If not the most renowned economists of all time, Adam Smith and Karl Marx were almost certainly the most impactful. Their ideological and philosophical theories surrounding markets, freedom, choice, power and government’s role in human affairs left indelible marks on how we understand economies and societies. Smith, often called the “father of capitalism,” championed free markets and the “invisible hand” as the most effective way of distributing resources. In contrast, Marx, the “father of communism,” critiqued the inequalities spawned by capitalism and envisioned a classless society where the means of production are communally owned. More than 140 years after their founders’ deaths, these two ideologies are still warring with each other.
I recently returned from South Africa — a country I visit yearly and where I hold dual citizenship — and witnessed this dynamic firsthand. South Africa has become a modern-day battleground for the ideological war between Smith and Marx, partly because citizens are increasingly dissatisfied with the current government.
Thirty years post-apartheid, the African National Congress (ANC), the party of Nelson Mandela, renowned for its pivotal role in dismantling apartheid, currently governs South Africa. However, many are frustrated with present-day issues. South Africa currently has the world’s highest Gini coefficient, a proxy for a country’s wealth inequality. South Africa’s employment rate has also been deteriorating; today overall unemployment is just under 33%, while its youth unemployment (15-34 years) is an alarming 45.5%. Moreover, nearly ⅔ of Black South Africans live below the poverty line. Loadshedding (intentional blackouts to ease pressure on the power grid) remains a constant source of frustration for South Africans. Nearly non-existent 20 years ago, load-shedding is a daily occurrence, happening on 298 days last year, and lasting from 2-8 hours per day. Similarly, worsening infrastructure is damaging the water supply, making nearly 46% unsafe for consumption. While the ANC began its governance amid widespread euphoria, the nation’s patience with the party is wearing thin. Several decades of corruption and scandals and cronyism have also eroded trust in the party.
As a result of these factors, the ANC lost nearly 20% of its support in May’s election, falling short of a majority for the first time in South Africa’s history. This shift is a clear indication of widespread dissatisfaction with the post-apartheid reality, a sentiment consistently voiced by people throughout the country. Two other parties have significantly eroded the ANC’s voter base—the Democratic Alliance (DA), a pro-business, anti-regulation party, and the Economic Freedom Fighters (EFF), a left-wing party advocating for wealth redistribution, state ownership of key industries (mining, banking and telecommunications), and land expropriation without compensation.
The DA and EFF’s divide reflects fundamentally different approaches to economic policy and governance. The DA embodies Smith’s principles of free-market capitalism and limited government intervention, while the EFF aligns with Marx’s ideas of wealth redistribution and state control over important industries. The DA, like Smith, advocates for market-based solutions to address poverty and income inequality. For example, when referring to Eskom, South Africa’s energy supplier, the leader of the DA, John Steenhuise, advocated to “open up the market to full competition.” This advocacy for the privatization of state-owned enterprises to boost efficiency and economic growth reflects Smith’s belief in private innovation and minimal government intervention. Meanwhile, the EFF’s proudly Marxist approach focuses on wealth redistribution, claiming “the liberation of the continent will come from the expropriation of land without compensation.” In contrast to the DA, the EFF emphasizes the nationalization of key industries such as mining and banking to ensure that the wealth generated benefits the broader population rather than a small minority, aligning with Marx’s vision of state control over the means of production. Interestingly enough, the EFF uses its rhetoric for reform rather than Marxist revolution. Wealth redistribution also taps into the land hunger of Black South Africans, who were historically dispossessed of their lands, and the yearning for property ownership as a kind of restorative practice.
In the middle of our trip, the ANC announced a coalition government with the DA, along with three other smaller parties. This was somewhat surprising, as the DA is often perceived as representing predominantly white South African interests. However, the coalition has sought to address these concerns, stating that it aims to address “social justice, redress, equity and poverty alleviation” while “maintaining peace, stability, and safe communities.” In the wake of this news, the South African stock market and the Rand strengthened. The coalition government has a four-year window to demonstrate significant improvements in these areas to regain South Africans’ trust. If they fail to deliver tangible results, it is likely that the EFF will gain additional support in the next election and potentially threaten the coalition.
As the ideological battle between the economic philosophies of Smith and Marx continues to shape global discourse, South Africa stands at a crossroads. The success or failure of this coalition could significantly influence the country’s economic and political trajectory, shaping its future for years to come.
