How Julius Malema's socialism will destroy South Africa?

Julius Malema is a South African political leader who is well-known across the continent for his radical positions on political, economic, and social matters. The leader of the Economic Freedom Fighters is a staunch nationalist and a strong believer in socialistic values. He is beloved by many. Indeed, he is seen as a liberator, and the spokesperson for the Black South Africans who have been oppressed during the apartheid regime, and continue to endure the sequel of this repressive regime. Some have even called him the African “Che Guevara” for his clothing style, which is quite similar to the Argentinian-born Cuban revolutionary leader. Indeed, Malema’s similarities with Che Guevara are not limited to his clothing style. They are ideologically similar.

Julius Malema is an unequivocal Marxist-Leninist. He preaches land reform, equitable wealth redistribution, and nationalization of the South African economy as a means to repair the socioeconomic damage done to Black South Africans. What’s interesting is that these views that he advocates for have been implemented countless times in every country that tried socialism, and the result has always been the same: Abject failure. But Mr. Malema is convinced that his ideas will be different, and won’t produce the same outcomes as his predecessors who tried them. Robert Mugabe is a perfect example. He believed that land reform, the equitable distribution of wealth, and the nationalization of the Zimbabwean economy would make Zimbabweans richer. But the results of his land reform were catastrophic. His land reform policies generated impoverished Zimbabweans as agricultural production substantially declined, which in turn decreased their income per capita since inequalities rose drastically as the political elite became wealthier while ordinary Zimbabweans were living in misery, and the inefficiencies of the Zimbabwean government in managing the economy led to hyperinflation and the utter destruction of their monetary sovereignty.

Fidel Castro, Muammar Qaddafi, Hugo Chavez, Robert Mugabe, Julius Nyerere, Kwame Nkrumah, and Mao Zedong; just to name a few; have all tried socialism and failed. But Malema remains convinced that he will somehow outsmart his socialist predecessors and make his socialist views, not just a reality but a success. The reason why socialist economies tend to fail is very simple. First, socialist economies are generally commodity-based economies. This means that they tend to rely on selling their country’s commodities (natural resources) to generate revenue instead of relying on their human capital to transform their commodities into finished products for alternative uses. Second, socialist economies generally rely on generating revenue from a specific commodity instead of diversifying their economy. Thus, when the price of that commodity falls, it is their entire economy that collapses. This has been the case with Venezuela and Libya.

Venezuela and Libya GDP per Capita

Source: World Bank

Venezuela and Libya are both oil producers. Their economies depend on selling crude oil per barrel to the global market in order to fund their social programs. When the price of oil was high, Hugo Chavez and Muammar Qaddafi were both praised as heroes who were making their countries prosperous. Between 2002 and 2012, Libya had a GDP per capita higher than many developed countries. During that very same period, Venezuela also had a high GDP per capita. The highest level of income per capita was $15,000 for Libya and $16,000 for Venezuela between 2000 and 2012. This high income per capita was not based on the Venezuelan and Libyan people creating more wealth for their countries. It was simply based on the fact that the oil market was very profitable. Since Venezuela and Libya are both oil producers, they made significant profits when the oil market was bullish. Once the price of oil plummeted and the oil market became bearish, then the Venezuelan and Libyan economies collapsed. Clearly, Venezuela and Libya failed to diversify their economies.

If Julius Malema were South Africa’s president, he would have ended up repeating the same mistake that all socialist leaders do: Making their economies rely on their commodities and never diversifying their economies to mitigate risks of excessive exposure in one specific market. Julius Malema would have made South Africa rely on its most precious natural resource to generate revenue, and not diversify the South African economy to maintain its competitiveness. Moreover, like his predecessors, Julius Malema would be an authoritarian leader at best, and a totalitarian at worst because the nationalization of the South African economy would consolidate his power further. Totalitarianism is the bedrock of the political system of socialist regimes, and Malema on that note, would not have any issue exhibiting his brutality towards his political opponents.