Just 3 decades ago South Africa, the Rainbow Nation was the toast of the world. Now our people and our businesses are struggling to survive, and our African Dream has become a nightmare of poverty, crime, disunity and disintegration.

THE STATE OF OUR ECONOMY

• Businesses are shrinking and closing on a regular basis. Our unemployment rate has risen to over 43%. The recent 128 000 job losses to AI in the fintech sector internationally destroys the myth that AI creates jobs.
• In addition to ongoing worker strikes in South Africa, companies are going on strike by replacing people with technology and by moving their businesses to other countries, thereby exporting South African jobs.
• Foreign direct investment is deterred by SA’s political risks, increased trade tariffs, fuel shortages, high corruption levels, the collapse of JHB, the control by mafias of core industries and low economic productivity.
• The IMF’s 1.8% prediction for SA’s 2030 economic growth rate is way below the 5% level needed for economic recovery per South Africa’s National Development Plan.
• the IMD World Competitiveness Yearbook, whose rating is a key productivity indicator, ranks South Africa 64th out of 69 countries.
• Muzi Dladla, Executive Manager at Sasria warns about social unrest. He said that “South Africa is entering what risk experts have described as a ‘polycrisis’—a scenario where multiple crises unfold and compound one another.” (February 2026 BusinessTech article “South Africa heading for social unrest”). This reveals South Africa’s vicious spiral of severe economic insecurity and absence of social cohesion.

THE ROOT CAUSE OF SA’s ECONOMIC DECLINE

The biggest and most central cause of our economic polycrisis is the festering conflict between capitalist business and socialist labour.

At unionised workplaces the norm is that management acts in the interests of the shareholders, and the unions act in the interests of the workers. It is also the norm that employees, instead of earning better pay by working more productively, earn their pay increases by withholding their labour and impeding productivity through strikes.

Even in non-unionised workplaces employees and managers, most often, feel indifferently towards each other; and apathetic employees pitch up for work just to get their pay.

Where business and labour, the two key actors in the productive process, are pulling in opposite directions, the economy within which they battle each other will continue to weaken.

Businesses are responding to low productivity levels by using Artificial Intelligence (AI) to replace ‘troublesome labour’. However, this apparent ‘quick fix’ will in fact hasten the crash of our economy. This is simply because AI-spurred retrenchments cause already massive unemployment to grow, which shrinks the consumer buying power needed for business sustainability.

URGENT NEED FOR A COMPLETELY NEW ECONOMIC CULTURE AND MINDSET

The base from which we must grow our economy is the relationship between business and labour. At macro level we need to replace the destructively competing ideologies of capitalism and socialism with Shareism, a common ideology that fosters a workplace partnership between business and labour. At micro level we need to replace the we-them mindset that is so common at workplaces with a Co-Productivity mindset.

Only then will AI become an implement of business development rather than its inadvertent saboteur.

THE 5TH INDUSTRIAL REVOLUTION

If we want to avoid a violent socio-economic revolution, if we want incrementally to increase the consumer spending power needed for our businesses, we need quickly to implement a 5th industrial revolution. That is, we should now be focussing on getting our 10.8-million unemployed people into the workplace through Shareism and Co-Productivity.

WHO WILL SOLVE OUR POLYCRISIS?

Our socio-economic polycrisis is not going to be solved by our government, by Father Christmas or by artificial intelligence. It is the South African people and businesses who can and must solve our polycrisis using our human intelligence and hard work.

Jesse Ventura, a former US governor, said that “Government is at its worst when you have apathy from its citizens.”

If you are reading this, please stop reading and start working on implementing Co-Productivity in your business and Shareism in your society. If you want to know how you can get involved contact ivan@labourlawadvice.co.za.

Written by Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: ivan@labourlawadvice.co.za. Go to: www.labourlawadvice.co.za