(Image: Ideogram)
Chapter 5 – The Second Council Meeting
The Second
Council Meeting, held on 2 November 2026, marked the beginning of
serious economic deliberation. The immediate crisis of security had been
contained, and public order was gradually returning. Now came the deeper and
more dangerous challenge: how to rebuild an economy hollowed out by decades of
corruption, mismanagement, and policy confusion.
A Country Ready to Work, But Nothing to Do
The
Council’s briefing papers painted a stark picture. Unemployment remained
the single greatest threat to stability. Of the country’s 40 million
working-age citizens, over 12 million were without jobs. Entire
communities had been stripped of dignity and purpose. Factories stood silent,
farms operated below capacity, and townships seethed with restless energy.
Dr. Harvey
Jacobs, opening the meeting, put the question bluntly:
“How is
it,” he asked, “that a nation so rich in talent and resources cannot find work
for its people, when so much remains to be built?”
The answer,
as the Council’s analysts made clear, lay in the structure of finance and state
policy. Infrastructure projects had been choked by red tape and political
gatekeeping. Private investment had dried up amid regulatory uncertainty.
Municipalities were bankrupt. The state, crippled by debt and dependent on
foreign lenders, had lost the power to direct national development.
The Debate Begins
It was Professor
Nigel Cooper-Smith, the economist whose reputation for intellectual
independence had earned him broad respect, who framed the problem most
forcefully. Standing before the Council’s semicircular chamber, he declared
that the neoliberal orthodoxy of the previous three decades had failed
South Africa.
“We have
treated money as a god, not a tool,” he said. “We worship the bond market while
our people starve. The time has come to remember that a sovereign nation need
not beg for its own currency.”
Cooper-Smith
proposed what he called “developmental monetisation” — a carefully
controlled expansion of the money supply to fund productive employment and
infrastructure. In simple terms, the state would create credit — not through
reckless printing, but through central-bank issuance tied directly to
labour-intensive public works.
His
argument drew sharp responses. Andries Marais, representing the business
sector, warned that uncontrolled debt creation could trigger inflation and
currency collapse. “We cannot afford to frighten investors,” he said.
“Confidence is everything.”
Moloketsi,
now one of Jacobs’s closest advisors, countered that confidence was meaningless
if millions remained hungry. “What investor will come to a land where the poor
have nothing to lose?” she asked.
Reimagining the Economic Engine
Cooper-Smith’s
model was methodical rather than utopian. The Reserve Bank would
purchase long-term government bonds specifically issued for developmental
purposes — housing, infrastructure, training, and industrial renewal. Funds
would flow directly to vetted projects with measurable outputs, not to
bureaucratic sinkholes.
To control
inflation, production would be expanded simultaneously with spending. Idle
factories would be reopened, raw materials locally sourced, and imports
reduced. Wages would grow only in tandem with productivity. Taxes would later
absorb excess liquidity once the economy stabilised.
In essence,
South Africa would create money for work, not for consumption. Every
rand issued would correspond to a tangible public asset — a road, a school, a
power line.
The debate
lasted two days and was often heated. Economists warned of historical
precedents—Zimbabwe, Argentina, Weimar Germany—but Cooper-Smith replied that
South Africa’s situation was unique: “We are not printing money to buy loyalty
or luxuries. We are investing in our own capacity to produce.”
The Council’s Compromise
On the
third day, Jacobs called for a vote of principle. His speech, later quoted in
textbooks on modern South African governance, captured the moment’s moral
urgency:
“We have
lived too long under the tyranny of fear — fear of markets, fear of ratings
agencies, fear of our own shadow. But poverty is the greatest inflation of all:
it devalues human life. We must dare to use the instruments of the state to
serve the people who built it.”
The Council
voted thirty-eight to twelve in favour of adopting the policy, under
strict safeguards. The Development Finance Act (Interim) was drafted
that same month, establishing a national infrastructure fund backed by Reserve
Bank credit. Oversight would rest with a mixed board of economists, engineers,
and civil-society representatives.
Implementation
Within
weeks, dormant projects were revived. Road repair crews reappeared on national
highways; housing foundations were poured in townships; water pipelines were
restored in drought-stricken areas. The sight of cranes and construction teams
became symbols of renewal.
By early
2027, employment in public works had risen by nearly a million,
triggering secondary growth in transport, retail, and services. Inflation edged
upward but remained within single digits, thanks to rising domestic production.
The rand held steady.
A Turning Point
The
adoption of debt monetisation marked a philosophical turning point in post-coup
South Africa. It represented a break not only from the failed neoliberal past
but also from the fatalism that had paralysed the state. Citizens began to
believe that purposeful government was possible.
The Second
Council Meeting ended with Jacobs’s quiet summation:
“We are not
gambling with the future,” he said. “We are reclaiming it.”
In that
moment, the outlines of a new economic order began to take shape — one rooted
not in ideology, but in the stubborn conviction that a nation’s first duty is
to employ its people.
