, William E. Forbath, Lucie E. White & Julia Dehm –

This is the second post in a two-part series about law and political economy in the South African context. The series reports on a collaboration among leading ‘heterodox’ economists, left-wing sociologists, high level government policymakers, and legal scholars, advocates and activists aimed at “thinking large” about reconstructing the nation’s political economy.

The way out of South Africa’s present crisis lies not only in institutional reform, the topic of the first part of this two-part series, but also in structural and redistributive economic reforms.

Participants in our conversation offered a number of potentially transformative economic proposals, ranging across taxation and public investment, land reform, industrial policy, and sustainable agriculture. Of the various pathways of development we discussed, two seemed especially striking to the participants from the U.S.

Robust Antitrust and Competition Law

The first such  pathway – encouraging small and medium sized firms via competition law – was striking in the way it tracked conversations on the U.S. left today about weaning antitrust from “consumer welfare,” and renewing its original aims by taking on today’s monopolies and oligopolies, with the goals of securing space for competitive, medium-sized firms, and of safeguarding the polity itself, as well as the market, against the oligarchic power of big capital.

Several participants underscored that South African competition law is now primarily focused on redressing abusive or coercive behavior. The focus on behavior, they pointed out, fails to address the ways in which the structure of certain markets and the domination of big, oligopolistic firms can operate to stifle equitable growth, shaping markets, politics and society at large in deeply problematic ways.

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Visions of Radical Reform in South Africa: Toward a New Constitutional Economy

Dennis Davis, William E. Forbath, Lucie E. White & Julia Dehm –

This is the first post in a two-part series about law and political economy in the South African context. The second post can be found here. The series reports on a collaboration among leading ‘heterodox’ economists, left-wing sociologists, high level government policymakers, and legal scholars, advocates and activists aimed at “thinking large” about reconstructing the nation’s political economy.

Law and Political Economy is about rekindling radical political economy for the twenty-first century, understanding law’s part in today’s political-economic order and imagining how law may figure in its transformation. While most of the posts on this blog have focused on the domestic U.S. context, law and political economy is a global project. Nowhere is this project more urgent than in South Africa.

It goes without saying that great economic inequality is a longstanding legacy of apartheid.  But Jacob Zuma’s tenure as President has been branded a period of “state capture”; key democratic institutions were hollowed out and repurposed for private enrichment.  So, the present crisis is marked by deepening class antagonism, an ever-growing distrust toward government and political elites, and mounting rage and despair among the poor black majority.  Many distrust the possibilities of democratic politics to make good on the egalitarian promises of the nation’s twenty-one year old Constitution, and the most thoughtful observers of and participants in the nation’s public life doubt that its democratic institutions can endure without radical reform.  Yet, as Cyril Ramaphosa begins his tenure as President, there are some glimmers of hope.

Last May, the four of us invited a group of South Africa’s leading “heterodox” economists, left-wing sociologists and high-level government policymakers, together with prominent social and economic rights advocates, legal scholars and community activists to begin a collaboration in “thinking large” about reconstructing the nation’s political economy.

In this first part of a two-part series, we will briefly sketch the thinking that prompted this effort, and a few initial ideas for institutional reform that have begun to emerge from it. In the second part of this series, we will outline some of visions of redistribution that emerged from our conversation. A longer account of our conversation can be found in a White Paper we prepared for the Open Society Foundation.

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