The impact of macroeconomic policy on employment in South Africa

THE South African government has dumped employment as a macroeconomic design on the department of labour.

- PALI LEHOHLA

This is a serious anomaly that removes an essential component of employment, growth and prices from the main economic actors in macroeconomics, which are namely Treasury, Reserve Bank and trade and industry.

To relegate employment to the department of labour is to ignore a yet vexed question of the Phillips curve that addresses the relationship between unemployment and inflation.

Whilst questions have been raised around this relationship and Vermeulen in 2017 asked “whether the Phillips Curve is dead?” in a title he penned, the question remains a policy debate in which some central banks including South African Reserve Bank have concluded that perhaps unemployment is not their mandate.

As a consequence, and in South Africa specifically, this has been dumped on the department of labour, which intrinsically is marginal to macroeconomic policy designs and their attendant tools. We need to bring in Chapter 15 of Volume One of Capital.

In this chapter Karl Marx dedicates one hundred and fifty pages on “Machinery and Modern Industry.”

It will be made clearer in this article that Machinery and Modern Industry as explicated by Marx has not received global attention as a fundamental macroeconomic feature. It has rather been reduced to innovation - a fascination with smartness in technology, artificial intelligence and autonomous systems, instead of a deep breath taking historical epoch.