In South Africa’s first democratic election in 1994 the ubiquitous posters of the African National Congress read ‘Jobs, jobs, jobs’ and ‘A Better Life for All’. The latter slogan is trotted out at each succeeding election; the former has never been seen again. The reason is simple: unemployment is now far higher than in 1994 and heading sharply upwards. On the most commonly used measure, the jobless figure has hovered in the 38–40 per cent range for some time; though even that counts people as employed if they have but a single hour’s paid work (say, washing and polishing a car) in a week. On any reasonable measure of formal employment, over half the working population is jobless. True, one must also allow for the informal sector of street vegetable and fruit sellers, car guards, hawkers and the like. But very few enter that sector except out of desperation, and it shades easily into a vast underclass of beggars, prostitutes and criminals.

The reasons for this monumental failure are complex. The fact that around a third of the anc’s mps and ministers are members of the South African Communist Party, and that most of the rest still rely on vulgar Marxist terminology, hardly increases domestic or foreign investor confidence. The flight of around one fifth of the white population since 1994—nearly a million people—represents a loss not only of perhaps 250,000 professional and entrepreneurial workers, but also of the 5–7 jobs which they are each estimated to have generated. The new government has also liberalized the old apartheid siege economy, which has cost jobs in the defence industries and in the erstwhile highly protected sectors that have failed to cope with Asian competition.

More ominous is the complete failure of post-apartheid education reform. The first Minister of Education, Sibusiso Bengu, blundered by getting rid of many of the best teachers, while his successor, Kader Asmal, compounded this disaster by reducing standards (in order to get a higher pass rate) and introducing a new syllabus incomprehensible to many teachers. On top of this many township schools are racked by violence, abusive and truant teachers, and a collapse of organization and morale. The government throws money at the problem but is scared of standing up to the thuggish teachers’ union, which vigorously objects to any attempts at reform. The result is a catastrophe worse than the original introduction of Bantu Education by the apartheid government—indeed, it is quite normal to hear Bantu Education schools being held up as models far better than the present township equivalents. In addition many of the universities are lamentably managed so that there has been a clear decline in higher education too. The result is that the skills gap left by departing white (and Asian) professionals cannot be filled, and that South Africa simply lacks the skills required to maintain and run its sophisticated infrastructure and private sector.

The civil service has become a black hole of low skills, corruption and incompetence, and is now largely beyond government control. For example, Western aid donors elsewhere in the continent discovered that South Africa had become a major donor, thanks to hundreds of unplanned and uncoordinated acts of generosity by visiting South African ministers and parastatal bosses, all wanting to ‘wow’ their hosts in ‘big man’ style. Eager to ensure that this aid effort was coordinated with their own, the eu states financed an investigation by the South African Treasury into which ministries and parastatals had given aid. Over two years later it has proved simply impossible to get ministers and bureaucrats to reply to such enquiries. The lower-level administration serving provinces and municipalities is in an even worse state, crippling development initiatives before they start.

Panicked by rising unemployment, the Mbeki government responded by creating Africa’s first welfare state. Old-age pensions were equalized up to the apartheid level for whites, and poor households were allowed a modicum of free water and electricity—to which millions added a great deal more both by illegal connections and by a steadfast refusal to pay rates and taxes, thus bankrupting two-thirds of the country’s local authorities. To prevent their complete collapse, the Treasury has stepped in and regularly wiped off the bad debt, which is to say that this huge burden is routinely assumed by the national budget. The government has also introduced disability grants, now claimed by many of South Africa’s 5.7 million hiv sufferers, and child allowances for those up to the age of 15, which the anc now promises to increase to 18. The result is that 13.5 million South Africans, out of a total 2008 population of 44 million, are now formally benefit recipients, although in practice the money is spread between many more family members. Certainly, the general effect is to make unemployment more bearable. Between 1993 and 2006 the percentage of the unemployed living in households with no connection to the labour market rose from 20 to 38 per cent. In other words, the extension of welfare has seen the consolidation of nearly two-fifths of the population into workless dependency at the base of society.

At the same time the anc government has energetically promoted Black Economic Empowerment (bee), a form of crony capitalism which has seen politically well-connected blacks take shares in predominantly white-owned and managed businesses, producing many instant millionaires. This policy, together with a determined push for affirmative action in every sphere, has seen the creation of a burgeoning though mainly parasitic black bourgeoisie, largely devoid of real professional or entrepreneurial skills, owing its good fortune almost entirely to companies and institutions created by others. The new rich live in a completely unreal world, enjoying the external material symbols of wealth and success—driving Mercs, living in stylish mansions, owning farms and employing servants—and often flitting from job to job, their ‘success’ guaranteed essentially by skin colour, so that many of them have come to believe that they are true Renaissance men and women, capable of running businesses and universities, or acting as Africanist philosopher-kings or queens. Their lifestyles are modelled on those of the old white rich; but whereas apartheid made the latter virtual outcasts in international society, their black successors enjoy, temporarily, universal currency. It is an odd, hollow and doubtless unsustainable world, in which the full gamut of Fanonist psychological stereotypes is on garish display.

This new black bourgeoisie was both the chief beneficiary and the driving force behind the Mbeki presidency, for all the latter’s predilection for Marxist-Leninist talk. Mbeki always justified his policies by reference to the National Democratic Revolution—a sort of Third World nep—thus wrong-footing his opponents on the left, the sacp and its allies in the Congress of South African Trade Unions, who could only demand a more radical form of ndr. The actual result of the Mandela and Mbeki presidencies was a sharp increase in inequality in what had been, to start with, one of the most unequal societies in the world. In 1995, a year after the advent of democracy, when there was much heady talk of greater equality, the Gini coefficient measuring income distribution stood at 0.64. By 2005 this had risen to 0.69. Studies show that, whereas in the past black–white differences were the principal component of inequality, these have now narrowed considerably but have in turn been overtaken by widening gulfs within the black population.