E-tolls consultations start today (and academic economists also have an opinion) Reply

etollsA month-long process of consultations about the Gauteng Freeway Improvement Project and e-tolls starts today. Everyone will be making presentations, from labour to business, to civil society organisations, and the economic, social and environmental impacts will be discussed. From this blog, we thought that we would chip in on behalf of academic economists.

We have made a couple of posts before and again want to present the case for congestion charging:

  • If people receive benefits from nice freeways (like lower vehicle maintenance costs and shorter commuting times), they should pay for them.
  • Exemptions can be used to mitigate some of the impacts of the user pays principle on the poor – and if you own a car and drive on freeways in Gauteng, you are not “the poor”.
  • And increase in the fuel levy is a regressive tax that would hurt the actual poor all over the country so that the rich can drive on nice freeways in Gauteng.

It is at this implementation level where the battles should be fought. We need more information about the costs of the project, how prices are set and about who will be making money from this (since it is a public good, costs should be low and no-one should be making large profits). But there has not been enough transparency in this regard. With good governance, everyone should happily be paying their bit.

Just read the whole post, I think it is a good one.

Economists at the IBC conference Reply

DerickAnmarRayond by IBC A number of our colleagues traveled to Swakopmund this week for the 2014 IBC conference. Prof Parosns delivered the key note address on business challenges in a post-Piketty world.

Prof Derick Blaauw and Mrs Anmar Pretorius presented papers at the conference:

  • Anmar’s paper was witht Dr Alain Kabundi of the Reserve Bank with the title Dynamic integration of emerging market bond yields into the global bond market.
  • Derick’s paper was on Factors which enable the existence of waste pickers in South Africa’s informal economy: A systematic review, written in collaboration with
    Prof Rienie Schenk (UWC) and Me Kotie Viljoen (UJ).

Here they are relaxing at the Gala Dinner of the 8th International Business Conference in Swakopmund. The chair of the conference said: “work hard and play hard”. Using that as a guide they reflected on the conference with good food, red wine and good company at their table. Suggestions for the venue for the 9th International Business Conference ranged from Botswana to the Victoria Falls or the Serengeti.

Parsons on Piketty Reply

This morning Prof Raymond Parsons is giving the opening address at the 8th International Business Conference in Swakopmund, Namibia. The title of the presentation is “Some business challenges in a post-Piketty world”.

Prof Raymond Parsons

Prof Raymond Parsons

Piketty asserts that if ‘capitalist economies’ are left to their own devices, then on present trends they will experience ever greater inequality as the rich get richer, reinforced by globalization and inheritance….especially in mature societies the main driver of inequality has been unequal ownership of assets, rather than divergences in income.

Prof Parsons argues why we all need to take the Piketty hypothesis seriously:

  • it has struck tremendous resonance with intellectuals and policymakers throughout the world grappling with issues of unemployment, poverty and inequality, especially in the aftermath of the 2008 financial crisis…a highly influential book
  • assessments fluctuate between those who think his work is ‘Nobel-prize worthy’ and those who see him as ‘a modern Marx’…there is nonetheless also general consensus that he must be taken seriously…. Piketty addresses the fundamental challenge of our time: inequality
  • closer home it is a matter of time before Piketty’s work begins to influence debates about wealth and redistribution in SA, given the domestic situation…Piketty’s work broadly resonates with the relevant SA profile
  • in fact, the first lines of the first chapter in the Piketty book refer to the 2012 Marikana tragedy in SA as an example of ‘distributional conflict’ and a glimpse of the ‘threat to democratic societies posed by extreme inequality’, … Piketty doesn’t hate capitalism, he just wants ‘to fix it’, he says.

He also gives some macro and micro guidelines for business. It includes supporting the NDP, pro-competition policies and better relationships with employees at the work place. Involvement in the activities of organised business and taking a long term view of investment in skills and training are also put forward as guidelines.

You can download the full presentation here: Parsons on Piketty