Thavash On Tech: Kanthan Pillay on Economics

Interview : Kanthan Pillay on Economics


7 February 2021

hi everyone and welcome to this video today where i have a very special guest i'll be talking to mr kanthan pillay well-known south african journalist business leader and academic so mr pelay a very warm welcome thanks for giving us some of your time today 

thanks for having me good to be here 

excellent so mr pillai um many south africans know you as a journalist and business leader but i'm very interested you have a background in the technology space which many people don't know about don't you want to tell us a little bit about that 

look it's one of those things that i think that frankly any business leader who's around today needs to have some sort of understanding of the technology space but in my case it was just a question of being in the right place at the right time because when i went to the us in 1986 on a scholarship to princeton at the time one of the requirements of the scholarship was that you needed to have employment so that you could pay for things that weren't covered by the scholarship so for example you know things like pocket money for one being able to pay for your own textbooks was another you know any extracurricular activities was the third and i was holding down a range of jobs at the time so one of them was working in food services at the university which basically meant that you were scrubbing pots and pans and all of that type of stuff and serving food of course and i worked as a bartender at uh a restaurant in the in the city and then i got a job at the university computer center and i walked in there one morning and the woman who was running the place rita saltz was her name was first in at the office sitting at the back end and i said i'd like to work here and she said well what do you know about this stuff and i said well absolutely nothing and she said well what can you do and i said well pretty much anything just give me time and she said well when can you start and i said tomorrow morning is good for me and she said i'll see you at 8 o'clock and i happen to be there at the birth of the internet really speaking because at that time there were three ipa addresses in all of princeton university wow now you know to put that in perspective princeton now has a range of uh class b subnets which you know literally we are talking about millions of potential devices just on the princeton campus alone but at the time as i said there were three ip addresses i was lucky enough to get in there when a range of things that we thought possible today just were not even conceived of so one of the first things that i did was to hook up a macintosh computer to the ibm mainframe okay just simply because i had met this macintosh computer which at that time was running off two floppy disk drives i wanted to be able to produce publications that had a more substantial amount of information than could be contained on two floppy disk drives and there was this ibm mainframe computer with what to me at the time was mountains of this space available and my logic was let's get these to work together so file servers as a concept at the time actually did not exist so it was a pretty groundbreaking thing and that actually ended up suddenly becoming a career for me because i ended up playing with lots of cutting-edge technology that the science in terms of what is being taught at the department of computer science had not yet come to terms with it because academia generally plays catch up with in terms of technology i worked in the program and applied in computational mathematics which was mainly doing very complicated calculations primarily for the us department of defense we had a new piece of technology called the intel hypercube which was basically 32 i860 processors in a single cabinet and each of those i860 processors they were floating point units and they would do very fast floating point calculations at that time roughly half the speed of a cray ymp which was the fastest supercomputer in the world at the time right and i figured out how to get this thing to work the result of that was that we ended up beating the rest of the country to a department of defense grant at the time it was a four million dollar grant for the program in applied and computational mathematics 

do you need any special security clearances to work on such a project 

look you see the interesting thing in terms of the way in which the dod runs these projects is they never really tell you what the end goal is going to be so all they're really asking you for is to do a particular calculation and with various parameters so for example they would come to us and they would say calculate the turbulence along a um a structure that is operating at a particular depth with particular pressures and we take a look at this and we'd say they are putting this out as though it's a submarine fin but in fact we can see that this is meant to be on an aircraft but that's okay we're just here to do the calculation and so but you know having said that i used to work very closely with the people who are briefing us at the department of defense uh used to go across to um fort monmouth which is where the scientists were based quite often and that pretty much drive it you know where my driver's license they've clearly done their security clearance on me beforehand and and all of that type of stuff i think 

yeah sorry i i think a lot of us who were into computers uh myself from the 90s we tend to look back and romanticize as the those being the good old days of tech do you agree 

look i don't think it's a question of of good old days i think what is true is that at the time it was a lot more accessible for someone getting into the field for the first time problem that we have today is that the sheer volume of knowledge that one needs to have to get into anything in the iit space this is massive i mean you consider where i'm sitting right now so you know effectively starting off in 1986 up until today and there's there's a massive slew of knowledge that i've acquired during that time but it's not enough for me to actually stay on top of what's needed to be at the top of the game today so you need to end up specializing you can no longer be a generalist at the level that i was when i got past the starting pose 

yeah very true and i think that problem is actually accelerating um if you look at things like ai data science 

well again this is stuff that has kind of predicted philip k dick very famous science fiction author i'm sure you've come across it so you know he's known for things like well total recall as an example was was based on one of his short stories blade runner was based on one of his books which was called to android's dream of electric sheep and so i i was really into philip k dick when i was you know a kid around about 12 years old i was lapping up his stuff and one of the things that he predicted was that human beings would become so specialized that the ability for people to be able to hop between various disciplines would disappear altogether so this and this actually has relevance if you look in terms of where we are right now with the covid stuff and i know you want to talk about covid later on but i just want to pull these pieces together because we have everyone focusing on what the epidemiologists are saying without considering that actually humanity lives in what's essentially a complex system and the complex system is not only dependent upon the life cycle of human beings as predicted by the epidemiologists but also by the economics that drive that entire structure and you know a range of those other things that come together and if you consider it only from one piece of the puzzle you are not actually going to be able to take into account that which comes from other factors that contribute to this complex system and of course politicians having zero knowledge of any of these fields are the worst people to be doing this but yeah so but going back to the the computer science thing so i as a result of this contract that we ended up getting there was a visiting italian scientist who said hey this is really great we're setting up a research center in in sardinia uh why don't you come and set it up for us wow and uh so at that time i was faced with either starting a career on wall street because i've had a very nice job offer from solomon brothers they'd offered me a 40 000 signing bonus at the time which was you know huge or i had this thing about going to a mediterranean island that i knew nothing about so guess what i chose  

well i think that would have been around the wall street crash so perhaps the right 

no the wall street crash was very quick remember wall street crash was in 1989 and the markets recovered very quickly from it people tend to forget that you know if everyone who lost their shirts during the wall street crash had actually just sat back and done absolutely nothing they would have been fine 

right right before we get on uh do you find time to still keep up to to the tech world today well it depends on what you mean by keep up obviously i'm always looking out for where tech is moving and where the next opportunities are likely to come from i've i still you know code my own websites and that kind of stuff i'm spending a lot of time now pouring around um trading bots primarily to play in the cryptocurrency space but uh not at the level of of actually making use of them right now but i'm just trying to get my head around where the opportunities are to be doing uh things in that in that space but later when we talk global macroeconomics sure but uh yeah i suppose you know keeping up to speed on it well i right now i've got money that's invested outside the country and it's primarily in tech stocks right so i've obviously watched that very carefully you know so while there's a very strong shall say propensity just stay with the safe stuff so you know which is basically facebook facebook apple netfix um google the fang stocks as they're called i'm still looking at where the next leap is going to be in [Music] in tech where where's the next uber coming from that type of stuff the next uh disruptor basically 

yeah thanks yes thanks for that so i want to talk uh now more in the present and the current state of uh the world we've suffered for almost a year with this coveted pandemic we've been hit economically and of course people have died in this country and around the world does the vaccine trigger an end to this or are we still too early to be expecting uh anything that optimistic in your you view  

the problem with predicting the future is that if we were able to do that a lot of us would be rich yeah okay i i think that the vaccines are an important first step and i think if you look particularly in the south african context we've dropped the ball spectacularly yeah our government has been just completely idiotic in terms of the way in which we've done this what should really have happened is that anyone should have been allowed to import the vaccines the first thing that would have happened is that all of the medical aid companies would immediately have funded the import of the vaccine because if you consider this the money that the medical aid companies need to spend on giving vaccinations to every single one of their members free of charge is significantly less than whatever it costs to hospitalize everyone who's on a hospital plan but then to be just 

sorry sorry to be fair what about the millions of south africans who are not covered by any type of medical aid how would it work to get the vaccine to them  

well that's government's job isn't it but the entire idea of saying that the private sector is not allowed to do it and only the government is allowed to do it means that effectively what you are doing is taking the breadwinners of the country the most economically active sector of the kind of the country which are the people who are sitting with medical aid and telling them to get in line based on some arbitrary decision that gets taken by some flunky in government and you have to understand that this is a government that's not able to keep computers working at home affairs they're not able to keep the lights on and we're trusting them to be able to successfully vaccinate us i don't think so yeah so it's not a question of either or you know yes we should be caring about the masses but remember that our duty as human beings is first and foremost to take care of our families 

yeah lockdowns your view on lockdowns lockdowns don't work it's very clear that lockdowns don't work then education is a far more significant determinant in terms of how you get people to actually deal with this so you know for example when we move from the most restrictive levels to where we are right now did i end up modifying my behavior significantly the answer is no i'm still not going out to restaurants i'm still not going to go hanging out at pubs i'm still not going to large gatherings my parents uh are still mainly housebound so i do you know most of the shopping that's uh that's involved because it's it's a sensible thing to do yeah and really what what should be happening is that the economy should be set as free as we possibly can and all of the vulnerable groups really should be protected so you know if you're diabetic then you need to stay away from any potential infection risks if you happen to be over the age of you know it's a moving target now but you know let's say late late 40s onwards you know take more precautions than you would for your kids all of that type of stuff i i really don't get where this desire to force particular streams of activity uh to succeed while others fail comes from but again it goes back to our earlier point when you lack a fundamental understanding of what's necessary to keep everything working and how to make money things are going to fall apart 

yeah so a more a more sensible uh approach would have been preferred so that's a good surgery into talking about the economic situation and i want to rewind back and i think this will be an interesting question to you in 94 we were the darlings of the world we had our 15 minutes of fame there's an argument to be had that perhaps we didn't capitalize on it in terms of developing the economy um you know positioning ourselves as a local location globally for manufacturing services basically everything that some eastern countries have done and not just eastern countries countries around the world that got it right what is our place as a result in the world in 2021 

you have to understand that you can't see that entire period from 1940 now as monolithic so if you look in terms of what happened from the period from let's say 1994 to 1996 at that stage we were kind of all over the place and remember that when we got to um at that stage we were just about to see the precursor of the the asian crisis but but crucially at that point we didn't really have an economic policy um to speak of um we talked in 1994 to 1996. and coming up to 1996 was when thabo mbeki was effectively running the country at the time even though mandela was president took a very important decision and that was to drop the reconstruction and development program and instead move it in the direction of gear which was growth empowerment and redistribution the net effect of this was to say all of the social welfare programs that we had planned as the anc we tossing out what we're effectively going to do is to set the economy free and allow business to actually flourish and the net effect of that was that south africa then went through the single longest sustained period of growth in its entire history and the net result of that was that we suddenly had because our economy was booming and there were a couple of things that mbeki instructed trevor manuel to do at the time because remember manuel was finance minister the first thing that he instructed uh trevor manuel to do was to pay back the debt so we wiped out the national debt completely we also had tax cuts every single year during that period of time which and the end result of that was that more money flowed back into the economy but the dividend that then came from paying off the national debt because remember at the time paying the national debt was the single biggest item in our budget i think it was close to about 22 23 of the budget was going to pay for the national debt so the dividend that then came from paying off the national debt thabo mbeki then took and plowed that into social grounds and the net impact of plowing that money into social grants was the single biggest transfer of wealth and eradication of poverty that's ever taken place anywhere in the world because we had a reduction in terms of living standard measures group one lsms we're talking about here uh over a five-year period we had a reduction in lsm one of 60 that meant for every 10 people that you had among the poorest of the poor six of them were lifted out of poverty during that time as a direct result of that social growth and so it created a virtual circle a virtuous circle 

but then just to recap on that so it sounds like the initial gear policies were very capitalistic in nature business friendly and then we moved to the social grants which did have an impact as you said lifting tremendous amounts of people out of poverty but then when should that have been paid back surely that was not sustainable  

no it you see um actually it's an interesting scenario out here but you know as a capitalist i'm actually not um hostile towards the idea of social grounds right because and in fact i prefer social grants to the entire idea of government being responsible for being a provider so the fund the starting point around this is that i think that people generally know how to manage their money better than government does right so if you take education as an example the cost of educating a pupil per year in south africa right now is roughly 20 000 rand per pupil per year so my view is that i would rather take that 20 000 rand and give that directly to the family of that child and then allow them to make choices in terms of how the kids get educated because right now you have a scenario in many townships around the country where people have been setting up private schools why because government education is a disaster 

so now just to go back to the question of social grants if you take that view that instead of money being poured into the pocket of government who then spend it on our behalf pour that money directly and the entire economy then booms as a result because people spend money sensibly but then so i have to ask you on that point so that's classic demand stimulus by the sounds of things right put money into the hands of people how do you balance that with increasing tax revenues without impacting business  

well you don't need to increa increase tax revenues because remember at the time what thabo mbeki was doing was actually systematically going through tax reductions and we actually hit a sweet spot because at the time when the 2008 2009 crisis kicked in remember that we were literally a debt-free country at that point and we were able to pay social grants out of profits not out of borrowing so think of that as a workable business model and as as long as and remember the most crucial thing that we need to look at in any society is the sweet spot comes when two numbers correlate so the first number is population growth the second number is economic growth as long as you've got economic growth exceeding population growth you are growing more prosperous as a country right as soon as it switches the other way around it's a disaster because it means a country is getting poorer because the measure of productivity of the country is declining overall so then that's the scenario in right now  

that that leads me to two very interesting questions um is gdp the right indicator to measure an economy like south africa's  

firstly oh gdp is probably the most important indicator because gdp is giving us an indication of whether we're going forward or whether we're going backwards now we have the scenario right now where our population growth is significantly larger than our gdp as long as it was the other way around we could still continue smiling it doesn't really matter how many kids people have because as long as your economic growth is faster there's enough money to actually sustain those people now we have the scenario where because the population growth is exceeding the economic growth it means that every year the amount of money that you're able to pour into um uplifting people out of poverty gets spread among a larger number of people which means therefore that there's less people which means effectively that okay we're going backwards so uh in fact if you look at my my website i wrote a piece failure recently a couple of thoughts and about gdp which you know people are welcome to take a look at so it's a factor but it should not be the sole factor  

so we've put we can put some links to that article if any of the viewers are interested but then that brings me to my second question which is going to be a little bit controversial we saw a population jump due to factors in surrounding countries we were highly sympathetic to the situation in zimbabwe you know where i'm going with this you know we have a politician currently calling for open borders is this feasible to to be diplomatic 

we're conflating a couple of things out there and i i think you know one of the things that we need to do is to try and separate out what actually makes sense from a matter of national policy and and the impact of other things so firstly going back in terms of population growth the one thing that we do know there are studies around the world that show this the best way to actually curb population growth is prosperity yeah and i cannot i cannot say this more clearly because if you consider that when you're poor and primarily in a rural environment you have many children because that's your retirement plan yeah because when you can no longer work you're reliant on each of those children to then give you something at the end of that process now when you have modernized economies where people become more prosperous we have fewer kids per generation than than we've done before and what that means is that because we have fewer kids we spend more money on their education we spend more money on passing on generational wealth and this happens across the globe so you'll see now in india for example population growth has actually slowed as prosperity has increased and they've been able to do this without the draconian measures that the chinese had to do the chinese are in trouble at this level by the way because of their one-child policy because it means now that they don't actually have a sufficient volume in terms of a younger generation to continue growing the economy going forward but then now let's look at the example that you brought up in terms of open borders open borders are great as long as the rules of those open borders apply equally across the board when you have disproportionate systems in each of those countries so now consider that we have our court system has taken a decision that anyone who comes into this country as a refugee is entitled to the same rights as a citizen which means that they are entitled to have access to health care to education and all of that stuff that means that you're going to have an influx of people into this country to take advantage of those systems without paying for it and that becomes a problem so you can't have open borders are great but it has to be on the basis of fundamental equality and that's why the european union is in as much trouble as it is right now it's the reason why brexit happened it's because frankly the british got tired of the fact that you had people flocking from poland to take advantage of national health benefits that are not available back in their home country so yeah so none of these things are binary we can't just say that immigration is bad uh open borders are bad um the way to to fix people from breeding is to have for sterilization or no no it's all interconnected and and complex systems you know really kind of work that way  

it's very interesting i want to then move to the the economic growth question uh obviously we went up to 2009 and then we saw deficits increase from 2009 due to various factors and i don't want to get into the politics of 2009 to 2021 but if you had the ability to reshape our economy tomorrow let's say you were president for you woke up tomorrow morning you were president what are the two to three things the low hanging fruit the easy things to do to make this country more business friendly to attract foreign investment and to really get the gdp growth going again 

the first thing that i would fix in this country is public transportation and i i can't say if there's a single thing that we could do in this country that would make an immediate difference in terms of the lives of the population as a whole it would be public transportation and public transportation you must understand is very different from what we have today which is essentially commuter transport right which is getting people to and from particular routes when i was in south korea a few years ago and i was uh i landed in seoul and then i went out to suwon which is where samsung's headquarters were and they are literally two separate cities but the fascinating thing is that the underground railway network literally connects the entire country at that level so i can just hop on a a metro train from seoul and go all the way up to suwon on you know quite effortlessly within a short space of time why does this stuff become important it's because the people are living in seoul but the jobs happen to be and so on now even though you're talking about distances of 60 to 70 kilometers what it means is that a person who lives in seoul is able to get their kids off to school and then hop on to a train and get down to work and then come back in time to still spend time with their family in the evening now contrast that with the scenario that we have in our country right now where there are jobs available in pretoria there's a workforce that's available in soweto but the only way that people are able to get from soweto to pretoria to have access to those jobs is by hopping four or five minibus taxis in quick succession which means that effectively they are spending two hours in the morning two hours in the evening just on commuting it means that at least fifty percent of their salary is great towards paying for transportation costs and that is the single biggest knock-on effect in terms of the overall economy plus factor in that those four hours a day that could be spent on family time between parents and kids again if you look in terms of social degradation why do you have breakdown of family structure it's because of the fact that parents aren't able to spend time with their children in order to infuse um generational cultural values in terms of you know honesty and integrity and all of those things which if you have a functional public transportation system and if you just get that one thing right everything else kind of flows from that so one doesn't have to have grandiose plans consider the sheer amount of money that we're spending right now on saa and that money being poured into the transportation system very quickly is going to fix it we have it's a different form of transportation but not the one it is yes but you know effectively what we are doing with saa is we subsidizing transport for the rich whereas we should be subsidizing transport for the poor so our our government which claims to have the interest of the poor at heart has actually got it backwards so i wouldn't do anything more than that you know if there's a single thing that i would say as president as my legacy project i just want to do this one thing that's what i do to get people uh to work affordably and that has enough because yes consider the other things okay for example why do we have slums okay we can call them informal settlements okay but they're essentially squatter camps they're slums you call them what they are and the reason why those things exist is because people move there because they are close to where work opportunities are now if your public transportation system would allow you to live in a place like um i don't know let's say ennerdale which is in the southern part of uh um which is south of soweto basically and to be able to travel from there to pretoria in the space of an hour at relatively low uh low cost why would anyone want to live in a squatter camp out in uh near pretoria absolutely so they're they're all of the social ills that get cured based on the ability to move people over vast distances quickly and efficiently 

that's very interesting uh so then let me ask you one more question on the local economy and and uh capitalism and business friendly politics now our political uh parties generally talk about uplifting the poor there's there's always been a move very strong towards communism socialism how would you sell capitalism and economic growth to the average disenfranchised south african who perhaps has not heard the right message who's got a negative image that it's it's not the right thing it's for the rich or for a certain group or class and you know you've got the opportunity now to sell it to him how would you do that 

it's a hard one simply because most people already intrinsically understand what capitalism is all about and and if you think about it why is black friday as hugely successful as it is in our country and if you look in terms of the things that people buy on black friday if it's things like they will go and buy a trolley load of coke as in coca-cola which happens to be on special because it's marked down by by fifty percent people actually coca-cola yes coca-cola and people actually understand that this is an opportunity for them to be saving money going forward and they take advantage of that opportunity so intrinsically people know how to manage their own money and they know how to make money work for them and we see this in in spin-offs and in terms of things like stokvels falls as an example you know we see it in terms of people understanding the concept of shared transportation you know they set up lift clubs those are all things that are inherently capitalist in nature the issue that we have is trying to differentiate between capitalism and crony corporatism and crony corporatism is a huge problem in this country in fact many people who think that south africa is a capitalist country actually it isn't because there's if you consider just taking a look at the jsc as an example you know there's a there's an 80 there's the 80 20 rule which applies you know people should look at the 80 20 rule by the way because it applies lots of yeah yeah exactly yes exactly but 20 percent of the shares on the uh uh sorry 20 of the companies on the jsc control 80 of the wealth of the of of the jse and they are essentially monopolistic in terms of the way in which they operate because they there's a level of collusion that goes on between all of them even though it's not overt collusion which is why you've got a scenario where celsi is not able to succeed against a backdrop of those two giants of vodacom and mtn it's why you have a scenario where new players trying to enter the market are effectively squashed down by the larger players that that get out there consider banking for example why is it that whenever there's a shift in the interest rates all of the banks adjust their rates to exactly the same level you know why is there not one bank saying we are always going to set our prime lending rate at uh prime minus one so we'll always be one percent lower than the other banks it's a business opportunity why don't they do it is that simply a regulation uh failure no no it isn't it's it's a lack of access to market opportunities in terms of how people are able to get in there which is so yes at one level you can say that it's a regulation failure because it's a failure to make it easy for new participants to enter the marketplace look there are some things that we've done that are actually significant in recent times so let me give you one very specific example there was this idea that in terms of our shopping malls you have this concept of anchor tenants and the anchor tenants were generally put in place an agreement that if they happen to be in a shopping mall then a competitor won't be there so historically if you go to any particular shopping mall you would find a pick and pay but not a checkers because that would be written into their contracts and now we have a situation where the competition commission has determined that this is anti-competitive absolutely right because as far as i'm concerned if i'm going shopping if it so happens that the butter is cheaper at checkers and the cheese is cheaper at pick and pay i just want to be able to walk between shops as opposed to drive between shopping centers so you know as an example so that's one of the scenarios where regulation would actually have been uh important but most of the anti-competitive stuff that we come that we have comes from this this whole idea of national bargaining agreements that take place between particular industries so you have very large manufacturing facilities that sit down with unions and then do wage determinations for the entire industry which fails to take into account the possibility that a new player might want to enter the market so let's say if i'm in the clothing industry as an example let's say i happen to be setting up in a place like newcastle which has you know probably better than a 90 unemployment rate in that particular city and i i want to say i'm getting together a group of people and we're going to start manufacturing clothing out here and we're going to end up paying each other 2 000 an hour plus we're going to split the profits at the end of the year you're not allowed to do that why because big business and big labor have gotten together and they've taken a decision that you as the person who is setting up this company don't have the right to determine what you're able to afford to pay yeah so all of these pieces come together 

so it's a classic oligopolies which we've seen in other countries as well i want to shift to global macroeconomics and the global outlook and i want to start with what we've seen over the last 20 years in terms of globalism and these large multilateral trade deals bricks tpp nafta i think it's now being renamed now we've been brought into brics uh do you see value in these global partnerships or has it just been a mechanism to shift manufacturing jobs to certain regions uh honest question what have we gained out of bricks 

if you look in terms of what south africa has gained out of brics right now well you know we've got access to the brics bank which theoretically means that our government is able to borrow more money to steal so at that level yes yes we we we've gained something look i i think that bricks right now if in the broad scheme of things it's actually only the middle part it's russia india china and those three countries are essentially frenemies because they're competing in the same space at a number of levels but at the same time what they have very successfully been able to do is to create their own monetary system so that it's not dollar denominated and that is hugely important because what it means is that you've been able to have the free flow of commerce between those three entities that is outside of the u.s banking system because the u.s by controlling the banking system effectively controls the global economy so how does the u.s enforce the fact that we are not allowed to buy oil from iran well they do that by simply making it impossible for anyone to root payments across to iran so russia india and china have actually been able to very successfully create a scenario where when india buys oil from russia for example they're able to pay in in rupees and uh ditto in the case of uh of china and so there's you know all of these trade exchanges that are happening brazil has moved on a different direction because brazil voted in a conservative government and brazil in fact very quickly ramped up its alliances with the united states during the trump era now you've suddenly got the biden error coming in again and that's you know kind of upset the apple cut at some levels so i don't know where that's great yet but uh in south africa is is kind of like like a flea on the larger dog of brics yeah yeah so you know we we we bloodsuckers but we're not really uh able to suck out the blood from the entire entity  

so looking at the smaller country and what the smaller country can do to protect itself in the in this era of globalization now i made a video in 2019 which uh i theorized at that stage that i felt that bitcoin could help these countries overcome the petrol dollar or or the the u.s dollar as a global reserve currency and we're starting to see it we've seen countries like iran venezuela embrace it so this is the the proper sedge way to get into cryptocurrencies do you see that happening and what's your view on the space 

it's very interesting it merges tech and economics so it's very interesting space to a lot of us the interesting thing in terms of of crypto is that it's highlighted the fact that the entire idea of fiat currencies is one of the biggest cons in terms of of the human race it's there's ever since we abandoned the gold standard there's been a systematic destruction of wealth by governments who have just simply been able to print money if you consider for example the um what currently happens in the united states so how does the united states actually do stimulus well what they effectively do is they borrow money from the federal reserve and they inject it into the economy but what is the security that they provide to the federal reserve well they print a massive amount of money and they deliver that to the federal reserve as security for the money that they borrowed so effectively you're injecting something into the economy that doesn't have any real value but the united states is the only country that is able to get away with doing this and the reason for that is because the united states has insisted that you can only transact oil in u.s dollars now when you have a scenario where the only way you're able to buy a barrel of oil means that you have to have us dollars it means that every country in the world is forced to be part of it now there's a couple of things that are actually shifting things away from that space the single biggest thing that's going to cause the breakup of the us dollar is going to be the movement towards other energy sources away from petroleum and you know i don't think people have any idea right now what the impact of electric cars just as a single category of thing is going to have overall on the way in which the world monetary system actually runs because if the only reason why you needed to hold us dollars was to buy oil and suddenly the global dependence on oil has actually shifted what happens to the intrinsic value of the us dollar you're not able to prop it up anymore and and at that level the question then becomes what then do people invest their money in that is actually going to give them at least the ability to stand still because remember right now you're always going backwards in terms of what your money is actually worth so where do you actually put it so that you can be reasonably sure that it's not losing value so during my grandfather's generation it would be literally keeping gold coins under the mattress yeah in many parts of the world like south africa we're not allowed to own gold coins we could buy krugerrands but that's a crock because that's massively inflated in terms of its price uh if you go to abu dhabi you can literally walk up to a vending machine put in your credit card and get out a bar of gold and the reason for that is because it's a store of wealth and the governments they actually recognize it crypto is becoming that store of wealth but remember that there is that governments who rely upon the ability to be able to effectively steal your wealth through inflation and through taxation once you have the ability to freely exchange money between individuals that is outside of reach of government that is the single biggest threat to government around the world and that's why you are seeing all of these crackdowns that are happening on an ongoing basis in terms of of cryptocurrency so what's going to happen in the long term is crypto is here to stay which cryptocurrency ends up being um people's choice i think there's going to be a basket of them mainly because you need the ability to be able to pay for transactions quickly the problem with bitcoin right now is because verification of a transaction takes a minimum of 15 minutes you're not going to be standing for 15 minutes in a shopping queue to ensure that the five rand that you've just spent on uh buying um a handful of sweets is going to be processed yeah yeah so basically yeah i think my personal view is that bitcoin will be seen as gold you won't buy a cup of coffee with bitcoin you will store your wealth and use it for large transactions like maybe buying a house and there will be a few others for for other purposes 

do you see the 20s then being a period of potentially high inflation across global fiat currencies due to all of what we've discussed well 

i think that the interesting scenario that we've got right now is that if you look particularly in terms of the rand dollar exchange rate if you consider what a disaster situation the south african economy is in right now but at the same time we've been able to maintain that roughly 15 to the to the dollar threshold and you have to ask yourself why is that and the reason why that's the case it's not that people actually have confidence in iran it's that people don't have any confidence in the us dollar anymore and that has a ripple effect across all of the fiat currencies so i'm answering your question kind of in a backward fashion but i think that a larger number of people are becoming aware of the intrinsic lack of value that exists in the existing monetary systems and that means that they are looking for alternatives yeah in in terms of in terms of what they're doing  

one final question on uh you know the global affairs what's your view on some of the censorship we're seeing uh across social media platforms and we heard about the great reset is there something sinister brewing now post covert in the world 

oh absolutely there's something sinister brewing but that something sinister uh has been going around quite a while very interesting article in time actually over the past week that talks about you know if in any other scenario this would be termed as conspiracy and collusion to affect regime change in the united states but time is now quite openly talking about how big tech came together with civil society and with unions in the us to do their damnedest to ensure that trump was kept out of office you know so it's out there in the open now this is exactly the same type of thing where if china does it then everyone gets furious about it if india does it everyone gets furious about it but you know it's okay for the united states to clamp down on particular trains of thought simply because of the fact that oh this is going to encourage violence i think what's going to happen is that there already has been a dramatic shaking of credibility in terms of your traditional sources of information now consider this since the beginning of this year cnn has lost 44 percent of its audience and now ask yourself why is that and you know what are the the explanations behind that on the other hand there are some uh vehicles like fox news for example has actually increased its base and that actually points to a crisis of credibility that's happening at a number of levels you see places like youtube now clamping down very firmly on trains of thought that don't agree with their global outlook but at the same time you are seeing more and more competitors coming up to places like youtube you're also seeing a scenario where there's an attempt to try and censor the internet at uh at some level so i don't know if you know that there's a website called dear south africa are you familiar with it no i'm well they okay well dear south africa is a group of people who essentially end up hosting petitions primarily around a range of things so expropriation without compensation there's a petition on dear south africa where you're able to make your submission and they crowdsource those submissions put them into a format that's suitable for being submitted to parliament and they do that and they were taken offline this week by the internet service providers association presumably for some violation of terms of service now the entire idea that you have people who are meant to be providing you a pathway are able to shut off that pathway it creates a scenario though where an increasing number of people are going to move into the dark web because and you know we don't have time to discuss what the dark web is all about here but the entire idea is that you have encrypted end-to-end um transactions where because of the fact even though they traveling along the same internet lines because no one is able to see what's actually going on in that particular transaction they're not able to censor it and i think that that's going to be an increasing view as people suddenly start taking responsibility for their own privacy at a level that they haven't done before we saw this in terms of what happened with the facebook whatsapp debacle fairly recently the sheer volume of people that switched to signal and to and to telegram and facebook is never going to be able to claw itself out back from that credibility gap in terms of whatsapp and to this day i'm still seeing everyday updates in terms of how to further protect your privacy from facebook so it's gone yeah exactly 

so i'd like to start uh wrapping up the discussion and uh my closing thoughts and then after this question we can we can hear your general closing thoughts but my closing thoughts is you know we were a country that had uh we were starting to go into debt debt uh we had the soes uh in crisis all of this before covert and now we're trying to get out of covert if nothing changes in south africa what are the prospects for this country over the next decade 

it depends on which part of the country you're looking at and who in the country you're looking at i think that you probably noticed that i haven't been on twitter over the course of this year simply because um i just did an assessment and decided that was not a productive use of my time and and and so and so i've been pretty much off there but as i was closing off last year i said my slogan for 2021 is going to be defund the bastards and the bastards in this case being our overlords who sit primarily in luthuli house and really what what we need to do is we need to have a situation where we have a real democracy in this country and we have a real democracy at the point at which parliament becomes real parliament becomes real when the anc is a minority party so the anc has to drop below 50 percent if the anc drops below 50 the only way they're going to be able to pass any legislation or budget for that matter is with the cooperation of the other parties so you're never going to have a situation i think if you look at the growth trajectory where the d.a is going to be the party that's able to rule the country but you are going to have a situation where the da is able to have substantial influence in terms of what gets passed so it's either going to have to be the country is run by an alliance of the anc and the likes of the eff or it's going to be a scenario where if the anc wants to move in a more growth oriented direction then they'll need the cooperation of the da to get legislation passed so look at that as a future political model that's going to determine where the country goes until that time i don't think that we're going to see any growth that's actually going to happen eskpm is never going to be able to claw its way out of the debt hole that it is in right now in fact the view that i've expressed in the past is that treasury should simply take the view that it should take the entire s-com debt absorb it into the treasury and you know write off the debt as part of the fiscals rather than something that s come ever needs to make back reset s comp to zero slash electricity prices from there and that will be the single biggest thing that will then be able to spark business growth they unlikely to do that simply because these complicated soe structures are they primarily as a means for our government to steal and as long as we recognize that that is the business model for the african national congress in its current incarnation it is to have as many of these entities as possible and all of them funnel money back to the mothership which is the anc they've learned well from the chinese which is why they're such good friends with the chinese for my part what i'm quite determined to do is to spend as little money as i possibly can that's eventually going to make its way into the pocket of government 

very interesting any any final thoughts closing thoughts before we we end off i would suggest that everyone who can actually afford it start putting in place solar panels at their place and going off grid 

they're going to charge you for that now 

no no they can't they can't charge you for the solar panels what they can do is they can raise the the amount of money that they are charging you to be connected to the grid so in other words it's it's kind of like you know when you wanted an adsl line at your home but you still had to pay telcom rental for the fixed line costs coming to your room that that's the type of scenario that s comes looking at but you know if you go onto s-com's smallest pair as you go to a package and you eventually replaced all of your light bulbs with uh with leds tossed out your electric stove and put in place uh gas stoves all of these little things eventually mean that it's more money that's going into your pocket you're still building residual value in your home and you're not paying it out to government and you know it's better investment than you could make sticking it into the jse the gsc has actually gone backwards for in real money terms over the past several years 

yeah well mr pillay on that note uh let's end it there thank you so much we've gone a bit over the time i certainly enjoyed our chat and i found it very interesting some very good points especially and i'll do a wrap because i like doing this for the viewers you mentioned the need to improve public transportation as the number one thing that could get our economy going again uh you mentioned that we don't really have uh a proper capitalism in this country there are barriers to entry the monopolies and that's also preventing economic growth uh and you also mentioned aspiring to become a proper democracy as opposed to the current system and those are three points that are made so thank you for joining us uh today and i think the viewers will most certainly have enjoyed this and perhaps in the near future we can have you on again  

a pleasure okay thanks