SA’s 4FoP (1/6): Introduction
This series is made up of 6 essays which are the introduction, the four factors and lastly the concluding remarks. The following essays will set the scene by introducing fundamental concepts that will be relevant to the whole series and highlighting the dilemma that faces South Africa in this respect.
One of the things you might remember from your EMS class could be the 4 factors of production. These 4 basic elements are used to understand the value creation process. You may have even gotten homework to categorise a list of items into the quadrants of Land, Labour, Entrepreneurship and Capital. In this series of six essays, I hope to explore these 4 elements, their interplay, and their implications for contemporary South African society. I hope we will get to understand the South African economy and its history through the lens of these 4 factors.
We will begin by firstly building this foundation by going through how societies and economies develop. The first thing to outline is that two of these elements are non-human and the other two are human. The non-human factors are Land and Capital whilst other human factors are Labour and Entrepreneurship. The concept of land is quite simple; It is the earliest creation of the four factors. We shall start with land to follow the sequence in which these elements come into effect.
The concept of land is straightforward, encompassing air, water, biodiversity, minerals, soil, and rocks. These elements predate human existence. Humans only come into the picture afterwards because they depend on land and the natural resources which come with it. We can characterise this dependency as the basic human needs, these are fundamental to understanding human beings and how they operate. The basic human needs can be organised through Abraham Maslow’s Hierarchy of needs as tiers. These tiers are:
- Physiological needs
- Safety needs
- Love and belongingness needs
- Esteem needs
- Self-actualization needs
These 5 tiers are ordered by priority in terms of how crucial they are to human survival; therefore, you will note that Physiological needs are the most urgent and basic survival needs. The physiological needs are air, food, water, shelter, clothing, warmth, sex, and sleep. Human existence’s priority is to firstly satisfy these needs. It is no coincidence that there is an absolute perfect compatibility between human needs and what the land provides. This harmony is part of the grand design.
Once the needs of this first tier have been met, humans progressively shift focus towards other tiers that follow, and we can demonstrate this in the following way. So, as an example, Oxygen comes with the natural environment so it’s a given, much as water is not as freely available in the atmosphere, one could settle next to a reliable source such as a river to get water. Warmth in this context would come from the daily sunlight or bonfires at night. Clothing is less essential in the South African warmth but it could easily be made from leaves or animal skin. Sex is a human-to-human interaction therefore you would just need to find a partner to court. The shelter was one of the projects that would temporarily need human effort to build a structure or find one such as a cave. What becomes the primary recurring challenge is the provision of food hence even the earlier human species were defined as hunter-gatherers or even pastoralists.
The point I make is that productivity and development will be organised to address the basic human needs in a particular order. Early civilizations are mainly preoccupied with mere survival rather than modern conceptualisations of an economy or markets. This is why early productive forces in almost all civilizations will begin with agriculture, fishing or hunting. Ultimately this introduces the idea of a continuum in the development of an economy. We start in the primary sector with agriculture in particular for food security and only then do we get into the secondary, tertiary and quaternary sectors thereafter which also aligns neatly with Maslow’s Hierarchy. This is how stable, and sound human civilisations usually develop over time.
This idea has been well theorised by Walt Whitman Rostow as the stages of economic growth and development. Much like what I have presented, he suggests that the first phase is a subsistent, agricultural-based traditional society that is very labour-intensive. In his theory, society then goes on to develop tools for production and manufacturing capacity then eventually becomes industrialised and urbanised. The industrialisation era unlocks intensive growth potential as institutions, skills and markets develop around those industries which take off. Later, as technology and innovation evolve, the economy matures and then diversifies its industries as labourers’ and entrepreneurs’ standards of living begin to improve. Lastly, a stage of mass consumption and consumerism develops as the economy flourishes and more capitalist tendencies begin to emerge.
These shifts affect the economy’s structure in several ways across the various stages of economic growth and development. One of the significant ways I would want to highlight is the employment structure. Initially, labour is concentrated in the primary sector because those industries are labour-intensive. Lots of the work in the primary sector starts as manual then as production scales, tools and technology become involved. This relieves the primary sector of its labour-intensive nature and creates more work in the secondary sector. This is where manufacturing and processing occurs which also begins as labour intensive but soon follows the same pattern up to the tertiary and quaternary sectors. The employment structure morphs right across the stages of economic growth and development in this particular fashion. Along with this, the level of skills required also differs over time as more senior sectors of an economy need more sophisticated skills and abilities.
The intersection between natives who resided in Southern Africa and the European settlers who immigrated to Africa fundamentally disrupts the order of society and its progression as it has been conceptualised. The two inhabitants were not just different in race but exhibited several differences. They find themselves playing different roles in the 4 factors of production, one as a labourer and the other as an entrepreneur. They are in pursuit of different needs in Maslow’s hierarchy, one seeking the basic physiological needs as the other desires to self-actualise. They have different perspectives of which stage of economic development they found themselves, one without land for farming or shelter whilst the other laments wi-fi speed being unable to load Netflix in Ultra-definition. This demonstrates just how one remains grovelling to put basic foods on the table and pay rent whilst the other is overwhelmed by choice in their era of mass consumption. It is for this reason that there exists friction between these two individuals.
This friction between the inhabitants of South Africa is tangible, it can still be felt in the modern-day South African society. When the two observe the same South African society, they prescribe different remedies to the same set of challenges. This is because they assume different positions in society. I hope to further unpack this dilemma in a series of essays focusing on the 4 Factors of production. In search of the truth, we will reflect on what went wrong in South Africa’s development, reconciling South African history and its present-day implications. What happened to Our Land, Our Labour, Our Entrepreneurship and Our Capital? And how then can we attempt to resolve it?
Asante sana.
