DEBATE
                      A REPLY TO BEN FINE
                                                                 Nicoli Nattrass
The following assumptions appear to underpin Professor Fine's criticisms of my
work (Fine, in Transformation 25,1994):
1) Business-friendly economic policies are by definition a bad thing: it is not
    politically-correct (in fringe-left circles that is) to be nice to business; and
    in any event, business confidence is fickle and hard to measure, so therefore
    we should ignore i t
2) The ANC's shift in economic strategy from its earlier ideas of 'growth through
    redistribution' to its present sound fiscal stance is a sell-out (of the earlier
    policies supported by Professor Fine), and hence is a very bad thing indeed.
3) The idea of keeping wage growth in line with productivity is problematic
    (presumably because this will promote the economy's competitiveness,
    strengthen capitalism and thereby lessen the chances of a socialist revolu-
    tion).
4) The possibility of any potential trade-off between wages and employment
    should be dismissed because it just might be possible (assuming spare
    capacity and depressed demand) to experience a simultaneous increase in
    output, employment and wages. Other more plausible scenarios should be
    ignored.
5) One should bury one's head in the sand when it comes to the vexed lessons
     of international experience: South Africa is apparently too different and
     complex for anything to be learned of practical value.
My argument is essentially this:
 1) The international capitalist system is characterised by highly mobile capital.
     For investment, growth and sustainable job creation to take place, economic
     policies must be business- friendly. This hard fact of life cannot be wished
     away.
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DEBATE                                                                   NATTRASS
2) International competitiveness is essential for sustained growth. This implies
     that wage growth should not exceed that of productivity. Note that this does
     not imply that wages must fall. It implies only that wages must rise in line
     with productivity growth.
3) Soum Africa has a terrible unemployment problem. To assume that there is
     no trade-off between employment and wages is irresponsible. The costs to
     poor people are simply too high.
4) Economic policies should be designed in accordance with what is
     reasonable, empirically sound and feasible. Where local empirical evidence
      is insufficient, policy makers should look to the international experience and
      proceed with caution.
Professor Fine apparently has a problem with policies (such as the ANC's), that
 accept the (capitalist) status quo as a given. If he can provide the evidence and
 argument in favour of an alternative approach, I and many others would be
 delighted to hear it Like Professor Fine, I am in favour of a more just and
 equitable world. My judgement happens to be that social-democracy is the only
 feasible strategy. Redistribution must be accompanied by strong economic
 growth - and hence investment
 Sniping at this is all very well. However, until Professor Fine addresses my
 arguments seriously and empirically (ie. shows why and how an alternative
 understanding of the South African economy and international experience un-
 dermines them), his position remains vacuous. Simply telling us that the RDP
 will fail - without providing any positive alternative strategy - is most unhelpful.
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