Financial, Economic and Social Mood Update (March 1, 2020)
The globe is in the midst of a lethal pandemic which may be seen as a “black swan” (i.e., unforeseen) event which is collapsing markets and economic activity. The US stock market has lost 17 percent of its value since the historic nominal record of February 12. Real property values in the hottest (largely coastal) US markets are down by 15 percent. Interest rate yields are already at historic lows for all of recorded human history. Central banks will likely intervene in the markets very shortly by making rates even lower (many rates especially in Japan & Europe are already negative). As I have said in the past, this is the modern day version of “printing” worthless fiat currency. The worthless markets & paper fiat currencies will likely be replaced by electronic digital currencies backed by real precious metals, largely gold bullion. Remember that the supply of precious metals and crypto-currencies is limited, which means that their values will eventually skyrocket.
The subject of the March 2020 update reverts back to politics. Our world today is plagued by challenging times and societal unrest. When conditions are not as good, people are less patient and more demanding with respect to correcting wrongs from the past and present. The examples I will use to illustrate this come from southern Africa, but these examples can be and should be applied to the entire world. The gist of this message is that the overwhelming mass of the “have nots” in the world must be invited & allowed to partake in the political & economic system before it is too late…………..the way global events are unfolding, it may already be too late. In any case, the alternative to political & economic inclusion is a society at war with itself – an alternative to horrific to contemplate.
The historic example of southern Africa
When the era of colonialism was winding down, there were still a number of nations in the southern part of the African continent which still practiced minority rule – in other words, enfranchised rule by a relatively small minority of the population over the disenfranchised majority of the population. The issue of political disenfranchisement can, has been and is unfortunately done to minority groups as well. The last countries of Africa which practiced this massive form of disenfranchisement were the Republic of South Africa, Rhodesia (now known as Zimbabwe) and Southwest Africa (now known as Namibia). The former Rhodesia was actually once known as Southern Rhodesia, with Northern Rhodesia being the modern day country of Zambia. Rhodesia was named after Cecil Rhodes, an Englishman who colonized and exploited both the former Northern and Southern Rhodesia for their people, flora, fauna and natural resources (most especially for gold bullion). Southern Rhodesia became a magnet for settlement (immigration) from the British Isles and from South Africa proper. Non-Bantu Africans comprised as much as 9 percent of the population of the former (Southern) Rhodesia in the 1970s – 7 percent White (Caucasian or European, mostly British), one percent Asian (largely from the Indian subcontinent) and one percent Coloured (largely Afrikaans speaking & Dutch Reformed Coloured from South Africa). The native Black African population is largely Shona with fewer than one-fifth being Ndebele. The Ndebele population was largely led by the late Joshua Nkomo, whereas the majority Shona population had numerous political leaders including the late Robert Mugabe and the late Abel Muzorewa. A majority of the White population supported the late Ian Smith, whose former “Rhodesian Front” party had very tight voting rights rules which in effect disenfranchised most of the non-White population of the former (Southern) Rhodesia, now known as Zimbabwe. The problem with the Ian Smith approach is that the world was moving much, much faster than he and his supporters were willing to move. The result is that a man such as Robert Mugabe eventually became the new Prime Minister of an independent Zimbabwe. Mugabe was an avowed Marxist, but worse than that, he proved himself to be a de facto “kleptocrat” (a political leader who steals from his or her country and people) and a virtual dictator who refused to let go of power for very many years. What happened to Zimbabwe is a tragedy, and that tragedy is ongoing as of today. The former breadbasket of southern Africa faces ongoing starvation. The overwhelming majority of the European (White) population was forced leave, which eliminated a great deal of capital and expertise. The national fiat currency became virtually worthless.
By contrast, the Republic of South Africa chose a different and much more realistic path when compared to Rhodesia or Zimbabwe. The most recent European (or White) Prime Minister, Frederik Willem de Klerk (then leader of the former National Party of South Africa) chose to release Nelson Mandela (then leader of the African National Congress) and negotiate a peaceful transition to majority rule, which transpired in 1994. The largely Afrikaans speaking National Party had ruled South Africa from 1948 until 1994, enacting “Apartheid” (“apartness” in English) legislation which made racial segregation even more mandatory and official than before. Apartheid paid lip service to separate but equal development, but never followed through in practice…………that was not its actual intent. The British had established the former “Union of South Africa” in 1910 – this being their solution after the Boer War in which the British Empire conquered by force of arms the former Boer (Afrikaner or Cape Dutch) republics of southern Africa – the Cape Colony, the Natal (largely British Whites among the European population), the Orange Free State and the Transvaal. The British Empire took control of southern Africa from the Dutch (who settled the Cape of Good Hope in 1652) as a result of the Napoleonic Wars in Europe (1792-1815). In the 17th century much of the Black African population of southern Africa was still Khoisan (once called “Bushmen” or “Hottentots”). The indigenous Khoisan peoples were largely hunter-gatherers, and had populated about half of the African continent in prehistoric times. Over time, the Khoisan peoples were largely displaced by the much larger Niger-Congo (Bantu) population from central Africa, and all of these groups of people came into contact with settlers and colonists from Europe and Asia. The Afrikaners (or Cape Dutch or Boers) were largely Reformed Protestant Dutch, Germans and French Huguenots. “Boer” is the Dutch word for “farmer.” The Asians were largely East Indians plus a number of Malays and Chinese. The “Coloured” population of southern Africa is yet another distinct and unique ethnic group. Their ancestry is largely a union of White Afrikaner, Black Khoisan and Malay background. Today, most Coloureds speak Afrikaans (Cape Dutch) and belong to the various Dutch Reformed churches. Modern South Africa is 80 percent Bantu Black African (represented by at least 9 Bantu languages), 9 percent Coloured, 8 percent White (largely Afrikaner, English or Portuguese), almost 3 percent Asian and less than one percent indigenous Khoisan Black African.
South Africa has come a long way especially since 1994, and her current challenges include extending true economic opportunity to the Black African majority. Coloureds and Asians have done very well since the end of Apartheid, but Black Africans perhaps need more education, motivation, incentive and reward to realize the fruits which a market economy has to offer.
Namibia – the former Southwest Africa (colonial German Southwest Africa until World War One) has perhaps addressed the challenges of inequalities the most successfully in southern Africa. Like the Republic of South Africa, Namibia has enjoyed a peaceful and democratic transition to majority rule since 1990. The people of Namibia are 70 percent Bantu Black African (speaking 5 Bantu languages), 15 percent Khoisan indigenous Black African (speaking 3 Khoisan languages), 8 percent Coloured and 7 percent White (largely Afrikaner, German and English). The government of Namibia has made it policy not stress the issue of race as officially as in other countries, which has translated into more social harmony.
When we compare the challenges of southern Africa to the challenges we face worldwide, I believe that the road taken by Frederik Willem de Klerk is the one we must choose – we need to avoid the road taken by Ian Smith. By this I mean that the vast majority of the earth’s inhabitants continue to be excluded from true voter enfranchisement and the opportunity to share in the fruits of education and economic reward. In order to promote social peace & harmony (and to do what is right or correct), we must continue to move our democracies toward greater popular representation irrespective of race, national origin, ethnicity, language, affluence, gender, faith, religious beliefs, confession, parentage and so forth. The alternative to moving in this direction is not thinkable or acceptable, because the result of continued exclusion will only translate into conflict and violence.
